Globeandmail.com

Full house of subplots, skill at 2015 Brier
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The presence of a Team Canada entry at this year's tournament is a first for the 86-year-old national men's championships
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By ERIC DUHATSCHEK
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Saturday, February 28, 2015 – Print Edition, Page S5


CALGARY -- eduhatschek@globeandmail.com

For the first time in the 86year history of the Canadian men's curling championships, there will be a Team Canada entry competing in the 2015 Tim Hortons Brier - and that could have been Kevin Koe's spot so easily.

Koe had qualified automatically for this year's event after winning the Brier last year with his team of Pat Simmons, Carter Rycroft and Nolan Thiessen.

Instead, as part of a seismic shift in the curling landscape that followed the end of the Olympic quadrennial, Koe opted to go in a different direction.

After four-time Brier champion Kevin Martin retired, Koe formed an all-new, all-star squad that included two members of Martin's old team (Marc Kennedy and Ben Hebert), along with Brent Laing, who previously won two Briers with Glenn Howard.

In the meantime, the three remaining members of Koe's former team inherited the automatic Team Canada Brier berth and recruited John Morris as their skip.

Morris is a two-time Brier champion and also a 2010 Olympic gold medalist, all playing third for Martin, but was actually thinking about taking a year away from competitive curling until this opportunity arose.

Confusing?

Imagine two NHL teams completing a blockbuster deal at the trading deadline and then meeting a month later in the Stanley Cup playoffs, and you have a better idea of how unusual and intriguing is this ebb and flow of high-end curling talent.

The net effect is when the Brier opens Saturday at the Scotiabank Saddledome, the meeting between Koe's old team and his new one is the primary subplot. It also represents a marketing bonanza for the organizing committee, which was heavily promoting the fact that there are two home teams in this year's event, and both call Calgary's Glencoe Club home.

Attendance records could easily fall.

"Considering how things are going in the oil patch, people have a lot of time on their hands," joked Rycroft. "It sounds like it's going to be rocking. People are excited, and can't wait to get there."

According to Rycroft, there is no great mystery as to why the two Alberta teams shuffled their line-ups heading into this season.

"It's a four-year cycle because of the Olympics and all four players have to be on the same page because it's a big commitment," said Rycroft. "Second, I don't care who you are; I'm a big believer that teams can run their course. There's a time frame on teams - you'll see it on other sports too. You can't have the magic forever. Sometimes, it's just time for a change." For Koe, assembling a new team from scratch meant they had to qualify for the event all over again - and did so by winning the Alberta provincials.

"It's a little ironic, I guess," said Koe. "It's the first time for Team Canada, for the men anyway, and I passed on it. Luckily, with my new team, we managed to qualify, so now everyone's pencilled in that game against them and hopefully both teams are having a good week when it comes. But I'm trying not to put too much emphasis on that game myself."

For good reason, too - because the 2015 competition figures to be more than a two-horse race.

The 2014 Olympic champ, Brad Jacobs, is here, representing Northern Ontario, as is the 2006 Olympic champ, Brad Gushue, representing Newfoundland.

Koe's brother, Jamie, will skip the Northern Ontario team and Manitoba's Reid Carruthers will pose a significant challenge after upsetting the top-ranked team in the world, Mike McEwen's squad, in the provincial playdowns. Carruthers is making his debut as a skip, but he was part of Jeff Stoughton's 2011 Canadian championship team.

In short, it's a strong deep field, and the pressure to perform will be there from the first draw.

"You really can't afford to have one or two players not playing well at events like this," said Koe. "You just can't. It just becomes a snowball effect - where everyone has tougher shots, or if your skip's not playing good, you don't have much of a chance.

"So chemistry is huge. It's a little different from hockey because it's not really our job, so there's more of a friendship side to it. But at the end of the day, we probably spend 70 or 80 days on the road together, so we put a lot of time and effort into it. It's definitely possible to win if you're not best friends, but for sure, it helps."

This year's field will feature 12 entries - Team Canada, plus the 10 teams with the best combined records over the past three Briers. The 12th spot in the main draw will be determined by a pre-qualifying round featuring Nova Scotia, Prince Edward Island and Yukon.

To Morris, the format change will greatly enhance the competition because it makes the field that much deeper.

"Look at the years when the two best teams might have been from the same province," said Morris. "Kerry Burtnyk, Vic Peters and Jeff Stoughton were in Manitoba, the years Russ Howard and Eddie Werenich and Wayne Middaugh were in Ontario, or the years Kevin Martin and Randy Ferbey were in Alberta. Unfortunately, in all those years, only one team could come out of each province.

"So I think it's just a great thing. It increases the depth and competitiveness of the Brier and makes every game important.

Even when two of the teams fighting out for last place are playing, in the past, they might be hitting the Patch the night before, because there wasn't much on the line. Now, there'll be so much on the line; you'll be tuning in because you want to see who comes out on top."

As they start to learn more about each other's style and nuances, Koe believes the best is yet to come for his new team.

"We've had a pretty good year, and obviously we have some real high expectations, just given all of the successes each of us have had on our old teams," said Koe. "But that being said, it does take a while to develop that chemistry and I don't even think we're close to where we can be in a couple of years. I think we'll only get better. We're still kind of learning what this team is going to be like, but I'm really encouraged.

"This was obviously our big goal this year - to get into the Brier. I think we have as good a chance as anybody. We've played really well the past few months and if we get off to a good start, I think we'll be in really good shape."

The challenge for curlers these days is finding a work-life-sport balance. Most still hold down day jobs. Koe has been with Talisman Energy for 14 years. He's multitasking this day - doing an interview as he's watching his nine-year-old daughter play ringette.

"It's just like any sport. If we could get up, go to the gym, practice for a few hours a day, go home - you'd probably be better at it. But that's not what we can do. We've got other priorities in our lives - and I think we're all okay with that."

Associated Graphic

Team Canada skip John Morris lines up his rock during a practice with his team in Calgary on Wednesday. They will compete in an especially talent-packed Tim Hortons Brier this weekend.

CHRIS BOLIN FOR THE GLOBE AND MAIL

What makes Price so good? Everything
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Sure, the goalie hasn't won anything for Montreal - yet. But his physical and emotional abilities are keeping his team in the game
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By SEAN GORDON
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Saturday, February 21, 2015 – Print Edition, Page S7


MONTREAL -- When Montreal Canadiens goaltender Carey Price is in a ruminative frame of mind - this happened often earlier in his career - he'll don a tracksuit and glide around a rink, alone, ripping off wrist shots.

Athleticism is an overused and unsatisfyingly vague word, but to witness the quality of Price's skating and shot is to realize he has oodles of it. Teammates will tell you he could easily have reached the pro ranks as a defenceman or a forward.

Playing net in the NHL is a hard ticket; doing it the way Price does - coiled in a crouch that's halfway between the position of a baseball catcher and an Olympic wrestler - requires uncommon gifts.

As the anniversary of his greatest professional triumph heaves into view - Feb. 23 will mark the first anniversary of Team Canada's gold medal at the Sochi Olympics - the 27year-old netminder is wringing the most out of his considerable talents.

There is Vézina Trophy buzz, there is Hart Trophy speculation; there is recognition from opposing players and coaches that he is the best goaltender in the game (pace, Pekka Rinne).

So what makes him so good?

The short answer is it's the innate ability that prompted the Habs to draft him fifth overall in 2005 - when Montreal already had a Hart-winning goalie in José Théodore - and led former general manager Bob Gainey to dub him "a thoroughbred."

It helps to be 6 foot 3 and have thighs as stout as 50-yearold timber, but beyond genetics, Price's competitiveness and technical qualities are what distinguish him from his peers.

As stats expert and goaliewatcher Chris Boyle puts it, Price has "probably the greatest set of weapons in the NHL."

Among them: a preternatural ability to read the game; quick, precise footwork; puck-handling savvy; the strength to hold off onrushing forwards; and the placid temperament to handle the crushing pressure of what ESPN magazine memorably dubbed the loneliest job in sports.

"There are literally hundreds of goalies who can come in and be the first star in an NHL game - look at [Arizona's] Louis Domingue and [Ottawa's] Andrew Hammond," said retired NHL goalie Marc Denis, a former Price teammate. "Becoming a real No. 1 is much harder."

Among Price's underappreciated abilities is his adaptability.

"The game changes; so do the top goalies," said Eli Wilson, a former NHL coach who runs a goalie school in Edmonton who worked with Price intermittently from the time he was in junior.

"If this was still the day of Bill Ranford skate saves, he would do that and be the best at it.

Whatever you want him to do, he can do it. Patient? He can do that. Aggressive? He can do that."

When Price came into the league, he typically stood tall to see over the traffic and relied on his reflexes and powerful lateral movement to react.

An ankle injury suffered not long before his first all-star berth in 2009 signalled the beginning of a fallow period - he would lose the starting job to Jaroslav Halak the following season - and when position coach Roland Melanson was replaced by Pierre Groulx, he began using elements of the technique that helped carry L.A.

Kings goaltender Jonathan Quick to the Conn Smythe Trophy (one of the style's signatures is the reverse VH, a pad-down manoeuvre to seal off the post from sharp-angle shots and wraparounds).

Since Stéphane Waite replaced Groulx in 2012, Price has evolved yet again - and the same can't be said of Quick, among others.

There's a popular perception Price has only really come into his own since Sochi, but that elides the form he began displaying in 2010-11, when he won 38 games and put together a career year.

Absent a six-week blip in 2013 - it's Price's bad luck that it coincided with the end of the lockout-shortened season and playoffs - he has been on a sharp upward trajectory.

By now, his stats for this season are well known: first in the NHL in save percentage, second in wins, 32 starts where he has allowed two goals or fewer - all this on a team that allows more shots on net than any other team currently in a playoff position and is in the bottom third of the league in run support.

It's true Price has reached new heights since he started working with Waite (who has groomed two Stanley Cup-winning goalies), but this is a player who managed to surpass his career average stats in 2011-12, a season in the which the Habs finished dead last in the East.

Waite's advice has been both simple and transformative.

Price has frequently alluded to his coach's injunction to be more "quiet," but Waite has also brought innovations to his style: the crouch, higher glove positioning and staying on his feet as long as possible while tracking pucks.

"You never see him trail the play. His patience is phenomenal. This patience allows him to maintain his skates longer than most goaltenders," said Boyle, whose work regularly appears on Sportsnet.ca.

"What we are seeing is a guy in his prime whose mind has caught up to the technical phenom that burst onto the scene at 20."

Wilson said Waite's philosophy - the former calls it "the lower approach to hockey" - has allowed Price to better navigate the thicket of bodies that is inevitably placed in front of him by opponents.

"It's also unleashed his athletic ability, which has always been there," Wilson said - it's easier to spring upward and sideways from a crouch than a more upright stance.

Denis, who now works as an RDS analyst on Habs broadcasts, said the technical evolution wouldn't matter as much if Price's understanding of the sport and knowledge of its players - he is an assiduous student of shooters' tendencies - hadn't also become more sophisticated.

"He's become aggressive at managing the game," he said.

Denis marvelled at how effortless Price made it look when the two did on-ice drills with Melanson, and said his ability to shake off mistakes - which Denis sees firsthand when broadcasting games from rinkside - has measurably improved.

"[Price] knows how to behave," Denis said.

Hark back for a minute to the late spring of 2010, when le tout Montreal was afroth over a divisive life-or-death question.

Jaro or Carey?

From today's vantage point, it seems quaint that it was ever an argument, but there it is.

Yes, Halak is having a fine season for a redoubtable New York Islanders squad, but anyone who would prefer him to Price today needs to re-evaluate their understanding of hockey.

True, he hasn't won anything yet for the Habs, but Price's erstwhile detractors in the fan base and commentariat owe him an apology; he doesn't care.

Nor is he preoccupied with individual honours.

A few weeks ago he eclipsed Hall of Fame goalie Patrick Roy on the Habs' career list for shutouts.

He greeted the landmark with his trademark imperturbability.

Price's sights are firmly set on another of Roy's achievements.

You know, the one where the goalie gets to lift the big trophy on the last day of the season.

Associated Graphic

The Rangers' Rick Nash, left, attempts to score on Habs goalie Carey Price on Jan. 29. Price is first in save percentage, second in wins and has 32 starts where he has allowed two goals or fewer.

BRUCE BENNETT/GETTY IMAGES

A little tinkering can pay large dividends
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The trade deadline action seemed humdrum on the surface, but there were a few deals that turned heads
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By ERIC DUHATSCHEK
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Tuesday, March 3, 2015 – Print Edition, Page S3


CALGARY -- eduhatschek@globeandmail.com

If you evaluate the NHL's trade deadline simply by the final hours of (in)action, it was a decidedly unsexy day punctuated by mostly minor deals, with no real marquee names changing jerseys.

But history shows the sort of strategic tinkering that took place Monday can sometimes pay larger dividends in a long Stanley Cup run than individual superstar additions. And there were a few deals that made you stop and ponder.

The Anaheim Ducks, for example, added three defencemen - James Wisniewski from the Columbus Blue Jackets, Simon Després from the Pittsburgh Penguins and Korbinian Holzer from the Toronto Maple Leafs, significant turnover for a team sitting first in the Pacific Division standings. But the Ducks wanted to get bigger on defence, and they wanted to do so at a price that made sense.

So Columbus had to accept Rene Bourque's contract to justify Anaheim taking on the final two years of Wisniewski's deal, while the Leafs received Eric Brewer in the Holzer deal. The Ducks are now eight deep on the blueline, prepared for the attrition that often accompanies a long playoff run, and in a division, the Pacific, that looks eminently winnable.

The Wisniewski deal nicely bookended the splashiest trade early on, when the Tampa Bay Lightning gave up a decent young defenceman, Radko Gudas, along with first- and third-round picks in the 2015 NHL entry draft to land defenceman Braydon Coburn from the Philadelphia Flyers.

It was a significant return for the Flyers for an asset they'd been talking about moving for some time, and marked the sixth firstrounder that changed hands during the runup to the deadline, an extraordinary development considering how good the 2015 draft is supposed to be.

Tampa had an extra first-rounder on hand, received from the New York Rangers in last year's deadline blockbuster that saw Ryan Callahan join them in exchange for Martin St. Louis - and mitigated the loss slightly by acquiring a pair of second-round choices from the Boston Bruins for Brett Connolly earlier on.

After their talks with the Toronto Maple Leafs about defenceman Dion Phaneuf went nowhere, the Detroit Red Wings went for a cheaper option, adding defenceman Marek Zidlicky from the New Jersey Devils for a conditional third-round pick. Detroit also added some size up front, acquiring Erik Cole from the Dallas Stars, a trade consummated between Red Wings general manager Ken Holland and his former assistant and close friend, Jim Nill.

But no one was dumping players overboard faster and harder than the Buffalo Sabres and Arizona Coyotes, both of whom significantly strengthened other teams for their playoff pushes.

Arizona sent its best forward, Antoine Vermette, to the Chicago Blackhawks and its second-best defenceman, Keith Yandle, to the Rangers as part of sweeping changes that also pushed another quality defenceman, Zbynek Michalek, out the door to the St.

Louis Blues. Not be to outdone, the Sabres traded their No. 1 goalie, Michal Neuvirth, to the New York Islanders for back-up Chad Johnson, and dispatched forwards Torrey Mitchell and Brian Flynn to Montreal and Chris Stewart to Minnesota.

Yandle is one of the highestscoring defencemen in the league, so the Rangers have shored up their one perceived weaknesses by adding a quality power-play quarterback.

Chicago is better, too, adding Vermette as well as Kimmo Timonen from Philadelphia. No one is going to replace the injured Patrick Kane, but Vermette gives the Blackhawks a versatile forward who can help Jonathan Toews in the faceoff circle. If Timonen gets up to game shape after missing the entire season because of an issue with blood clots, he is an excellent puck mover and will fit in well with coach Joel Quenneville's quick-strike offence.

Columbus also sent defenceman Jordan Leopold to the Minnesota Wild in exchange for Justin Falk, noteworthy mostly because Leopold's 11-year-old daughter, Jordyn, had written a letter to the Wild back in December, asking them to trade for her dad because he was "very lonely without his family. ... I am lost without my dad and so is my mom, my 2 sisters and my brother.

"To get to the point, the Wild have not been winning games and you lovely coaches are most likely mad about that but your team needs some more D men so can you please, please, please ask the Jackets if you guys can get him!"

Jackets GM Jarmo Kekalainen obliged and acknowledged part of the reason was to give "Jordan the opportunity to rejoin his family in the Twin Cities."

In all, the 24 deals that were made on deadline day reinforced the overall feeling in the NHL this year - that there isn't a clear-cut Stanley Cup favourite out there.

But a dozen teams have a chance if everything falls right for them.

Only six points separate the top six teams in the East, from No. 1 Montreal to No. 6 Pittsburgh, and the two best playoff teams in the West for the past three years, Chicago and the defending champion Los Angeles Kings, look more vulnerable than usual.

Every contender will need good health, good matchups and good luck, but after examining the field, all sorts of teams decided they were prepared to mortgage the future for help today. There'll be buyers' remorse later. Today, everybody loves their chances.

Follow me on Twitter: @eduhatschek

Associated Graphic

Defenceman James Wisniewski moved from the Columbus Blue Jackets to the Anaheim Ducks. The Ducks are now eight deep on the blueline, prepared for the injuries that accompany a long playoff run.

HARRY HOW/GETTY IMAGES

For rebuild to work, Leafs must get better at developing players
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Culture change needed at the top as Toronto seeks to restock farm team and plan for the future
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By DAVID SHOALTS
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Friday, February 20, 2015 – Print Edition, Page S3


TORONTO -- dshoalts@globeandmail.com

The Westminster Kennel Club certainly knows its dogs. Club officials contacted the Toronto Maple Leafs on Thursday to inquire about a possible copromotion with the team and Miss P, the Canadian beagle that won Westminster's best-in-show award earlier this week in New York. No, the request did not come because the Leafs slid to the status of worst pooches in hockey.

The suddenly famous Miss P splits her time between Enderby, B.C., and the Greater Toronto Area where she lives with her handler William Alexander in suburban Milton. Hence the interest from Westminster in teaming up for a promotion. The Leafs, no doubt wary of the litany of dog jokes that could be unleashed on social media, have not decided if they will participate.

Nevertheless, if one more dog joke can be excused, Leafs management will continue to judge its own dog show as the NHL season winds down. Almost all of the present roster is available to be moved as the league's March 2 trade deadline approaches. Bigger pieces such as captain Dion Phaneuf and leading scorer Phil Kessel may be shipped out in the summer when rosters can more easily accommodate big contracts.

Also under examination by Leafs president Brendan Shanahan and general manager David Nonis will be the roster of their AHL team now that they, as former president and GM Brian Burke did back in 2008 when he was hired, have taken a vow of rebuilding from within. Burke's plan went off the rails quickly when he made the Kessel trade for two first-round draft picks and a second-rounder, which is why the Toronto Marlies farm team's cupboard remains poorly stocked to this day.

A look at both the Leafs and Marlies rosters shows just how much of a challenge Shanahan and Nonis face. Remember, the alleged prospects on each roster represent the Leafs' efforts in the entry draft over the last half dozen years. After the Kessel trade, the Leafs hung on to their first-round picks and have had at least one since 2011, when they had two, forward Tyler Biggs at 22nd overall and defenceman Stuart Percy at 25th. Their firstround pick in 2012, defenceman Morgan Rielly, is on the big team while Fredrik Gauthier (2013) is still in junior hockey and their 2014 first-rounder, forward William Nylander, is with the Marlies.

After that, the prospect pile thins out considerably, which shows the obvious, that the Maple Leafs have never been much good at developing their own talent. Of the 20 players who dressed for Tuesday's 3-2 loss to the Florida Panthers, only seven were drafted or signed as youngsters by the Leafs. The culture change ahead of Shanahan involves much more than the one needed among the Leaf players.

The gold standard in this department, the Detroit Red Wings, have 19 homegrown players on their roster. Almost all of them, except for three or four like Pavel Datsyuk and Henrik Zetterberg who made the team right away, spent significant time with the Red Wings' AHL farm team.

If this rebuilding plan is going to work the Leafs have to get better at developing players and fast.

While judging players is always subjective, the Marlies do not look like a finishing school bursting with graduates ready to be NHL players let alone stars.

There are six players on the Leaf roster who have spent significant time with the Marlies. Only three can be considered decent NHL prospects and that includes centre Nazem Kadri and defenceman Jake Gardiner who have both been with the Leafs for at least the last two seasons. But both are a long way from establishing themselves as bona fide NHLers. Trevor Smith, 30, and Korbinian Holzer, 27, are not considered part of the long-range plan.

The third prospect is defenceman Andrew MacWilliam, 24, who was called up on Thursday on an emergency basis as the Leafs left for Carolina for Friday's game against the Hurricanes. His promotion might mean a trade for one of the other Leaf defencemen is close since an emergency recall is only made when a player on the roster is out with illness or injury or is expected to become unavailable. The Leafs did not identify such a player on Thursday.

Among the younger Marlies who have spent time with the Leafs are forwards Sam Carrick and Josh Leivo along with Percy and now MacWilliam. But it can be argued only Nylander, forward Connor Brown, MacWilliam and maybe Percy are showing they have the stuff to become NHL regulars.

That is a long way from the bumper crops the Red Wings get from their farm team.

Follow me on Twitter:@dshoalts

Associated Graphic

Forward Sam Carrick is one of a small group of Marlies players who have spent time with the Maple Leafs this season.

CLAUS ANDERSEN/GETTY IMAGES

Canada's countdown to the Cup
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With 100 days to go till the tournament, the women's soccer team and their meticulous coach are making lists and ticking boxes
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By NEIL DAVIDSON
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The Canadian Press
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Thursday, February 26, 2015 – Print Edition, Page S3


The clock is counting down on the Women's World Cup and Canadian soccer coach John Herdman is ticking boxes on his meticulous to-do list.

Herdman and his staff are renowned for their preparation, from how long it takes to drive from the team hotel to the stadium to strategy when you go down by a goal with 20 minutes left or you have a player sent off.

The 39-year-old British coach says his plan is detailed, but flexible enough to incorporate innovation from his players and support staff.

With just 100 days remaining to the June 6 World Cup kickoff as of Thursday, Herdman and Canada are in Cyprus preparing for the Cyprus Cup. They're using the tournament to run through a variety of on-field scenarios.

Next is bringing team chemistry "right to a crescendo," he said.

"So we're slowly identifying what people's roles are in the team and whether they can cope with the roles that they're going to be given," he explained.

"Because not every player can play every minute of every game.

But there are some players that are going to play a lot of the minutes.

"So can people take different roles and when you're given that role, can you still contribute to the culture that will help us win a World Cup?" After the Cyprus Cup, Herdman's team will play one last game - in Bondoufle, France, against the third-ranked French.

The ninth-ranked Canadian women open the 24-team World Cup on June 6 against No. 13 China in Edmonton before facing No. 18 New Zealand on June 11, also in Edmonton, and the 11thranked Netherlands on June 15 in Montreal.

The goal is to win Pool A, which reduces travel and should help avoid meeting a tournament heavyweight in the round of 16. But Canada could finish third in its group and still advance.

FIFA seeded Germany, the United States, France, Japan and Brazil atop the other five tournament groups. Sweden and England will also pose threats.

Herdman, who used to coach New Zealand, will likely name his 23-woman roster ahead of schedule at the end of April, so the suspense is over early and the team can look forward to its task.

"The longer you leave it, the more stress there is," he said.

"You don't want that."

He will also name four alternates. In the meantime, he is waiting to see if defender Lauren Sesselmann and midfielder Diana Matheson can recover in time from knee injuries.

As host, Canada avoided a qualifying process that saw 128 countries play 398 matches.

Herdman wrote his own pretournament road map, swapping in young talent and inviting elite teams to play Canada.

The charismatic Herdman has already shown he has the right stuff. Inheriting a broken team that finished last at the 2011 World Cup, he led it to bronze at the 2012 Olympics.

Captain Christine Sinclair became a national icon in a losing cause, scoring three goals in a memorable 4-3 semi-final loss to the United States at Old Trafford and berating Norwegian referee Christina Pedersen for her handling of the game.

Sinclair then picked the team up and helped it claim bronze in a 1-0 victory over France.

Veteran goalkeeper Karina LeBlanc, who has more than 100 caps for her country, is looking to inspire Canada again in what will be her fifth World Cup.

With 100 days left, she is buzzing.

"For us it's that excitement," said the 34-year-old from Maple Ridge, B.C., who will likely join Stephanie Labbé in backing up Erin McLeod. "It's coming, it's closer. This is what we've been waiting for, this is what we've been dreaming about.

"As a child you dream of playing in an Olympic Games or a World Cup. But you never really dream of it being in your home country. So it's something that we're embracing. People talk about pressure but, to us, it's an opportunity to really make this country see the women's game, see the sport that we love and have a passion for. And for us, it's an honour. We'll get to do it in front of our friends and family, but also the nation that we represent. And that's what we've been looking forward to."

The World Cup, which will stage matches in Moncton, Montreal, Ottawa, Winnipeg, Edmonton and Vancouver, will wrap up July 5 with the gold medal in B.C.

Place Stadium.

Associated Graphic

Canada's head coach, John Herdman, talks to Desiree Scott, right, during a friendly against Germany in June, 2013.

MARTIN MEISSNER/AP

How the Leafs learned to love analytics
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By JAMES MIRTLE
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Monday, March 2, 2015 – Print Edition, Page S2


BOSTON -- jmirtle@globeandmail.com

His presentation had the weighty title of "How Analytics Has Limited the Impact of Cognitive Bias on Personnel Decisions" and it lasted all of about 25 minutes in a small room at the Boston Convention Center on Saturday morning.

It was really the Toronto Maple Leafs finally allowing a peek behind the curtain, with assistant GM Kyle Dubas serving as a guide to how the richest team in hockey has changed.

Yes, they are using analytics, he told the audience at the Sloan Sports Analytics Conference.

No, they aren't surprised they haven't had instant results.

"There's teams that are so far even ahead of us in our own league," Dubas explained after his presentation, which outlined five biases - confirmation, recency, information, sample size and simplicity - that using statistics have helped him avoid. "And we're trying to play catch-up as fast as we can. You've got to watch it because if you try to rush it you stumble and fall."

The Leafs may not have been rushing, but their thought process has certainly undergone a rapid overhaul the past seven months. New president Brendan Shanahan made hiring Dubas his first dramatic move last July and the culture within the franchise has slowly evolved from there.

GM Dave Nonis remains on board but as a willing mentor and pupil, someone willing to teach but also to learn what Dubas, and his growing team of analysts and counters, see in hockey's new numbers.

After years of being represented at Sloan only by former GM Brian Burke, who offered his annual griping about analytics routine on the weekend, the Leafs had five staffers in attendance - the most of any NHL team and more than most professional teams, period.

The difference in the messaging between Leafs management, old and new, couldn't be more stark.

"The notion that you can sit behind a computer and find athletes is bullshit," Burke grumbled during his time on a panel with statistician Nate Silver, among others. Later, he added, "This is still an eyeballs business." "What analytics taught me is your eyes and your mind are lying sons of bitches in the worst absolute way," Dubas said earlier in the day, directly refuting Burke's eyeballs adage.

Sloan is always about a lot of numbers. But where there's universal agreement between everyone is that winning is the end goal, and wins have been hard to come by in year one under the new regime in Toronto.

Much of his talk at Sloan centered on his three years with the Soo Greyhounds in the Ontario Hockey League. Dubas explained some of his early failures and eventual success using analytics there to turn a basement-dwelling team into a contender in relatively short order.

The parallels with the Leafs were obvious - and it was hard to not read into his comments when he discussed the transformative effect a coaching change had with the Greyhounds.

The Leafs made a similar move in firing Randy Carlyle in early January but have remained in freefall (4-16-2) despite an uptick in analytics like possession (from 44.2 to 48.5 per cent).

The implication was that will change and the results will come.

"What I learned was the extreme value of the buy-in throughout the organization," Dubas said as he presented a graph of the Greyhounds dramatic improvement in possession data after hiring Sheldon Keefe as coach. "From the president down to the manager to the coach and scouts ... you're going to have a lot more success than if you have one person on your staff alone saying this is important.

The Leafs now have that buyin, especially where it's most important. Shanahan believes hockey's data movement will help them, and he's green-lighted the use of considerable resources for new hires and technology this season.

Beyond the buy-in, the second part of Dubas's message at Sloan was that this transformation will also take time - especially for the Leafs.

What that means is it could take years - three, four or even more - to see the real results from the Leafs pursuit of this analytical path.

They've made major strides, but they've also only just begun.

"I think it's going to take longer here," Dubas said. "In the OHL, your players, their eligibility, it expired. Here you draft a player and you might have four or five years before he's contributing. Or more. It's very rarely an overnight thing."

Suarez leads Barca past Man City
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By STEVE DOUGLAS
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The Associated Press
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Wednesday, February 25, 2015 – Print Edition, Page S3


MANCHESTER, ENGLAND -- Luis Suarez marked his return to England by scoring both of Barcelona's goals in a 2-1 win over Manchester City in the Champions League on Tuesday, putting the Spanish club within sight of the quarter-finals for an eighth straight year.

However, Barcelona could live to regret Lionel Messi having a penalty saved in the final seconds of the last-16 first leg at Etihad Stadium.

Suarez, who joined from Liverpool for $130-million (U.S.) last summer, scored close-range goals in the 16th and 30th minutes as Barca controlled the first half.

City improved considerably after the break and Sergio Aguero slotted in a 69th-minute goal after fine build-up play. City's momentum in the second half stalled when defender Gaël Clichy was sent off in the 73rd for getting a second yellow card.

In the night's other first-leg match, Juventus beat Borussia Dortmund 2-1 in Turin, Spain.

City lost 4-1 on aggregate to Barca at the same stage last season - and had a player sent off in both legs.

Messi could have put the match virtually beyond City when he won a penalty for a foul by Argentina teammate Pablo Zabaleta. But the Champions League's all-time leading scorer - with 75 goals - saw his spot kick parried away by City goalkeeper Joe Hart, and then headed the rebound wide with the goal at his mercy.

With seven goals in 22 appearances for Barca, Suarez has been steady - if not spectacular - in his first season in Spain and has been looking for a big game to announce his arrival at the club.

All it needed was a return to England. Showing the instincts that made him so lethal at Liverpool, the reigning player of the year in England pounced on a poor headed clearance by City captain Vincent Kompany and swept a low left-foot finish past the stranded Hart to cap a confident start from Barcelona.

Suarez was denied by Hart's legs after another sweeping length-of-the-field move that had its origins with Messi nutmegging David Silva midway in the Barca half. But the striker didn't have to wait long for his second goal, as Messi drifted through two tackles and passed to Jordi Alba, whose delayed cross was glanced in by a sliding Suarez.

Neymar's lob was cleared off the line and Dani Alves's mis-hit cross bounced off the crossbar as Barca continued to create openings at will.

City started the second half with much more purpose. An unmarked Edin Dzeko headed straight at goalkeeper MarcAndre ter Stegen, Aguero curled wide from just inside the box and Martin Demichelis was also denied by ter Stegen.

With Barca lacking intensity, City became the dominant team and reduced the deficit when Aguero sped onto a deft layoff from Silva and shot high into the net from 12 metres.

Clichy had already been booked in the 59th for a foul on Ivan Rakitic when he went in late and high on Alves. His protests didn't stop referee Felix Brych from showing a second yellow.

Fellow full back Zabaleta exacerbated Clichy's mistake by giving away the last-minute penalty, but Hart's save gave City hope for the second leg on March 18 at Camp Nou.

Associated Graphic

Barca forward Luis Suarez, right, scores on Man City goalkeeper Joe Hart as defender Vincent Kompany watches at Etihad Stadium on Tuesday. Suarez has scored seven goals in 22 appearances for Barca.

PAUL ELLIS/AFP/GETTY IMAGES

Barring Leafs blockbusters, trade deadline could be a dud
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By JAMES MIRTLE
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Tuesday, February 24, 2015 – Print Edition, Page S3


TORONTO -- jmirtle@globeandmail.com

A combination of factors have conspired to help kill the NHL's trade deadline.

And no offence is intended to Antoine Vermette, the dependable Phoenix Coyotes centre who tops many lists of the "biggest" names on the block.

Under the league's collective agreement, most stars or nearstars are signing long-term contracts. Most long-term contracts come with high salaries and notrade clauses. Most teams are either unable or unwilling to fit those kinds of deals into their lineups at midseason, especially when the Canadian dollar's drop is expected to keep next year's salary cap close to flat.

So the talk all around the league is that movement will be limited to rentals - players on expiring contracts. Because so many players are already signed, however, few ever make it to free agency any more, which means there aren't even many rentals from which to choose.

Last season, 20 trades were made on the deadline involving 38 players. Many were prospects or depth players, but a handful of decent names moved: Marty St. Louis for Ryan Callahan, Marian Gaborik to Los Angeles and Thomas Vanek to Montreal .

Few expect anything resembling that to happen next week.

Unless the Toronto Maple Leafs start pulling the trigger.

A lot of teams are out of the playoff race already - according to sportsclubstats.com, 11 have less than a 9-per-cent chance of making the postseason - but few are looking to radically reshape their roster the way the Leafs are.

More than a dozen Toronto players are potentially available if the right deals come together, a list that includes obvious names such as rentals Dan Winnik, David Booth and Olli Jokinen, but also others with substantial dollars and term left on their deals.

One thing that makes the Leafs unique is they're not necessarily looking for a typical return. During their rebuilding process, they can take back bad contracts, retain salary or any number of other creative options if it helps dump a long-term contract or get a prospect or pick.

If Brendan Shanahan follows through and goes the full teardown route, his biggest challenge will be moving out the No-Trade Five - Phil Kessel, Dion Phaneuf, Joffrey Lupul, Tyler Bozak and David Clarkson - between now and next fall.

In the case of Kessel and Phaneuf, their huge contracts complicate things.

In the case of Lupul, his injury history is a problem, as is Bozak's awful second half of the current season (13 points in his past 35 games). And Shanahan will need an exorcist to move Clarkson's deal out the door.

It may well be that these big pieces are easier to deal in the offseason, when contracts have expired and teams miss out on the few free agents available. But the Leafs are going to be listening intently in the next seven days on almost everyone, hoping the lack of other talent on the market works in their favour.

They're willing to be creative.

They'll probably have to be.

But if they can't make anything happen, it very could be a quiet day around the league.

Look for Leafs, Habs to be deadline players
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By STEPHEN WHYNO
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The Canadian Press
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Friday, February 27, 2015 – Print Edition, Page S3


Canada's seven NHL teams have seven very different perspectives and goals to accomplish before Monday's NHL trade deadline. Here's a look at where they stand as the clock ticks down to 3 p.m. (ET) on March 2.

MONTREAL CANADIENS

Status: Buyers Skinny: General manager Marc Bergevin already made a hockey trade by swapping skilled but inexperienced winger Jiri Sekac with Devante Smith-Pelly, a bigger and more physical player from the Anaheim Ducks. The Habs could use another defenceman, though, especially a righthanded one.

OTTAWA SENATORS

Status: Sitters Skinny: If the decision has been made not to trade long-time tough guy Chris Neil, the Senators may be best suited to stand pat. Defenceman Marc Methot is off the market thanks to his new contract, and Ottawa doesn't have many assets to sell off for spare parts.

TORONTO MAPLE LEAFS

Status: Sellers Skinny: Cody Franson, Mike Santorelli and Daniel Winnik are already gone as GM Dave Nonis got a jump on the trade-deadline frenzy. But the Leafs are far from done, especially with Olli Jokinen, David Booth and Korbinian Holzer as impeding free agents and a large-scale rebuild coming soon.

WINNIPEG JETS

Status: Buyers Skinny: The Evander Kane blockbuster set the table for what should be a legitimate playoff chase in Winnipeg, and the deal for Jiri Tlusty gave the Jets more needed depth. But with a chance to make the postseason for the first time in this incarnation, the Jets could still make another move.

CALGARY FLAMES

Status: Sitters Skinny: The Flames are in the playoff race in the Western Conference like the Jets, but they're still supposed to be on the upward climb and have a longterm plan. Other than dealing pending free agent Curtis Glencross, GM Brad Treliving might sit on this team and hope it can get it done.

EDMONTON OILERS

Status: Sellers Skinny: Despite being last in the West, the Oilers aren't expected to be active because they don't have many movable pieces and don't want to blow up their core of Taylor Hall, Ryan Nugent-Hopkins and Jordan Eberle just yet.

Defenceman Jeff Petry is Edmonton's biggest trade chip.

VANCOUVER CANUCKS

Status: Sitters Skinny: Ryan Miller's injury puts the onus on Eddie Lack and Jacob Markstrom, but the Canucks aren't in the market for another goaltender. Barring a collapse, Vancouver should be a playoff team and would hope to get Kevin Bieksa back from a hand injury at some point.

140-character reviews
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By DAVE MORRIS
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Friday, February 27, 2015 – Print Edition, Page P32


Girl in a Band

($35, HarperCollins Canada/Dey Street)
By Kim Gordon
The title is ironic, fitting for a '90s rock icon. @thesonicyouth co-leader is many things: musician, ex-YorkU student (!), rad storyteller.

Road to Power: How GM's Mary Barra Shattered the Glass Ceiling
($36, Bloomberg Press/Wiley)
By Laura Colby
Is this GM lifer different enough from past CEOs to flip the switch (#sorrynotsorry) on the famously sclerotic automaker?

Game, Set, Match: Billie Jean King and the Revolution in Women's Sports
($35, University of North Carolina Press)
By Susan Ware
#notallmen were as crass as Bobby "keep them pregnant and barefoot" Riggs, but some men definitely need humbling.

Dave Morris

Associated Graphic

Illustration Antony Hare

Saturday, February 28, 2015

A WEEKLY ROUNDUP OF ODDS AND ENDS FROM THE WORLD OF BUSINESS
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By IAN MORFITT
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Friday, February 20, 2015 – Print Edition, Page B2


Help wanted: must love snow, penguins

Canada Post Corp. may not need the same staffing levels as it moves toward ending home delivery, but job opportunities exist elsewhere, if you're prepared to move south. Way south.

The Antarctic Heritage Trust has put out the call to "committed individuals" interested in joining a team of four to spend five months running the shop, post office, maintenance and museum operation in beautiful downtown Port Lockroy (Population: 4) on the tiny Goudier Island, just off the Antarctic Peninsula.

Among the qualities the trust is looking for is good health and fitness, retail experience and co-ordination. This last quality is needed, the job description notes, as candidates must be able to "carry a big heavy box over slippery rocks and slushy snow whilst dodging penguins."

EU's power rangers step it up a notch

On the heels of bans on incandescent light bulbs and highpowered vacuum cleaners, the European Union is taking aim at the kitchen.

Kettles, toasters, bread makers, steamers and blenders are all in the EU's sights, but today the curtain falls on the sale of energy-wasting ovens and stovetops as the EU continues to roll out its program to slash household energy use.

EU directives have long been a favourite pet peeve of euroskeptics, and their banner carrier, the Daily Mail, sounded the alarm for cooking appliances a month ago: "Now Europe comes for the Sunday roast."

Coffee makers have already taken one for the team, Reuters reports, with last month's directive that requires insulated jugs and warming plates that power down five minutes after brewing.

And don't even mention "Hoovergate," the hue and cry which arose when the EU's Sept.

1 ban on high-powered vacuum cleaners sparked panic buying, with stock flying out the doors faster than euros out of a Greek bank.

But there's another benefit to the ecodesign program - European appliance makers will gain an advantage over cheaper foreign manufacturers.

"These rules mean that design standards will go up, and lowquality Asian imports that cannot stand the heat will have to leave the kitchen," Stamatis Sivitos, campaigner for the lobby group Coolproducts Campaign, told Reuters on Thursday.

Carnegie Mellon wants ... not you

Carnegie Mellon University's graduate computer science program sent out about 800 e-mailed messages around noon on Monday congratulating applicants on being accepted.

Later that evening, the prestigious Pittsburgh institution sent out a second message to the lucky grad students: Sorry, you're not in - we goofed.

The initial "Welcome to Carnegie Mellon!" messages were the result of "serious mistakes" (you think?) in the university's process for generating acceptance letters, and Carnegie Mellon would conduct a review to prevent another error, spokesman Kenneth Walters said.

"We mistakenly sent you an offer of admission to Carnegie Mellon's MS in CS program," the notices said.

"This was an error on our part. While we certainly appreciate your interest in our program, we regret that we are unable to offer you admission this year."

Maybe they should think of getting some kind of computer whizzes in to to fix the problems with the ... graduate computer science program system.

By the way, Carnegie Mellon's computer science graduate school tied for No. 1 with Massachusetts Institute of Technology, Stanford and the University of California at Berkeley in U.S.

News & World Report's most recent rankings, according to Associated Press.

Help wanted: must love cash, have ego

"[Hedge funds managers] earn half the performance of index funds, charge 30 times the fees of mutual funds, pay half the income tax rates of school teachers, have triple the ego of rock stars and fewer disclosure requirements than the NSA."

Motley Fool columnist Morgan Housel's imagined take on a conversation between managers of hedge funds, which he calls indistinguishable from most mutual funds other than the fact their fees are astronomically higher.

Anyone want to split the bill?

Vice Media Inc. chief executive Shane Smith had a good week at the blackjack tables during the Consumer Electronics Show in Las Vegas last month, and so naturally wanted to treat himself and friends to a nice dinner.

And when your winnings hover around $1-million (U.S.), as his guests told The New York Times, you might well want to splash out a bit. And that's what the native Montrealer did, ringing up a $300,000 tab at the Prime steakhouse at the Bellagio casino.

No word whether he checked each item on the bill - the highest-priced main course is a 28-ounce bone-in rib-eye for $85.

But with $20,000 bottles of wine in free flow, and throw in appetizers and desserts, you can get to 300 grand pretty fast.

U.S. student debt nears Canada's GDP

So just how big has the U.S. student loan debt load gotten? Big. Plenty big.

Their total debt accounted for the smallest proportion of Americans' household debt until 2009, Quartz reports.

But things turned around after Americans paid down their household debt during the recession, while students continued to borrow for school, even in the face of rising tuition costs.

Now, just five years later, $1.2trillion (U.S.) in outstanding U.S.

student debt is higher than all other types of non-mortgage debt (which still accounts for 69 per cent of Americans' total borrowing).

Another way of looking at it: The debt load of American students has far surpassed the GDP of Australia, Ireland and New Zealand combined.

And if it continues to rise along the same trajectory, its next milestone - Canadian GDP, at $1.5-trillion - won't be far off.

imorfitt@globeandmail.com

Will Merkel keep austerity's enemy closer?
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By ERIC REGULY
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Saturday, February 21, 2015 – Print Edition, Page B2


LONDON -- ereguly@globeandmail.com

Germany is playing a dangerous game. It may well succeed in crushing Greece's ability, though not its desire, to escape debtor's prison. But at what cost to European unity? Greek resentment of Germany is palpable and the rise of the anti-austerity parties across southern Europe - some on the far left, others on the far right - shows that the sentiment is spreading at an alarming rate. The political centre is not holding and locking Greece into austerity-hell could make the centre disintegrate.

Relations between Germany and Greece are poisonous - neither side trusts the other. Greece does not believe Germany and its pro-austerity allies, including Finland and the Netherlands, will cut it any fiscal slack in spite of the dire state of the Greek economy.

Germany doesn't believe Greece has any intention of reforming its economy in spite of endless promises to do so. Since Germany is Greece's single biggest bailout creditor and the effective leader of the euro zone finance ministers, who will decide Greece's fate, Greece will surely have to buckle.

Greece's new radical left Syriza government, led by Prime Minister Alexis Tsipras, was elected in January with a compelling mandate to put Greece on a new economic course after five years of grinding recession. The plan was to negotiate an end to the austerity programs that have deepened the downturn and find a way to write off a chunk of Greece's debt, which is the highest in Europe, at 175 per cent of gross domestic product. The latter effort failed within minutes. Now the former is failing too. The Eurogroup rejected the first two Greek proposals for a new financial and reform package and, on Friday night, tentatively accepted a third proposal, one that came after Greece substantially diluted its demands. It will see Greece's financial lifeline renewed for four months, but only if Greece's economic reform commitments, which are yet to come, are accepted by the euro zone's finance ministers.

It is now is abundantly clear that Greece will get little of what it campaigned for during the election. Germany has employed a binary negotiating stance: Extend the existing bailout program and all the austerity conditions that go with it or you're free to leave the euro zone.

Germany is setting itself up for a Pyrrhic victory, for alienating Greece is to alienate the other struggling economies on the euro zone's Mediterranean frontier, each of which has increasingly popular protest parties.

Germany's strategy makes sense on a certain level. Roughly half of Germans think Greece has no business being in the euro zone, given its aggressively uncompetitive economy and its apparent allergic reaction to reform and paying taxes. Their view is that the European Union used the twin bailouts, worth 175-billion ($250-billion), to spare Greece from self-immolation and an almost sure exit from the euro. In exchange, the Greeks should meet the bailout conditions with obedience and good grace, as Ireland and Portugal did. To reverse course and dilute Greece's bailout conditions would cost German Chancellor Angela Merkel and her Christian Democrats dearly in any election.

The strategy might be less parochial than it appears. Germany might be thinking: What better way to discourage Syriza look-alikes than ensure the failure of Syriza's bid for freedom?

If Syriza were to get what it wants, the anti-austerity parties in Portugal and Spain would surely demand equal treatment. Already, Podemos, the Spanish protest movement with Marxist roots and links to Syriza, is leading the polls, a remarkable achievement for a party that did not exist a year ago. In Portugal, another fiscal basket case, the opposition socialists are gaining momentum and will likely form the next government. It was the socialists who negotiated Portugal's austerity-laden bailout package in 2010. Now, as they attempt a comeback, they insist austerity has pushed the country into deflation and poverty.

Berlin's calculus might be horribly wrong, for ensuring Syriza's negotiating failure could easily encourage the protest parties in Greece and beyond as anger against the rich creditor countries in northern Europe intensifies. In a recent interview with The Globe and Mail after the Jan. 25 election, Athens Mayor Giorgos Kaminis said his biggest fear was the rise of Golden Dawn, the violent neoNazi party that placed third in the election, with 6.3 per cent of the vote. "This [Syriza] government represents the left alternative and if we see it failing, then we will see the extreme right alternative - those fascists - gaining ground."

Germany is lucky in that most of the protest parties in southern Europe, including Syriza and Podemos, want their countries to stay put in the euro zone. That could change. Throughout the south, support for the euro, while still fairly high, is falling. In Italy, all three of the main opposition parties have adopted an anti-euro stance.

If Syriza is crushed and Greece remains trapped in a deflationary spiral, where high unemployment and poverty remain rife, how much longer can support for the euro last? Already, the view among many Greeks is that exit from the euro, and reprinting the drachma, would cause no more economic and social hardship than keeping the euro. Millions of Portuguese and Spanish are contemplating the advantages of going back to currencies that could be devalued. Germany's hardline tactics on the Greek bailout are laying the foundation for an open political revolt in southern Europe. The risk of financial contagion has been replaced by the risk of political contagion so potentially deadly it could kill the euro zone.

Follow me on Twitter:@ereguly

HSBC: When a bank becomes too big to manage
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By ERIC REGULY
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Saturday, February 28, 2015 – Print Edition, Page B2


ereguly@globeandmail.com

Complicit or incompetent. Those are the accusations typically made against the CEOs of banks that have behaved badly. Sir, either you were aware of the crime, or breach of regulations or ethical standards, and did nothing about them, which makes you complicit. Or you were unaware of them, which makes you incompetent. Either way, you have no business running a bank.

But there may be a third category in which bank CEOs could be thrust - that of the simply overwhelmed. It is in this category that HSBC boss Stuart Gulliver fits.

Mr. Gulliver is not a crook, in spite of the revelation this week that he stashed his bonuses in a secret Swiss account controlled by a secret Panamanian company - a Guardian investigation this week made them unsecret, much to his embarrassment. He is certainly not incompetent. He has spent 35 years at HSBC, rising through the ranks to the top job at one of the world's top banks (and the biggest bank in Europe), like a sailor on his way to an admiralship. No scandals or employee revolts marred that progress. While not considered visionary, he is regarded as an able technocrat.

By his own admission, however, he couldn't keep track of all his managers in all his departments in all those countries. HSBC is the most international of the international banks. It now has 257,000 employees in 73 countries and, until recently, had a lot more.

"Can I know what every one of 257,000 people is doing - clearly I can't," he said during questioning early this week before the British Parliament's Treasury select committee.

In other words, epic misbehaviour such as the scandal at HSBC's Swiss private bank, now under investigation for aiding and abetting tax avoidance, tax evasion and "aggravated" money laundering, could happen again.

All of which raises the question: If some banks are too big to fail, are they also too big to manage? And if they are too big to manage, shouldn't they be forced to shrink? A smaller bank would be easier to manage and regulate, therefore less able to hide rogue or criminal operations, and would pose less risk to the taxpayer were it to implode, as Lehman Brothers did in 2008, almost bringing down the global financial system with it.

HSBC was, and still is, a monster by any measure - assets, employees, countries, businesses, influence, lobbying power. The bank that began life in 1865 as the Hongkong and Shanghai Banking Corp. used to be a highly disciplined operation that focused on trade finance. The model more or less remained intact until the 1990s, when the concept of bigness for the sake of bigness penetrated the psyche of HSBC's bosses, no doubt, in good part, because big banks paid bigger salaries and bonuses.

HSBC and many of its rivals, among them Royal Bank of Scotland (briefly the world's biggest bank) and JPMorgan, became massive wholesale and retail supermarkets, enamoured with cross-marketing and economies of scale, providing all services to all people. And that meant massive acquisitions, almost all of them slavishly endorsed by shareholders and boards of directors.

HSBC became a mergers and acquisitions machine. Under Sir John Bond, who was chairman from 1998 to 2006 (during which time he put a lot of effort into making HSBC Canada a credible player), HSBC's global employment well more than doubled to 330,000 as bank after bank was hauled into the fold. One of the biggies was Household Finance, the consumer finance bank in the United States that would play a starring role in the 2008 financial crisis.

HSBC's sheer size obviously made it impossible to manage effectively. The bank in recent years has been hit by scandal after scandal. There was the London interbank offered rate - Libor - scandal, the mortgage misspelling and foreign exchange scandals, plus the money-laundering debacle that, in 2013, saw the bank pay $1.9-billion (U.S.) to settle American charges that its shameful practices allowed Latin American drug cartels to launder billions of dollars through HSBC.

"It's a terrible list," HSBC chairman Douglas Flint admitted in Treasury select committee questioning.

And now comes the news of the Swiss tax scandal and Mr. Gulliver's use of the Swiss and Panamanian accounts. The accounts were legal - the CEO said he set them up to keep his bonuses secret from the prying eyes of HSBC's Hong Kong and Swiss staff, not to avoid or evade taxes. That may be perfectly fine, but what an odd admission. In effect, he was saying he could not even trust his own employees, another indication that he was running a bank that was really too big to run.

To his credit, Mr. Gulliver is shrinking the bank. Since 2011, when he became CEO, he has unloaded 77 businesses. He is trying to kill off the federal structure that gave far-flung divisions too much autonomy - HSBC will become more centralized.

But HSBC is still an oversized octopus and it's not alone in the banking world. If bank bosses want to build global empires, they and the regulators that allow them to get so big have a duty to ensure that they can be properly managed. Big is not best in banking. In HSBC's case, it was a liability.

A radical idea: Fold the league tables
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By TIM KILADZE
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Tuesday, February 24, 2015 – Print Edition, Page B2


tkiladze@globeandmail.com

Forgive me if this sounds like blasphemy. But for the sake of so many peoples' mental health, Bay Street should banish its beloved league tables.

For anyone who isn't well versed in the art of deal-making, league tables are the annual rankings of investment banks and corporate law firms compiled by market data specialists such as Thomson Reuters and Bloomberg. They are one of Bay Street's most-watched measures of success.

Whenever a deal closes, the lead advisers are allocated a portion of the transaction's value - the top two underwriters for a deal worth $1-billion, for instance, get credit for $500-million each. At year-end, each adviser's deal values are summed, and those with the highest totals are said to "win" the tables.

One of the core problems, though, is that tables are far too subjective - the methodology has gaping holes that make the rankings easy to game. Every December, untold amounts of anxiety ripple through Bay Street as each adviser covertly argues with the data firms and media outlets in favour of the methodology that makes themselves look best.

Because we print the tables, journalists brace themselves for an annual onslaught. And it can be a bloodsport. A law firm once jokingly sent a colleague of mine a hard hat to serve as protection from the barrage of inquiries.

I've also been on the other side and I've seen the stress these tables create up close. During my brief stint on Bay Street, a managing director I worked with would call the latest league tables up on his Bloomberg terminal on slow afternoons and stare at them for a good 15 minutes straight, as if he was looking at the Matrix.

When gaming the system, the first rule is to play with your footnotes. The next time you see an adviser boast about its ranking in a presentation, make sure to read the fine print. I can almost guarantee there will be multiple footnotes that clarify the criteria at the bottom of the PowerPoint slide.

Because no matter where the firm ranks in total deal flow, the poor analyst or associate tasked with putting together the slide deck will miraculously find a way to make sure his or her firm comes first. Maybe the firm ranked sixth in overall deal value, but first in total number of deals. Never mind that the majority of its deals were tiny - a No. 1 ranking is a No. 1 ranking.

Then there's the issue of lead mandates. In many annual tables, only the "lead," or top, advisers share the credit for a deal. But big deals are usually spread across a number of underwriters who collectively share the risk. Investment banks can earn big fees for being secondor third-tier underwriters in scores of deals, but they rarely get credit in the rankings.

And the poor corporate bankers. They also get shafted. Ask an adviser why they were named the lead underwriter in a big deal, and the investment bankers will likely take credit for their relationship with the issuer or the expertise they provide.

The truth, though, is that many dealers win mandates simply because they lend money to the issuer - something the corporate bankers control.

Some recent offerings lay this out clearly. Read through the prospectuses for both Bombardier Inc.'s large offering and the coming Cara Operations Ltd. IPO, and you'll see the lead underwriters are those who lent money to the respective issuers.

In some ways, the annual gamesmanship is just part of life on Bay Street. From afar, it can seem pretty benign. But there's a deeper issue.

Forget the quibbles about "lead" dealers and lending relationships for a second. Where league tables really distort the truth is with major acquisitions that are ultimately written down, or off. Scores of mining deals, both before and after the crisis, propelled advisers to the top of the rankings, but years later many of these deals created impairment charges worth billions of dollars after the market turned south.

You would think that the affected advisers would be humble about their roles in such deals. Yet I've sat through recent meetings where the affected underwriters boasted about winning the tables during the resource bull years.

Look, no awards system is perfect. Everyone knows the Oscars and Grammys are deeply flawed, for example.

But that doesn't mean Bay Street's system can't be improved. If banishing the tables is too much to stomach, let's start with something small. For the sake of your analysts and associates: no more footnotes.

Alberta's dinosaur in the room has a chance to evolve
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By JEFFREY JONES
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Wednesday, February 25, 2015 – Print Edition, Page B2


CALGARY -- jeffjones@globeandmail.com

The oil-price crash gives Alberta a solid excuse to finally get serious about green energy.

The province has toyed and tinkered with a strategy for wind, solar and other renewables for years, partly in hopes of showing the country and international trading partners that its leaders have more than just hydrocarbons on the brain.

Now, with the the possibility of a recession looming as the oil patch slashes budgets and bleeds staff, it makes both environmental and economic sense to branch out with incentives for alternative energy.

Why not make use of the slackening in labour markets to help build a sector that will help Premier Jim Prentice achieve his stated goal of positioning the province as both an energy and environmental leader? It would go far beyond just short-term job creation.

It's not as if this hasn't been discussed enough. The idea of an Alberta alternative-energy policy was among several recommendations made in 2009 by the Clean Air Strategic Alliance, a group of smart people from government, industry and environmental organizations. The alliance said that green energy should be encouraged for its environmental, economic and social benefits.

Since then, there's been much talk and no policy.

The last time the issue looked to be on the front-burner was more than a year ago, when former Alberta premier Alison Redford named Calgary MLA Donna Kennedy-Glans associate minister of electricity and renewable energy.

She had been expected to usher in a new framework for alternative energy some time last year. But the work was soon thrown into disarray as Ms. Kennedy-Glans went into selfimposed exile from the Redford government in the buildup to the premier being shunted out the door amid a scandal over lavish spending and criticism over her leadership style.

Then, policy took a back seat to politicking as the Tory leadership race shifted into gear over the spring and summer. The other piece of important work caught in the party's machinations was its climate-change strategy and potential for higher and more expansive carbon levies for industry.

A renewed industrial-carbonreduction plan had been due last September. It was pushed back to December, at which point, Mr. Prentice said the policy needed more fine-tuning and would be delayed to about the end of June. One assumes the policy is being hammered out in tandem with a plan for renewables.

There is no reason to dither any more. The Premier told The Globe and Mail recently that economic diversification is back in vogue in Alberta as the government looks to plug a budget hole caused by a severe reduction in revenue from the oil and gas industry.

He said diversification is targeted around the pillars of energy, agriculture and tourism. Certainly, a serious push into alternative energy at both the large grid and small generation levels would confer large benefits to all three.

For energy, the sector and government have been stung by criticism that Alberta is a dinosaur when it comes to its carbonintensive oil sands sector, despite the current $15-a-tonne carbon levy. A bigger shift from coal in power generation will only help its cause in the United States and elsewhere.

Here are a couple ideas that have been kicked around.

The province is Canada's thirdlargest wind-power generator, and there's still breeze to go around. The industry enjoyed a building boom in its early years, but development tailed off as financing became tough to secure due to volatile power pricing. The government could provide some kind of electricity-market stability for the sector, which would help bring more capital into the sector.

On the small-scale front, many Albertans are willing to embrace technology such as rooftop solar power, if only a market mechanism existed to provide the real benefits of contributing power to the grid at peak demand times, which coincide neatly with when the sun is shining. Currently, solar generators are only able to get the lower retail price.

Policy that brings environmental benefits in energy, investment and job creation just when the economy could use it - what's not to like?

Associated Graphic

Though Alberta is Canada's third-largest producer of wind energy, there is ample room to grow.

TODD KOROL/REUTERS

Toronto condo market booming again
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While banks and other lenders return to the market, the latest wave of completions and sales signals recent lull could be over
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By TAMSIN MCMAHON
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Monday, March 2, 2015 – Print Edition, Page B3


TORONTO -- After years of slow growth, Toronto's condo market has come roaring back to life.

Builders were putting the finishing touches on nearly 10,400 new condo units in January, eight times more than the monthly average over the past decade, Bank of Montreal senior economist Sal Guatieri said in a report last week.

The vast majority of the new condo units have already been sold. Still, the influx of new units has helped push the number of unabsorbed condos - those that have been built but not sold - to a 21-year high.

It is a dramatic rise for a city whose condo market has been at the centre of concerns among federal regulators and international organizations such as Deutsche Bank about rising levels of household debt in Canada.

The latest wave of Toronto condo completions and sales could mark a new upswing after a lull in the market. Sales hit a fourand-a-half year low last fall, while new condo completions had been falling for the past 18 months.

Much of the new supply is the echo of a building boom that began in early 2012, when developers started construction in more than 37,000 new condo units in the city, well above the long-term average of 25,000 units a year.

But the January condo boom also reflects the fact that banks and other lenders are returning to the market, now convinced the city's condo sector isn't poised for collapse.

Under pressure in the past from federal regulators, such as former Bank of Canada governor Mark Carney and former finance minister Jim Flaherty, lenders had largely retreated from Toronto's condo market, working only with well-known developers and often requiring a high number of presales before they would agree to finance construction.

But officials in Ottawa have grown quiet and banks are now eager to fill holes in their loan portfolios, several lenders told a commercial real estate conference last week.

"It's a very competitive market out there," Frank Margani, executive vice-president of strategy and development at Fortress Real Developments, told the RealCapital forum. "Portfolios are down and everybody is scrambling to get their piece of the action.' " Lenders are now willing to finance as much as 75 per cent of the value of a project, up from 70 per cent in recent years, said Chris Milne, vice-president of real estate banking at the Bank of Nova Scotia.

Some have also eased up on their presale requirements, typically asking that developers have buyers for at least 65 per cent of their units, confident that builders will eventually find buyers for unsold units.

"There's very little walk-away in the market," Mr. Milne said.

"We're very different from the U.S. People sign with their name."

With condo projects growing larger, more complex and more expensive, lenders have also been getting more creative about how they finance them, increasingly turning to syndicated loans involving multiple lenders, Mr. Margani said.

Still, many say the market doesn't appear to be headed toward the speculative boom of the past, when prices rose as much as 9 per cent a year, encouraging investors to flip their units for profit.

Prices are growing at half that pace today. Investors are now looking to hold onto their units and rent them out and they have established a price ceiling of about $600 a square foot to keep prices from outstripping rent.

"It's actually sort of the magic number for the investors to still be interested," Mr. Margani said.

January's boom in new condo completions is likely to prove temporary and the numbers of new units should start to fall later this year, predicted Royal Bank of Canada chief Robert Hogue.

Even as they are growing more aggressive about lending to the condo industry, banks are becoming more realistic about about where the condo market is headed. "Sales are not what they were in late 2007 when you could sell a high-rise condo in a week it seems," Mr. Milne said. "Now it takes awhile."

Associated Graphic

Toronto's condo market has rebounded, with builders putting the finishing touches on nearly 10,400 new units in January.

FRED LUM/THE GLOBE AND MAIL

CIBC hikes dividend amid search for U.S. acquisition
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By DAVID BERMAN
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Friday, February 27, 2015 – Print Edition, Page B1


Canadian Imperial Bank of Commerce says it continues to look for an acquisition in the United States, even as the bank diverted cash to shareholders with an unexpected increase to its quarterly dividend.

"While we have been actively assessing opportunities, we have not identified anything that meets our acquisition criteria," said Victor Dodig, CIBC's president and chief executive, in a conference call following the release of the bank's first-quarter results.

CIBC raised its quarterly dividend to $1.06 a share, up three cents, which took some observers by surprise given the bank's oftstated plan of expanding its U.S. operations with an acquisition costing as much as $2-billion.

The bank raised its dividend in the previous quarter, also by three cents a share.

Mr. Dodig said U.S. expansion is still the plan, but that the bank will be patient and disciplined about valuation, after passing on some opportunities.

CIBC reported better-thanexpected earnings in the first quarter, after accounting for extraordinary items that included the earlier sale of half of its Aeroplan credit-card portfolio.

A recent Wall Street Journal article, citing unnamed sources, alleged that Canadian regulators are standing in the way of a potential CIBC acquisition due to risk management concerns.

Laura Dottori-Attanasio, CIBC's chief risk officer, said she is "quite comfortable with the risks that we are taking."

Mr. Dodig added that the bank is under no restrictions when it comes to growth.

"The only restrictions we are under are our own self-imposed restrictions to be very disciplined," he said. "In any acquisition, we would have to get the approval from regulators, just as every other bank would."

He also said that the dividend boost is consistent with CIBC's goal of raising its payout ratio toward the high end of a range between 40 per cent and 50 per cent, should the economic environment continue to drive consistent earnings.

CIBC reported better-thanexpected earnings in the first quarter, after accounting for extraordinary items that included the earlier sale of half of its Aeroplan credit-card portfolio.

The bank said that its first quarter net income was $923-million, down from nearly $1.2-billion in the same period last year.

However, the Aeroplan sale last year boosted earnings by $123million in the first quarter of 2014, making year-over-year comparisons difficult.

After accounting for the transaction and other extraordinary items, CIBC said that its adjusted income in the first quarter was $956-million, up slightly from $951-million last year and well ahead of analysts' expectations for earnings of $907-million.

On a per-share basis, reported net earnings were $2.28. But using adjusted figures, earnings rose to a more substantial $2.36 a share, or 11 cents above expectations, driving a relatively upbeat assessment from analysts.

The shares rose 3.26 per cent, to $95.23, continuing a two-day rally for Canadian bank stocks that began after Royal Bank of Canada reported strong results on Wednesday.

"In the quarter, CIBC's core businesses delivered solid results despite a challenging macroeconomic environment," Mr. Dodig said in a statement, repeating a cautious outlook that a number of other bank executives have delivered this week in acknowledgment of a slowing Canadian economy and low oil prices.

The bank took an $85-million charge related to upgrading its technology and branch operations, which led to recent layoffs representing about 1 per cent of the bank's work force.

Trading revenue, which can be volatile, was part of the reason behind the better-than-expected results. As well, the bank took lower-than-expected provisions against bad loans.

However, CIBC also showed strength in more fundamental areas of its business: Retail and business income rose 13 per cent, after accounting for the Aeroplan sale; income from wealth management rose 12 per cent and wholesale banking income rose 4 per cent.

CIBC (CM) Close: $95.23, up $3.01

Ford to add hundreds of jobs in Oakville
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By GREG KEENAN
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Thursday, February 26, 2015 – Print Edition, Page B1


Ford Motor Co. will add 400 new jobs in Oakville, Ont., to assemble the redesigned Ford Edge crossover vehicle for global markets in another sign that healthy vehicle sales are boosting the auto sector in Canada.

The announcement will be made Thursday at the Ford Motor Co. of Canada Ltd. plant where official production of the new version of the Edge is scheduled to begin.

The hiring is in addition to the 1,000 jobs added last year and takes employment at the plant to 4,500 people. About half of the 1,000 jobs added last fall were insourced from suppliers.

"The all-new Ford Edge is a true global vehicle," said Joe Hinrichs, the auto maker's president of the Americas. Ford will make righthand drive and diesel versions of the mid-sized Edge and it will be shipped to Western Europe for the first time.

The announcement of new Ford jobs comes two weeks after General Motors Co. said its Cami Automotive factory in Ingersoll, Ont., will build the next generation of the Chevrolet Equinox compact crossover and on the heels of a Honda Motor Co. Ltd. announcement that it will spend $857-million at its plant in Alliston, Ont., to build the redesigned Honda Civic.

The Ontario and federal governments have spent about $140-million to support Ford's $700-million investment in Oakville. GM and suppliers will spend about $560-million to retool the Ingersoll plant.

Mandates given to Canadian plants to produce vehicles for global markets - such as the Edge and its Lincoln cousin, the MKX - are victories in the race for auto investment because they prolong the lives of factories for eight to 10 years. Industry officials have said that if Canada wants to continue to be a global player in auto assembly, it must retain existing assembly plants amid a flood of investment in new plants that is flowing into Mexico.

"This is an encouraging sign," said Don Walker, chief executive officer of Magna International Inc., and chairman of the Canadian Automotive Partnership Council, a joint industry-union board that advises the federal, Ontario and Quebec governments on automotive issues.

The announcements are good for Magna, Mr. Walker noted, because the company produces components for the Ford Edge and the Chevrolet Equinox.

"From a Canadian hat, we're creating employment, which is revenue for the government and it's good for the industry," he said in an interview Wednesday. The decisions likely are not related to the recent fall in the value of the Canadian dollar, he said, but the 80-cent (U.S.) level of the currency makes manufacturing in this country more competitive.

The upgrade to the Oakville plant - which includes the addition of 250 new robots and upgrading of another 1,000 - will allow Ford to shift production quickly and efficiently to meet consumer demand, the company said.

Global demand for crossovers and sport utility vehicles has risen 88 per cent since 2008. It's one of the hottest segments in North America, to the extent that crossovers replaced compact cars last month as the biggest segment in the Canadian market.

In Europe, where utilities have taken longer to break the stranglehold held on the market by passenger cars, Ford said the segment has more than doubled to 21 per cent of the market in six years.

Overall vehicle sales are expected to hit a record high in Canada again this year and top 17 million in the U.S. market, which is the biggest market for the Edge and where it has been the best-selling five-passenger crossover for seven of the last eight years.

Global vehicle sales are expected to approach 90 million this year.

Ford Motor Co. (F) Close:$16.51 (U.S.), up 15¢

Terrorists a threat to trains: Harrison
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CP Rail boss says an attack on tank cars carrying flammable cargo would be more dangerous than a derailment
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By ERIC ATKINS
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Tuesday, March 3, 2015 – Print Edition, Page B3


The chance of a terrorist attack on a train hauling flammable goods is a greater threat to public safety than a derailment, says Hunter Harrison, chief executive officer of Canadian Pacific Railway Ltd.

Rerouting trains hauling dangerous goods to avoid heavily populated areas, and keeping the list of hazardous cargo from the eyes of would-be criminals are keys to hauling flammable goods safely, Mr. Harrison said on Monday in Toronto speech.

"You've got a vessel that's sitting at its customer's door that's loaded with this stuff and somebody decides to tamper with it: That's my greatest fear," he said.

"It can be planned to do the worst possible damage."

The amount of crude moving by rail has soared amid rising production and a lack of pipeline capacity. With this increase in volumes has come new awareness and fears of the dangers associated with moving hazardous goods in tank cars that fail readily in a derailment.

After the 2013 explosion of an unmanned crude train in LacMégantic, Que., the federal government imposed lower speed limits on some trains and ordered older tank cars off the rails. New regulations include higher insurance requirements for railways, a per-tonne oil fee to create a pool to cover the costs of a cleanup, and more inspections to ensure the most flammable goods are handled safely.

However, several derailments and explosions of oil trains since Lac-Mégantic have put the spotlight on railways' safety records, and their abilities to keep up with growing demands by shippers and consumers for gasoline and other petroleum goods.

In a wide-ranging speech at a downtown hotel, Mr. Harrison said Calgary-based CP has reduced the number and severity of railway accidents, but it's impossible to eliminate all risks associated with freight trains operating at high speeds. "Can I tell you there's never going to be another one? No, I wish I could," he said.

Some cities, including Toronto, have called for Ottawa and the railways to end the movement of dangerous goods through their centres. The railways are also facing calls to make public the list of dangerous goods they haul.

Mr. Harrison said he would prefer to avoid congested, heavily populated areas such as Chicago, but the regions that would see higher traffic of dangerous goods would not be happy with the move. He noted railways are bound by so-called common carrier laws that forbid them to refuse to haul goods that are in compliance with with the law.

"We don't get to choose what we haul. Whatever is tendered to us, we by law have to haul," he said.

Mr. Harrison said rail remains a safer mode of transport than trucks and highways, and that making public the list of hazardous cargoes would make it easier for criminals to target trains.

"You want to give somebody the opportunity ... to look at that list and say here's what that car's got in it and here's the location and here's all the bad things I can do. I don't think we want that," he said.

Associated Graphic

Hunter Harrison, CEO of CP Rail, addresses a Canadian Club luncheon in Toronto Monday.

FRED LUM/THE GLOBE AND MAIL

The Sens are officially Melnyk's Mess
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The debt-laden team owner has most certainly helped Ottawa's slow slide into awfulness. The false promises of better days keep coming, the braggadocio is laid on thick. There is, of course, hope: young players, a high pick. But a staffing change could help
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By JEFFREY SIMPSON
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Saturday, February 21, 2015 – Print Edition, Page S4


OTTAWA -- jsimpson@globeandmail.com

While the "national" hockey media shoot fish in a barrel reporting obsessively on the collapse of the Toronto Maple Leafs, up the road in Ottawa, a franchise has been in slow decline.

The bombastic and debt-laden owner, Eugene Melnyk, and general manager, Bryan Murray, have presided over the Ottawa Senators' slide to out-of-the-playoffs mediocrity. The Senators stand 11th in the Eastern Conference, nine points from the wild-card playoff position, and 22nd overall, a far cry from where they used to be a decade ago. Next week, the Senators start a hard five-game road trip against Western Conference teams, all of which are better than Ottawa.

Melnyk, who has recently sold his stables and horses to raise money, used to brag about being willing to spend to the NHL salary cap in quest of a winning team.

Now, Melnyk boasts about having imposed one of the league's lowest salary caps on the Senators, claiming other owners are blowing money on bad deals. The result is obvious on the ice and in the organization. The Senators cannot compete against teams with much higher salaries. The co-relation is not exact (see the Leafs), but larger-spending teams do tend to finish higher up in the standing.

Melnyk remains defiant, insisting in December, "I'm not in the least embarrassed about us spending at the bottom. I'm happy about it because we'll be able to spend more in the future and some can't. Some are stuck."

Maybe, but there is no guarantee given the owner's debt load that the team will enjoy a bounce in the league's spending tables.

The owner's finances could worsen in the near future, when a new infusion of U.S. dollars (purchased at current Canadian dollar rates) will be needed. There is also the possibility some fans will not renew their season tickets or refuse to buy single-game tickets, given the consistently mediocre performance of the team. Some fans might justifiably resent the team's chutzpah at sending season-ticket renewal requests at the end of January for a season that begins next October with such a middling product on the ice.

Here, the Senators are very different from the Leafs, who sell out their building every night no matter how awful the team. What galls Leafs fans, among other indignities, is that the team has oodles of money, spends to the cap and is still dreadful. The Sens are marginally better on the ice, but they don't have the Leafs' kind of money to waste.

Perhaps this smaller-market reflex explains a little why Sens fans are remarkably uncomplaining. They don't make much noise compared to fans in other cities.

They seldom boo. They don't throw sweaters on the ice in disgust or wear garbage bags over their heads. They don't hold up homemade signs decrying mediocrity. The Ottawa media are tame by Toronto standards.

It's almost as though by expressing unhappiness at Melnyk's Mess, fans fear he might try to move the team, which of course he could not easily do under league bylaws. Were his creditors ever to force him to sell the club, it would be purchased by someone else.

That he would be forced to sell the club is a consummation for which a growing number of sophisticated and dedicated Sens fans devoutly wish. Long gone are the days when Melnyk was viewed as a hero for having "saved" the Senators. He bought low, and Forbes magazine estimates the value of the franchise is more than double what he paid for it.

A decade ago, the Senators were among the very best teams in hockey. They stayed that way for three or four years thereafter, and then the slide began. In fairness, the slide began almost imperceptibly under the previous general manager, John Muckler: two straight draft years without an NHL player, the Dany-Heatley-forMarian-Hossa trade, poor moves at the trading deadline. The slide has continued since.

Melnyk insists he has lost $94million to $110-million (numbers have varied) since buying the Senators. As Blue Jays president Paul Beeston, an accountant by training, once quipped: You can make a loss into a profit and vice versa quite quickly in sports accounting.

The Senators are privately owned, so no one knows how much of the revenue the club produces goes into debt payment.

What is known is that when Melnyk bought the franchise, which was bankrupt in 2005, he did so with plenty of debt. It is not known what Melnyk's two divorces did to his wealth.

According to senior officials with both the Bank of Nova Scotia and Canadian Tire, Melnyk got mad at Scotiabank for its attitude to some of his loans. He tore up the bank's naming agreement for the building where the Senators play, and tried to wipe away the rest of the bank's public presence.

It took the intervention of league commissioner Gary Bettman to get Melnyk to back off, since Scotiabank is the bank of the NHL in Canada and has exposure rights in every Canadian market. Melnyk then sold the naming rights for the building to Canadian Tire.

The Senators will miss the playoffs for the second consecutive year. Over the past eight years, the Senators have failed to qualify for the playoffs four times, lost in the first round three times and have won only one series - two seasons ago against Montreal. In the past three years, the Senators finished 16th, 14th and 21st overall. This year, the Senators will likely end up somewhere in the 22nd to 24th range.

Sens fans' only serious solace has been to watch their rivals collapse in Toronto. But if judging any franchise's performance by that of Toronto gives comfort, then sustained mediocrity will do.

Rather than comparisons with Toronto or Edmonton, Sens fans should check out how the Montreal Canadiens have soared under owner Geoff Molson and general manager Marc Bergevin.

Or the Winnipeg Jets, a team in a smaller market than Ottawa, that is going to qualify for the playoffs and has a stacked farm system.

Like the Leafs, the Senators changed coaches midseason this year. Dave Cameron, a Sens assistant coach reported to be a Melnyk favourite, replaced Paul MacLean, but the team's record did not improve. Selecting a coach is arguably a general manager's most important decision.

Bryan Murray has appointed five in eight years. None has been able to stop the slow slide. Four previous coaches have taken the fall, while upper management remained intact. The Senators are lumbered with bad contracts to underperforming players. There are not as many horrible contracts as in Toronto, but for a lowcap team, a bevy of bad contracts eats up desperately needed money.

As in, a three-year, $7.9-million contract for Colin Greening, who is now in Binghamton, never to return. As in, a two-year, $6-million contract for declining centreiceman David Legwand, signed as a free agent. As in, a $4-million-ayear, three-year deal for Milan Michalek (11 goals in 51 games). A slightly more lucrative and longer deal for Clarke MacArthur (one goal in 2015).

Then there are the two veterans - Chris Phillips and Chris Neil - whom the team is trying to peddle, although Neil fractured a thumb in a recent game and is likely untradeable. They both have a year left on their contracts.

Bobby Ryan, a joyous personality and a talented player, has signed an eyebrow-raising contract starting next year: an average $7.25million, not commensurate with someone with 14 goals this year and on target for maybe 20 or 22.

Despite brave talk about how the Senators are building for the future, its AHL team, the Binghamton Senators, is last in its division and stands 28th in a 30team league, with no evident talent ready to make a serious difference in the NHL. A recent review of 50 top prospects not in the NHL showed none in the Senators organization.

The slide - remember the Senators went to the Stanley Cup finals in 2007 and remained strong for several years thereafter - has featured bad trades, the worst being goalie Ben Bishop to Tampa for Cory Conacher.

Bishop was nominated for the Vézina Trophy and is back-stopping Tampa for a Stanley Cup run.

Conacher couldn't stick with the Senators, Buffalo and the Islanders and is now in the AHL. By contrast, the trade that brought Kyle Turris from Phoenix was a steal for Ottawa, although this season with Jason Spezza gone has revealed that Turris is a second-line centre, not a No. 1.

Spezza wanted out of Ottawa, knowing the team could not afford to sign him to another long-term deal. He went to Dallas for Alex Chiasson (nine goals and occasionally benched), Alex Guptill (four goals in 37 games in Binghamton), OHLer Nick Paul (who showed good promise on the Canadian junior team) and a second-round pick in this year's draft.

Even with Spezza gone, the false promises of better days ahead still kept coming from Melnyk, because every year Sens fans are treated to another blast of Melnyk's braggadocio.

In August of last year, for example, Melnyk declared that "If everybody just plays to their potential I think it's a great team and is going to be very competitive and will be a playoff team. ... Once the playoffs start anything can happen ... I think we are going to be very, very competitive." After each loss, the same clichés pour forth about "puck luck," "bad bounces," "tough breaks." Nobody ever says the team just isn't good enough.

Even when the Senators do win, there are occasionally questions.

For example, the Sens recently squeaked past Buffalo, the league's worst and lowest-scoring team, by a 2-1 score, but were outshot in the second period 21-4.

How could that happen?

There have been a few very bright spots. Goalie Craig Anderson, acquired in a good trade, has been excellent. (His backup, Robin Lehner, has not). Without Anderson, only Buffalo would stand between the Senators and last place in the East. Rookies Mark Stone and Mike Hoffman have been pleasant surprises.

Stone is a two-way player who has bagged 36 points and 14 goals.

Hoffman is quicksilver fast. He has scored 20 goals. Both look as if they're solid NHLers.

The Senators are among the league's youngest teams. Perhaps that explains the team's inconsistency, as in a 6-3 loss this week at home to a bad Carolina team; a 4-2 triumph over first-place Montreal. The franchise hopes that many of its young players are still adjusting to the demands of the NHL and, with time and more experience they will help the Senators improve. The Senators will have a high pick this year in a draft with many fine players.

The most important future questions all swirl around the owner and the front office. Melnyk insists he will not sell the team. If he gets a new arena adjacent to downtown Ottawa on LeBreton Flats, as he is proposing, that might be good for his bottom line and for the city.

The new arena would be many years away. If any public finances were requested - as is very likely - the idea would be furiously denounced in many quarters.

Public land for private gain would be a tough political sell. In the meantime, all signs point to continuing tight finances for the team. Also, episodic bouts of impetuous behaviour are likely, as when Melnyk made life so uncomfortable for the iconic Daniel Alfredsson that he left Ottawa to play one year for Detroit.

Recognizing the public relations catastrophe of Alfredsson's departure, Murray (to his credit) arranged for the most popular (and best) player in franchise history to return for his retirement, a night Sens fans cherished. Melnyk was present, of course, and said all the right things. Alfredsson will be given the keys to the city at a ceremony in early March.

The stars are all aligned for Alfredsson to return to Ottawa (where his family was very happy) in a front-office capacity where his brains and integrity - to say nothing of his local credibility - can only help. Just where he would fit in - and whether he could abide working under Melnyk - remains unknown, especially since GM Murray soldiers on making long-term decisions despite having Stage 4 cancer that has spread from his colon.

At some point in the not-toodistant future, the Senators' front office will look somewhat different.

Whether with the budget constraints as they are, new personnel could reverse the slow slide remains to be seen.

Associated Graphic

The Detroit Red Wings celebrate a goal against the Senators' Craig Anderson in December. Ottawa will miss the playoffs for a second consecutive year.

JANA CHYTILOVA/FREESTYLE PHOTO/GETTY IMAGES

Monday, February 23, 2015

Correction

A Saturday sports column incorrectly said Eugene Melnyk was divorced twice. He was divorced once.

NHL trade deadline primer: A guide to all seven Canadian teams
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By SEAN GORDON, JAMES MIRTLE, ERIC DUHATSCHEK, DAVID EBNER
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Monday, March 2, 2015 – Print Edition, Page S3


MONTREAL CANADIENS

State of the team Surprisingly sprightly. The East features a motley assortment of flawed contenders, the Habs chief among them. It's hard to imagine a club with David Desharnais as its top centre winning the Stanley Cup this year, but with Carey Price in net, the rules don't apply. They remain on the fringes of the elite but would get downright scary by adding a good right-sided defenceman and a scoring right winger.

So far GM Marc Bergevin pulled off a surprise predeadline trade last week, sending zippy third-line winger Jiri Sekac to Anaheim for the stouter Devante Smith-Pelly, who provides more heft along the boards and angrier defence.

Likely scenarios The Habs end up paying a belowmarket price for a defenceman and/or a character winger that no rumour linked them to.

Wild cards Perhaps they'll move a veteran contract with term left on it (Alexei Emelin, P.A. Parenteau, Tomas Plekanec) in exchange for a younger player. Bergevin is adamant about not parting with young assets, but packaging Lars Eller with one of his shinier prospects, such as Jarred Tinordi or Zach Fucale, and a pick might yield a temptingly high return. He is adept at pulling rabbits out of hats (see the case of Vanek, T.), so what if he did something crazy like acquire Phil Kessel? Or a young stud defenceman like Oliver Ekman-Larsson?

Some advice A pro scout from a rival team said this is what he would do as GM of the Habs: "nothing big." This is not a time for rash decisions or big bets, the Canadiens' Cup window isn't about to slam shut, and it doesn't make sense to overpay on deadline day. Of course, Bergevin already knows this.

TORONTO MAPLE LEAFS

State of the team It's bad. The Leafs tailspin at its worst involved winning four times in 28 games, one of the deepest slides - for any team - in recent history. The silver lining is they will now get a good draft pick: They're expected to finish between fourth and seventh last and have a decent shot (between six and 10 per cent) at winning the Connor McDavid lottery.

So far Toronto made one of the bigger moves around the league to date in shipping out rentals Cody Franson and Mike Santorelli to Nashville for a late first-round pick, prospect Brendan Leipsic and the rights to what's left of Olli Jokinen. They also dealt Dan Winnik to Pittsburgh for picks and found a taker for David Clarkson in Columbus. They also claimed defenceman Tim Erixon off waivers on Sunday. They've been busy.

Likely scenarios There are a lot of balls in the air. With president Brendan Shanahan selling the MLSE board on a lengthy rebuild, he'll need to move a lot of bodies, but there's no urgency until summer. The Leafs are guaranteed to try to dump their few remaining rentals - David Booth, Jokinen, Korbinian Holzer et al. - for late round picks.

Wild cards Most of the rest of the roster fits here. What happens with captain Dion Phaneuf? Or Phil Kessel? Can the Leafs get something of consequence for Tyler Bozak or Joffrey Lupul? Those are the biggest unknowns for the organization, as they'll all be 28 to 32 years old by next season and all have partial no-trade clauses. It's also possible a goaltender is in play. At least a dozen Leafs can be considered on the block if the right deal comes together.

Some advice "It's not like we're trying to move out our whole roster," Nonis said. "That's not the case. But if there are deals that will help move the team forward, then we'll look to do them."

OTTAWA SENATORS

State of the team Vaguely forlorn. They are wellstocked with enticing young prospects, but the Sens have regressed since the lockout-shortened 2013 season. A recent fivegame win streak has drawn them to within seven points of a playoff berth, but with 22 games to play, the postseason is a long shot. This is the point in the development cycle where savvy GMs start dumping veteran contracts.

So far Ottawa GM Bryan Murray has been quiet and will likely continue to be unless he gets a good offer for a character player such as defenceman Chris Phillips or injured winger Chris Neil. The Sens' most attractive trade piece, defenceman Marc Methot, signed a new long-term contract two weeks ago.

Likely scenarios Ottawa decides to move one of their defencemen (Phillips, Eric Gryba and Patrick Wiercioch are the names most frequently mentioned) and tries to drive up the market for veteran forwards David Legwand and Milan Michalek.

Wild cards Several teams are looking for goaltending, does Murray decide to move Craig Anderson? The stated preference has been to hold off deciding whether to go with Anderson or the injured Robin Lehner but perhaps another team forces his hand. Minorleaguer Andrew Hammond has been a minor revelation, and if Anderson goes, Ottawa could up their ante for sought-after college free-agent goalie Matt O'Connor. The more remote possibility is Murray decides to take a run at persuading a capped-out contender to part with a top-line centre prospect in exchange for shortterm help and absorbing some cap space.

Some advice Murray told TSN last week "I'm not going to trade for an unrestricted free agent" and added, "I think there's going to be a fair amount of activity ... but I don't know how busy we'll be in Ottawa." He should heed his own advice.

WINNIPEG JETS

State of the team The Jets, last-place finishers in the tough Central Division a year ago, have been a pleasant surprise, dramatically improving their overall defensive game season-over-season and playing the sort of hard-edged playoff style hockey that can produce unexpected post-season results - if they can hold on to one of the eight playoff spots the West.

So far GM Kevin Cheveldayoff has been the busiest GM in the runup to the trade deadline, engineering that massive seven-player deal with the Buffalo Sabres that landed him forward Drew Stafford, defenceman Tyler Myers, plus two prospects and a firstround draft choice. More recently, he added forward Jiri Tlusty as a rental from Carolina, where he crossed paths with coach Paul Maurice; and then acquired forward Lee Stempniak from the New York Rangers.

Likely scenarios The Jets are almost certainly done; any additional reinforcements will come when their lengthy injury list, which includes forward Mathieu Perreault and defenceman Ben Chiarot clears up. Blake Wheeler, who was on IR last week, returned Sunday.

Wild cards Since taking over as Jets' GM, Cheveldayoff has taken a clear, conservative path, and built the organization from within. There's little to suggest he'll veer from that strategy, for any reason. Short-term, high-risk fixes are not part of his managerial DNA.

Some advice The only two matters to sort out are: 1. Who starts in goal, if the Jets do qualify for the playoffs?; and 2. Where does the versatile Dustin Byfuglien end up playing, forward or defence? The likely answers: Rookie Michael Hutchinson, because the numbers don't lie; and defence, because that's where Byfuglien is happiest and a happy Buff is a productive Buff.

CALGARY FLAMES

State of the team Team captain Mark Giordano was placed on injured reserve Sunday as a result of an upper-body injury suffered last Wednesday, but even before he was hurt, the Flames were looking to shore up their blueline because of Ladislav Smid's absence.

So far The Flames traded pending unrestricted free agent Curtis Glencross to the Washington Capitals for second- and third-round 2015 draft choices. Additionally, they claimed defenceman David Schlemko off waivers from the Dallas Stars. Schlemko played most of his NHL career with the Arizona Coyotes, where current Flames GM Brad Treliving was assistant GM for seven years.

Likely scenarios With their key trading piece gone, the club is unlikely to sacrifice long-term goals for shortterm solutions.

Wild cards For years, the Flames have promised NHL teams that they will take a bad contract back in a trade, if a team is willing to give them an incentive to do so. Might a scenario involving the Philadelphia Flyers, who are trying to dump Vincent Lecavalier's contract, work? Flyers defenceman Luke Schenn, who played for years in Toronto under Flames president of hockey operations Brian Burke, might be available and perhaps could benefit from a fresh start.

Some advice Every year, Burke goes on a riff about how NHL GMs make more mistakes on trading-deadline day than at any other point in the season. If anything, the Flames will try to take advantage of an opponent's desperation.

VANCOUVER CANUCKS

State of the team Battered by injuries, but resilient. The Canucks are looking at finishing sixth to eighth in the West. After last season's implosion, this year's mantra was make the playoffs. But new management wants to create a contender over several years. The Canucks couldn't/ wouldn't offer enough for Evander Kane, and the scenario at the deadline is the same.

So far On a five-game road trip out east where the Canucks could have spun out of the playoff picture, the team managed three big wins, though they lost to Buffalo.

Likely scenarios They can't afford to be buyers at the expense of the long term. Vancouver has shopped Zack Kassian for a long while now and has recently showcased him with the Sedins - and he's popped in goals. He likely figures in a trade. Winger Chris Higgins or pending free agent Shawn Matthias could also be moved.

Wild cards A trade of the Sedins? Probably not. Defenceman Chris Tanev could figure in a surprise deal, if one emerged.

Some advice GM Jim Benning has said the team will not trade prospects. Last week, asked about the trade deadline, he highlighted returning players from injury as the equivalent of a deal: "We'll get some energy off of that and that'll give us a bump."

EDMONTON OILERS

State of the team Improving, barely, but still far closer to the bottom of the NHL barrel than they should be after eight consecutive years out of the playoffs. They've been marginally better since the coaching change - Todd Nelson in for Dallas Eakins - which has tightened the race at the bottom of the West standings for the coveted 15th-place finish that would enhance their odds of landing Connor McDavid.

So far GM Craig MacTavish landed a first-round draft choice from Pittsburgh in exchange for David Perron and then nicely upgraded the centre-ice position by acquiring Derek Roy for Mark Arcobello in the recommended lateral deal. Roy's presence in the lineup has helped the disappointing Nail Yakupov's overall production to improve.

Likely scenarios The Oilers have been dangling potential unrestricted free-agent defenceman Jeff Petry as trade bait, and he may be the most talented option out there after Andrej Sekera was traded last week to the Los Angeles Kings. Detroit and Anaheim are seen as two possible destinations for Petry, and the hope is they can pry loose either a first-round pick or a decent prospect in exchange.

Wild cards There has been speculation Edmonton might deal either Jordan Eberle, their leading scorer, or Andrew Ference, their team captain, but rationally, until the Oilers know what sort of player will shake loose at the top of this year's draft - a high-end forward or a defenceman - it makes no sense to pull off a blockbuster deal Monday.

Some advice The Oilers have targeted Kings backup Martin Jones as the latest in a long line of goaltending prospects they'd like to get their hands on, but more than likely, it will happen later rather than sooner. The realization has set in; the turnaround isn't going to happen until they can stabilize the goaltending position, and they're looking for a long-term solution.

Associated Graphic

The Leafs are dangling most of their roster, including unrestricted-free-agent-to-be David Booth, on the trading block.

RICHARD WOLOWICZ/GETTY IMAGES

Senators defenceman Eric Gryba

Canucks winger Zack Kassian, left, could be traded by Monday.

WINSLOW TOWNSON/USA TODAY SPORTS

Habs send Sekac to Anaheim for Smith-Pelly
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By SEAN GORDON
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Wednesday, February 25, 2015 – Print Edition, Page S3


MONTREAL -- This is not a trick that beginners should expect to pull off: First, evaluate one of your NHL team's most obvious needs, then fill it, and still manage to surprise everyone when it happens.

It was clear last summer the Montreal Canadiens had a hole at right wing. It was also evident in recent weeks that it hadn't been conclusively plugged, yet general manager Marc Bergevin's latest attempt to do so on Tuesday caught the hockey world unawares.

Give one of the league's premier deal-makers bonus marks for sticking the landing.

Definitive judgments will have to wait on whether erstwhile Anaheim Ducks forward Devante Smith-Pelly is a more effective solution than Jiri Sekac, who wasn't given much of a chance and didn't produce enough offence to earn more of one.

(Sekac was, he told reporters in St. Louis, "shocked" to be traded.)

Anyone can debate the relative merits of Sekac, signed from the Kontinental Hockey League last year, and Smith-Pelly, a former second-round draft choice. But it's disingenuous to argue the clubs haven't sought to address organizational gaps in swapping one for the other.

Bergevin said he's "been looking for a while" for a right-shooting forward to bolster the Habs' goal-scoring attack, which sits 23rd in the league at evenstrength.

"This is a young player with a lot of potential that hasn't yet been tapped," Bergevin told a clutch of reporters in St. Louis on Tuesday, where the Habs later beat the Blues 5-2. "A righty for us is important, and especially to have a guy who will go to the net and stay there. He can kill penalties as well."

Sekac and Smith-Pelly are 22 and have nearly identical point totals in their first season as NHL regulars. Both are slumping - in a strange bit of symmetry, both players have only two points in their past 20 games - and have broadly similar possession numbers, near-matching salaries, yet vastly different playing styles and body types.

In training camp it was hoped Sekac, a creative, swift player but a natural left winger, could slot seamlessly into the right side of the top three lines at the Bell Centre. For a time, he did (aided by the fact Rene Bourque was shipped to the Ducks via the minors).

Then the seams started showing - the Czech went 22 games without a goal and has lately found himself in the press box.

Smith-Pelly is one of the seemingly endless options the Ducks tinkered with on their top two lines, but the experiment never took.

Who knows? The Habs might benefit from having a bulky, feisty winger to help with their deficient play along the boards and provide a straighter vector to the net. The Ducks' top line could find a use for a lean, intelligent, finesse player with good defensive awareness.

If so, this might be taken at face value as a sensible hockey trade.

"We needed a little more skill.

Montreal, a very skilled hockey team, wanted a little bit more of a rugged up-and-down type of guy," said Anaheim GM Bob Murray. "It's just two teams making a change of young players. Both players were kind of stuck."

That the move features two teams that are playoff cinches and a pair of GMs whose relationship dates back to their playing days - Bergevin's first NHL defensive partner and road roommate was Murray - merely adds a few frills.

There will be those who - perhaps rightly - criticize Habs coach Michel Therrien for not giving Sekac more of a shot on a scoring line despite the injury absence of Pierre-Alexandre Parenteau (Sekac played only token minutes with top-line centre David Desharnais and relatively scant time with second-line pivot Tomas Plekanec).

But Smith-Pelly is also a player who has been bounced around - despite playing left wing and centre at points. "I've played right wing all my life," he said.

And the Ducks evidently thought enough of his talents to play him alongside top centres Ryan Getzlaf and Ryan Kesler for nearly 70 per cent of his minutes (much of that earlier in the year).

The Toronto native, who will wear Brian Gionta's old uniform number 21, is well-acquainted with several current Habs, including World Junior teammates Nathan Beaulieu, Brendan Gallagher and Michael Bournival, and fellow Torontonian Christian Thomas.

He's also good friends with defenceman P.K. Subban's younger brother Malcolm, so he knows the Habs' superstar.

Because this is Montreal, there will be keening and wailing and gnashing of teeth over what is essentially a straight-up swap of third-liners.

Smith-Pelly isn't a volume shooter like Gallagher, the team's highest-scoring right winger, but he does tend to fire his estimable wrister more than Sekac. He also has other attributes.

"I think my game can mesh well with the faster guys and creating space," he said.

The first order of business for Smith-Pelly, after picking up a winter coat, will be to join his new team in Columbus on Wednesday. His Bell Centre bow should come Saturday against the Toronto Maple Leafs.

"Those are the games you dream of," he said.

By then, perhaps Bergevin will have pulled off his next trick: shoring up his blueline.

The hockey intelligentsia will doubtless be surprised.

Associated Graphic

Forward Jiri Sekac was traded by the Montreal Canadiens to the Anaheim Ducks on Tuesday for Devante Smith-Pelly.

BRUCE BENNETT/GETTY IMAGES

'We've got to be more desperate'
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Ten teams are still in the running for the West's eight playoff spots. It's do or die for Calgary now
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By ERIC DUHATSCHEK
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Tuesday, February 24, 2015 – Print Edition, Page S3


CALGARY -- eduhatschek@globeandmail.com

Mark Giordano admits it: Growing up in the Toronto area, he didn't follow curling all that closely. Then he moved to Calgary, joined the Flames and, suddenly, curling crept onto his personal radar more every year. How could it not? The town is gaga for the sport.

But because the Tim Hortons Brier begins at the home of the Flames this coming weekend, Giordano and the Flames won't see any of the bonspiel. They have to leave town for two weeks, on a road trip that represents the make-or-break point of their season.

Essentially, 10 teams are in the running for eight playoff spots in the NHL's Western Conference, with just three points separating the six teams on the cusp. By Monday, as they flew to New York to prepare for a Tuesday date with the Rangers, the Flames had slipped to ninth place in the conference standings, the Minnesota

Wild having leapfrogged them for the second wild-card spot the night before.

"It seems like if you win, you don't move in the standings, and if you lose, you drop, so we've got to keep winning and we understand that," defenceman Kris Russell said.

In a season that so far has exceeded expectations, the Flames want to finish what they started and make the playoffs. To that end, coach Bob Hartley gave his team a spirited pep talk following the final practice before the trip, emphasizing the opportunity to end the franchise's fiveyear playoff drought.

"I told them this morning, the same thing I did a month and a half ago," Hartley said. "If [NHL commissioner] Gary Bettman, at Day 1 of camp, had stepped into our locker room and said, 'I have a deal for you. I'm taking you on a seven-game road trip; you're starting your season now, but I'm putting you in the eight-spot, jam-packed in a major club sandwich in the Western Conference, are you taking it?' We'd be in.

"This is fun. It's going to be a great measuring stick for our young hockey club. We're learning, but there's nothing wrong with trying to skip a grade."

The Flames may find solace in the fact that they faced a similarly challenging road trip right off the top this season. After losing their home-opener to the Vancouver Canucks, they played six straight on the road, including stops against a trio of Western Conference's powerhouses - St. Louis, Nashville and Chicago.

Projected as league bottomfeeders at the start of the season, there were fears the Flames could play themselves out of playoff contention with a mediocre performance on that trip. Instead, the surprising Flames won four of those six starts and have been in the hunt ever since.

"There are definitely similarities with the trip," Hartley said, "but as a group, we're better; we've made some huge strides. At the same time, we have to be honest, the pace of the league has picked up also. Right now, some teams will be fighting for better playoff spots in the standings and some teams might want to play spoilers. There's a danger in both.

"We want to win every game. I told the players this morning - team commitment, pride and hustle, I want to see hunger in everyone. If you don't, you might get a secondary role. We're going on this road trip on a mission."

Joining the Flames in New York Monday were rookie forwards Michael Ferland and Emile Poirier, who were called up from the team's AHL affiliate in Glen's Falls, N.Y., to replace Paul Byron (on injured reserve) and Matt Stajan, who stayed behind anticipating the imminent birth of his child. If Poirier gets into a game, it will be his NHL debut.

Giordano is one of the few remaining Flames from 2008-09, the last time the Brier pushed them out on the road for such an extended period. Two weeks is a long time to be away, he acknowledged, even for a Western Conference team used to the travel.

"The best way to do it is just look at the first two games, because they're back to back," Giordano said. "You've got to find a way to get points in those games, and go from there. We don't want to put too much pressure on ourselves - we want to have fun - but we've got to ramp it up a bit now. Every point is huge down the stretch. We've got to be more desperate, bottom line, than other teams."

As for his new-found interest in curling, Giordano says he plans to keep an eye on the Brier results toward the end of the round robin, but his scoreboard watching will be limited to NHL action. The playoff race is close, and the games are so meaningful.

"Besides," concluded Giordano, with a smile, "I don't know if ESPN covers curling. We'll see."

Follow me on Twitter:@eduhatschek

Associated Graphic

Mark Giordano, captain of the Calgary Flames, says of his team: 'We've got to ramp it up a bit now.'

CHRISTIAN PETERSEN/GETTY IMAGES

Henderson adjusts to life on the tour
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Regrets? This Canadian teen's had a few, but turning pro at the age of 17 is certainly not one of them
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By DAN RALPH
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The Canadian Press
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Friday, February 20, 2015 – Print Edition, Page S2


Brooke Henderson finished tied for 33rd in her first tournament as a pro and faces having to qualify for many of the LPGA Tour events she wants to play this season, but the Canadian teen couldn't be happier.

Just over two months after declining a golf scholarship at Florida to play full-time on the LPGA Tour, the 17-year-old native of Smiths Falls, Ont., is relishing her decision.

"Getting to wake up and do what you love every single day is pretty cool," Henderson said via telephone this week from Phoenix. "School would've been a great option for a lot of people, it just wasn't for me at this time.

"Being able to do what you love is such an amazing feeling, especially being able to spend it with my sister, who's also on the same journey as me."

Brittany Henderson, 23, not only serves as her younger sister's caddy but is also an aspiring pro golfer herself. On Friday, the elder Henderson will play in the $100,000 (U.S.) Gateway Classic in Mesa, Ariz., the opening event on the Symetra Tour, formerly the LPGA Futures circuit.

Brooke Henderson made her 2015 LPGA Tour debut earlier this month in the $1.3-million Pure Silk-Bahamas LPGA Classic at Paradise Island, Bahamas. Despite opening with a two-over 75, Henderson shot a five-under 287 total to finish tied with American veteran Morgan Pressel and earn $8,917.

Henderson won her first event as a pro on Jan. 30, outduelling her sister to capture the opening event of the Suncoast Series Tour in Winter Garden, Fla. Henderson earned $2,200 for the victory, while her sister collected $1,200 for finishing second.

While she's had a promising start, Henderson knows the life on the pro circuit won't be easy.

"This year is going to be a learning experience and I know that," she said. "There's going to be ups and down and I'm ready for that.

"Having no status on any tour and just playing and fighting my way into every event, it's going to be a long season but I'm excited.

I'd love to move up my world ranking even higher than it is now, around 200. Getting close to the top 100 by the end of the season would be a big goal for me and just becoming a better person and golfer every single day."

Henderson was the world's topranked amateur women's player last year and made the cut in all four LPGA events she entered.

Henderson captured the individual title at the world amateur championship before helping Canada finish second in the team event.

Henderson also finished tied for 10th - and was the top amateur - in the 2014 U.S. Women's Open and tied for 26th at the Kraft Nabisco Championship, also a major. In addition, she was the low amateur and low Canadian at the Canadian Pacific Women's Open in London, Ont.

Henderson said nerves were no more an issue at Paradise Island than they were in any of the four LPGA Tour events she played in last year. However, she did admit to putting more internal pressure on herself to play well in her first event as a full-time pro.

"Not really jitters but I was feeling it a little bit," she said. "Just that it was my very first event and I wanted to play really well."

While having her sister nearby has helped Henderson adjust to her new life, so has the reception she has received from other Tour members.

"It's been amazing," Henderson said. "They've all said, 'Hi,' and asked if I needed anything or had any questions and were extremely open to having a newbie on tour.

"The Canadians have really stepped up to and not necessarily just the veterans but also those who've been out there for a couple of years. They've really made me feel welcomed."

With the next three LPGA Tour events in Australia, Thailand and Singapore, Henderson has set her sights on the $1.5-million JTBC Founders Cup, slated for March 19-22 in Phoenix, as her next event. Also on Henderson's radar: playing well enough at Q-school this fall to secure her LPGA card for 2016.

Associated Graphic

Brooke Henderson was the low amateur and the low Canadian at the Canadian Pacific Women's Open in London, Ont.

DAVE SANDFORD/GETTY IMAGES

Culture change has Bautista feeling good
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Sense of complacency in the Blue Jays' clubhouse last season compelled management to overhaul roster
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By ROBERT MACLEOD
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Saturday, February 28, 2015 – Print Edition, Page S3


DUNEDIN, FLA. -- When Jose Bautista gazes around the clubhouse here at Florida Auto Exchange Stadium, there sits Russell Martin, the new starting catcher of the Toronto Blue Jays. In seven of the nine seasons that Martin has played in the majors, his teams have made it to the playoffs. And he has been an all-star on three occasions.

When the heavy-hitting Toronto right fielder looks to the other side of the clubhouse, he spies Josh Donaldson, the new starting third baseman. The past two years, Donaldson has finished in the top 10 in voting for the American League's Most Valuable Player Award; last year he was an all-star for the first time, and helped the Oakland A's reach the playoffs.

The baseball pedigree of both Martin and Donaldson is unquestionable, Bautista believes. They also have a reputation for not being afraid to speak their minds in a clubhouse when the going gets tough.

To Bautista's way of thinking, this will be a refreshing culture change to what he has witnessed the past couple of seasons with the Blue Jays, who have failed to make the playoffs since 1993.

"You walk around after a loss or a crucial game, or a bad beating that you took," Bautista said.

"Sometimes, you see people and you don't know what they're thinking. I'd rather at least know.

I can't say that I can read minds and I can't say that I thought that guys didn't care. But if I don't know, it makes me think."

Bautista was not naming names of players he felt might had become complacent after losses.

But you can tell by the large overhaul of player personnel that has gone on since the end of the 2014 season that management believed a new culture was critical to future success.

Bautista was speaking his mind following the first full-squad workout of the Blue Jays' spring training on Friday.

And there was some good news concerning Michael Saunders, pencilled in as the Blue Jays' starting left fielder, who injured his left knee on Wednesday.

Saunders had surgery on Friday to repair a torn meniscus after he stepped on a sprinkler head while shagging flies in one of the practice fields.

Originally, the Blue Jays were projecting that Saunders would be out until the All-Star Game in July. But Toronto general manager Alex Anthopoulos said on Friday that instead of trying to repair the damaged portion of the meniscus, Saunders opted to have it removed.

By doing so, Saunders will increase his chances of suffering arthritis in his joint, but his road to recovery will shorten considerably. Saunders could be ready to return to the Toronto lineup by mid-April, meaning he would be missing only the first two weeks of the regular season.

While Saunders is on the sidelines, the makeup of the Toronto outfield will be another problem on the plate of manager John Gibbons, along with who will be starting at second base.

Rookie Dalton Pompey appears to have the inside track to start in centre field, with Kevin Pillar a likely candidate to play in left.

The Blue Jays were in first place for 61 games last season in the AL East before they crumpled out of contention in August and finished third with an 83-79 record.

As usual, Bautista continued to roll while many others were faltering - finishing the season hitting .286 with 35 home runs and 103 runs batted in.

Bautista does not think the fact that Toronto led the AL East for a long stretch in 2014 will affect how the team performs this year.

"I don't think that matters," he said. "We could have come in second place, we could have lost in the World Series. If we're not world champions, that's the only thing that matters.

"Whatever happened last year and how many days we were in first and where we ended up and all that stuff, it's in the past. We just need to focus on this year.

We have a much better team in place, I feel like, and we need to just go after this year."

Associated Graphic

Toronto Blue Jays outfielder Jose Bautista takes a swing while catcher Russell Martin works behind him during the first full-squad practice at the Bobby Mattick Training Center in Dunedin, Fla., on Friday.

JONATHAN DYER/USA TODAY SPORTS

TSN makes the most of dull trade-deadline day
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By DAVID SHOALTS
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Tuesday, March 3, 2015 – Print Edition, Page S1


TSN was the clear winner over Sportsnet in the annual battle for best telecast on the NHL's trade-deadline day. But it was not simply a case of having the funniest and most insightful broadcasters.

TSN's presentation on a deadly dull day - the biggest trades were made in advance of Monday afternoon's deadline - was an artistic success. The network did make the biggest mistake of the day in allowing a moronic, vulgar tweet to flash across the screen, but its panellists were funny, frank and irreverent, with former Toronto Maple Leafs head coach Ron Wilson leading the way. More on him later.

Sportsnet, on the other hand, played it straight.

There were some light moments and some decent insights, such as former Pittsburgh Penguin Colby Armstrong talking about how he learned from his mother that he was traded off Sidney Crosby's line to the sad-sack Atlanta Thrashers in 2008, and how emotional it was to watch from the stands as his old team played in the Stanley Cup final. But for the most part, it was the standard stuff from panellists as they waited for the blockbuster deals that never came.

However, this was not all the fault of the Sportsnet broadcasters and producers.

Their hands were tied once their corporate masters handed over $5.2-billion for a 12-year contract to become the Canadian national broadcast "partner" of the NHL. Being a partner of the NHL means never offending the league, and never poking serious fun at its institutions.

TSN was not under any such constraints once the NHL cut the cord. That was evident early as host James Duthie made it clear irreverence would be the order of the day.

Hence the appearance of two llamas on the set, a send-up of the recent fuss on cable news and social media over two escaped llamas in Arizona.

(Duthie and the TSN panelists managed to keep straight faces as the llamas were paraded behind them.) There was also the in-house musician, Lester McLean, whose parody songs made up in lyrics what they lacked in musicality, especially the one about Evander Kane's track suit.

Duthie was a good sport in declaring the show "officially a parody" when Calgary Flames defenceman Dennis Wideman managed to fool the network and Twitter into thinking he was about to be traded.

Social media being the everpresent beast it now is, both networks ran a Twitter feed across the bottom of their screens. But Sportsnet, perhaps due to Big Brother NHL looking over its shoulder, elected to restrict the tweets to those from industry types. TSN made the mistake of opening its scroll to Twitter at large with minimal adult supervision, so the storm that followed the scurrilous tweet and the requisite apology was perhaps inevitable.

Many news columns are devoted each year to hashing out which teams won and lost on deadline day, but there was one clear individual winner on the broadcast front: Wilson. He was brought in for the deadline show by TSN and delivered gold right from the start when he joked it was the third anniversary of his firing by the Leafs, and he still hated them. Well, he might have been joking.

But it was his comments in the wake of the Buffalo Sabres trading their No. 1 goaltender Michal Neuvirth (to the New York Islanders for backup goalie Chad Johnson) that sent reverberations around the league. It was the second time this season the Sabres traded their starting goalie, making clear what everyone suspected for some time - that they are paddling like crazy under the surface to finish last, and give themselves the best chance to draft junior phenom Connor McDavid.

With TSN unconstrained by the need to keep the NHL happy, this started a discussion on tanking. Wilson said that on a team he once coached, he was asked by his GM to make sure his team tanked - but not to tell the players. He did not identify the GM, but dropped enough hints to indicate it was probably former Washington Capitals GM George McPhee in 1998. This is not burning your NHL bridges; this is dropping an atom bomb on them.

It made for compelling television even if you had to sit through hours of numbing trade speculation to get to such nuggets. We should all hope Wilson signs on full-time with TSN.

IOC official says Rio is making 'progress' on Games readiness
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By STEPHEN WADE
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The Associated Press
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Thursday, February 26, 2015 – Print Edition, Page S2


RIO DE JANEIRO -- The head of the IOC inspection team wrapping up a three-day tour of venues for the 2016 Olympic Games in Rio de Janeiro said Wednesday her team was encouraged by progress ahead of South America's first Olympics.

Just less than a year ago, a vicepresident of the International Olympic Committee had described Rio's preparations as the "worst" in memory.

"We were impressed by the progress being made on the venues," said Nawal El Moutawakel, head of the inspection team. But she cautioned that the crunch is coming with 21 test events set for this year and 44 in all before the Games open Aug. 5, 2016.

"Rio is entering the most intense period of preparations, a period where Rio must reach a new level of detail in its planning," she said.

El Moutawakel singled out the new Olympic golf course, a velodrome and an equestrian site as venues that face tight deadlines.

Despite delays, all venues are almost certain to be ready. However, other Games-related projects may not be.

This also happened with last year's World Cup. Stadiums were finished, but dozens of other projects were incomplete, and many still are - with funds running out.

Rio is spending about $14-billion (U.S.) on the Games, a mixture of private and public money.

Brazil spent $12-billion on the World Cup.

Just moments before El Moutawakel spoke, Rio de Janeiro's state environmental agency confirmed it was investigating a fish die-off that left thousands of carcasses floating in Guanabara Bay, the venue for Olympic sailing.

State environmental officials have repeatedly said they will not be able to reach a goal of treating 80 per cent of the sewage that flows in the bay by the Olympics.

Fifty per cent is the figure they have used. In addition to raw sewage, the bay is awash with floating rubbish, plastic bags and household goods such as bloated sofas and rusted televisions.

Part of Rio's commitment when winning the games in 2009 was to clean the bay, which looks and smells like a sewer in many spots.

El Moutawakel offered no specifics, but said she has been reassured by government officials that the problem was being tackled.

"We want every single venue to be ready for the athletes to compete in a secure and safe manner," she said. "We have been given reassurances that all the venues will meet the level ... so athletes can compete."

She also said Rio would be safe.

Five policemen were killed last weekend and last month at least five people were killed by stray bullets, caught in crossfire between warring gangs in the Rio area.

"Security is at the top of the agenda in this country, so that the Games can be hosted and organized in a safe and secure environment," El Moutawakel said.

"We really hope that at the Games nothing will happen - and even before and after."

Christophe Dubi, Olympic Games Executive Director, said a subway line extension was back on schedule. It had been delayed by tough drilling through a mountainside, but could be finished a few months before the Games open.

"The delivery, as far as we are concerned at this point in time, is not at risk," he said.

However, the pledge of getting 68 new hotels built for Rio might be.

El Moutawakel said a task force was to meet later Wednesday "so that every spectator, athlete and stakeholder can have a room in time for the Olympics."

Organizing committee head Carlos Nuzman said there "had been no discussion" of having two Olympic flames.

The opening ceremony will be at the Maracana stadium, where the flame is likely to be. However, track and field will be held at another stadium, used by Rio soccer team Botafogo.

McIlroy gets a windy reception in PGA return
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World No. 1 fails to break par for the first time in seven months, trails leader Herman by eight strokes as weather plays havoc with most players
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By DOUG FERGUSON
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The Associated Press
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Friday, February 27, 2015 – Print Edition, Page S3


PALM BEACH GARDENS, FLA. -- Playing in the United States for the first time this year, Rory McIlroy's first shot was a two-iron out of play.

A relentless wind with gusts that approached 55 kilometres an hour provided a rude welcome to just about everyone Thursday at the Honda Classic except for Jim Herman, who somehow made it around PGA National without a bogey for a five-under 65 and a one-shot lead.

McIlroy managed to salvage a tough day with by holing a 30foot birdie putt and two-putting for birdie on the 18th hole for a three-over 73. It was his highest score to par since he opened with a three-over 74 at The Barclays seven months ago. And he didn't seem too bothered.

The world's No. 1 player was competing for the first time since he won in Dubai a month ago.

And he wasn't alone. He played with Dustin Johnson, who birdied his last two holes for a 77, and Phoenix Open winner Brooks Koepka, who shot a 78.

"The conditions were obviously very tricky from the start," McIlroy said. "From the first hole, it was always going to be a day like that. I feel like I salvaged something out of the round the last couple holes, but it was just a day to keep trying, not to give up and know that anything around level, one-, two-over par still isn't out of it."

Only 19 players managed to break par. Only three holes - both par fives and the downwind ninth - played under par. Seventeen players had a front-nine score of 40 or higher.

Herman didn't mind the wind, though he moved to south Florida more than a decade ago and was surprised earlier in the week when there wasn't hardly any wind at all. Even with a 65, it still wasn't easy. He twice saved par from the fairway and rolled in a 35-foot birdie putt on the 16th hole.

"I don't mind it blowing," Herman said. "I feel like I can control the golf ball pretty well with my iron game. So yeah, it was okay that the wind was blowing."

Brendan Steele pitched in from about 35 yards to save bogey on the 14th hole, a key moment in his round of 66. Martin Flores, Kapalua winner Patrick Reed and Padraig Harrington were at 67.

U.S. Open champion Martin Kaymer was among those at 68.

Harrington would seem to feel at home in these conditions. On a day when the gusts were relentless, they still would be considered a wee breeze in Ireland.

Except that the Irishman has spent the last four weeks in gorgeous, calm weather on the West Coast.

"If I had come from Ireland, I probably would be thinking it was a nice day," Harrington said.

"But having played the last four weeks over here, even I was struggling and questioning and doubting myself out there. I found it very difficult."

Phil Mickelson opened with a 71 and was relatively pleased, though that was hard work. He hit into water hazards three times on the front nine.

"I really enjoyed the challenge of the day," Mickelson said. "It's fun to be back out competing, and I had a good day with the putter."

Associated Graphic

Rory McIlroy of Northern Ireland plays his fifth shot on the first hole of the Honda Classic in Florida Wednesday. McIlroy shot a three over 73.

DAVID CANNON/GETTY IMAGES

Pittsburgh aims to shape up: 'It's not bad but it's not good'
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By WILL GRAVES
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The Associated Press
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Saturday, February 21, 2015 – Print Edition, Page S5


PITTSBURGH -- It wasn't a bloodbath, exactly. To be honest, if Sidney Crosby allows, it wasn't even much of a fight.

Yet the Pittsburgh captain's decision to flip off his gloves and take on frequent tormentor Brandon Dubinsky on Thursday night seemed to symbolize the frustration of a team that's spent the better part of three months searching for traction.

Crosby landed at least one solid right to Dubinsky's face and earned a five-minute major and a standing ovation from the Consol Energy crowd for his efforts. Yet the spark he was hoping to provide fizzled quickly. An hour after Crosby's skirmish, the Penguins skated off 2-1 losers to Columbus, with Dubinsky providing the shorthanded game-winner on a goal that followed an all too familiar pattern. A sloppy giveaway by Blake Comeau led to wild scrambling followed by a dejected trudge to the bench.

Soaring in November, the Penguins are slumping toward March. Pittsburgh is an ordinary 16-12-7 since Dec. 1 and has dropped to fourth place in the supertight Metropolitan Division.

The power play is punchless. The offence is sputtering and the results are wildly inconsistent for a group that considers itself a Stanley Cup contender but currently looks like just another team.

"When you're struggling, you tend to force it a little bit," Crosby said. "It's normal."

While injuries and a well-publicized bout with the mumps forced the Penguins to scramble for healthy bodies in December, Pittsburgh has been near 100 per cent for several weeks and yet the goals that used to come so easily are nowhere to be found. The Penguins are tied for 13th in scoring and are just 10th in goal differential.

The Penguins haven't scored with the man advantage for going on a month, an 0-for-22 stretch that dates back to Jan. 30. Firstyear coach Mike Johnston keeps tinkering and imploring his players to put the puck on the net, and yet they continue to search for the perfect shot instead of simply a productive one.

Crosby's 58 points are respectable but hardly eye-popping. The two-time MVP has gone scoreless in 24 games, including nine in the past month. Evgeni Malkin's 54 points do not include a powerplay goal since the calendar flipped to January. The Penguins have added David Perron to provide some firepower and traded for Maxim Lapierre for a dash of toughness. Perron has cooled after a hot start and Lapierre is still trying to find his way. Making a splash at the trade deadline seems unlikely. The Penguins currently don't have the kind of depth that would get them what they need in return.

If not for the lights out play by goaltender Marc-André Fleury, the playoff berth that has seemed like a given for the past decade would be in jeopardy.

Starting the right way every time out would help. The Penguins looked every bit Detroit and Chicago's equal in two entertaining games with the league's best last week. They also looked listless early against Columbus and a full step behind Washington in a 3-1 loss on Tuesday.

"When you've lost a couple games and [don't] play right, everyone is nervous," Malkin said. "It's not bad but it's not good. We know we can come back. I believe this team is good guys, good players, if we just support each other and play better."

Mind the gap
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Europe's 1% keep getting richer, so why do central bankers want to inflate their portfolios even more with quantitative easing?
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By ERIC REGULY
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Friday, February 27, 2015 – Print Edition, Page P36


When the rich talk about the problem of income inequality, you know it really is a problem. At January's World Economic Forum meeting in Davos, Switzerland, the theme of inequality was prominent, even though the official motif of the annual gabfest for wealthy white entrepreneurs, bankers and industrialists (for that is who they are, mostly) was the banal "New Global Context."

Powerful men, and a few women, including Bank of England governor Mark Carney and International Monetary Fund managing director Christine Lagarde agreed that the gap between the rich and the poor is widening. They also warned that the trend could carry baleful economic and social consequences, even if no one knew how to narrow the divide--the rich do not warm to the notion of being taxed out of existence. But what was lost in Davos was the central irony of the event: It exactly coincided with the European Central Bank's (ECB) launch of €1.1-trillion worth of quantitative easing.

QE, as it's known, is supposed to be an economic lifesaver. It worked in the United States, Britain and Japan to some degree, though no two economists, finance ministers or central bankers would agree exactly why. Broadly speaking, putting more cash into the financial system is supposed to encourage businesses and individuals to borrow and spend more.

When QE works, it boosts asset prices, from equities to houses, which propels the so-called wealth effect. The trouble is that most of the assets that get inflated in value are owned by the rich, enriching them even more. No wonder the money-printing exercise is a hit among the 1%.

QE has become a global phenomenon, and the numbers are astounding. Since the start of the financial crisis in 2008, a hat trick of QE programs in the United States saw the U.S. Federal Reserve buy about $3.5-trillion (U.S.) worth of government bonds, mortgage-backed securities and debt of federally sponsored mortgage agencies. QE is voodoo economics, in the sense that it doesn't have the same immediate impact as, say, government spending on a road or hospital does. It works instead through indirect inducements.

When a central bank buys bonds in mass quantities, the sellers of those bonds receive cash, which is deposited in commercial banks. In theory--and sometimes in practice--the banks loan that fresh cash out to consumers and businesses. In Europe, lack of bank credit has hampered economic recovery, and the ECB has high hopes that its QE program will open the lending spigots and fuel inflation.

QE is also aimed at rejigging investors' portfolios. This is where the wealth effect comes in. When central banks buy massive quantities of bonds, they push the prices of them up and the yield (the effective interest rate) down. Those lower bond yields should encourage investors to switch into other asset classes, such as stocks, real estate, or even art and antique Ferraris. When household wealth rises, so does confidence.

Feeling flush, consumers spend more, which spurs growth.

Of course, some households benefit more than others. A 2012 Bank of England report said that its QE boosted asset prices and household wealth, but the impact was "heavily skewed," because the top 5% of households held 40% of the assets.

Apart from making the average guy fly into a rage of resentment, an extra dollar or euro earned by the rich gives the economy less of a lift than an extra dollar earned by the unrich. A multimillionaire or billionaire who sees his or her portfolio swell may just sit on the gains, and not buy another car, house or yacht. But a few extra bucks sprinkled onto the poor and the middle class can trigger immediate spending.

Recent European studies estimate that the bottom 50% of the population is up to three times more likely to spend any wealth gains than the top 10%.

The ECB's QE onslaught, which is supposed to begin in March and vacuum up €60-billion worth of bonds a month, is billed as a last-ditch cure for European economic stagnation and deflation. But other options weren't seriously considered. How about slapping more taxes on the wealthy and reducing them for everyone else? Or cutting tax subsidies for the rich? The Economist says that four times as much public money goes to the wealthiest 20% of Americans for mortgageinterest tax deductions than is spent on social housing for the poorest 20%.

Another idea, advocated by many economists, is to deposit, say, €500 in the bank account of every euro zone citizen.

The idea of millions of mini-helicopter drops of cash may sound outrageous, but it's really no different from U.S. income tax rebates handed out in 2001 and 2008.

QE may help restore growth in Europe, as it did in the United States and Britain, but it will come at a cost. Income inequality will get wider. When that happens, so do revolutions.

Eric Reguly is an award-winning columnist with The Globe and Mail. He is now based in Rome and can be reached at ereguly@globeandmail.com

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PHOTOGRAPH GREG FUNNELL

Saturday, February 28, 2015

WAY OFF TARGET
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By JOHN DALY
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Friday, February 27, 2015 – Print Edition, Page P16


Sometimes there's a gap between hope and reality. In the case of Target Corp.'s expansion into Canada in March, 2013, the gung-ho spin doctors at the top never really caught up with the grim reality on the ground. Herewith, some highlights of Target executives' conference calls with financial analysts.

Q1 2013 ended May 4, 2013 call date: May 22, 2013

We expect to open more Target stores in our first year in canada than we opened in our first 10 years in the united states.

--Gregg Steinhafel, chairman, president and CEO

Q2 2013 ended Aug. 3, 2013 call date: Aug. 21, 2013

We're very pleased with the look and feel of these new stores, and we have an outstanding canadian team. we're excited to have Metro as partner to run our pharmacies in the Quebecian province in the eastern part of canada.

--Gregg Steinhafel

Q3 2013 oct. 30, 2013--"community meeting" and call with analysts at a mall in Mississauga

When presented with the chance to acquire the zellers leasehold interests, we moved quickly, because these are great locations in dense, urban areas.

--Tony Fisher, president, Target Canada

Q4 2013 ended feb. 1, 2014 call date: feb. 26, 2014

In canada, we worked diligently to leverage holiday traffic in an effort to clear excess inventory.

--Gregg Steinhafel

Q1 2014 ended May 3, 2014 call date: May 21, 2014

The first-quarter canadian-segment results were also largely in line with our expectations. we've made changes to the Target canada leadership team so they could take a hard look at our current performance and apply fresh thinking about how to improve.

--John Mulligan, interim president and CEO

Q2 2014 ended Aug. 2, 2014 call date: Aug. 20, 2014

I just got back from canada where I spent time with the team to get an update on their review of strategy and operations.

--Brian Cornell, chairman and CEO

Q3 2014 ended nov. 1, 2014 call date: nov. 19, 2014

While our canadian segment continues to see robust yearover-year growth, third-quarter sales in canada fell short of our expectations. In canada, we are expecting much better fourth-quarter performance than we experienced last year.

--Brian Cornell

Q4 2014 shutdown of Target canada call date: jan. 15, 2015

The harsh reality is that both sales and profits continued to fall short of our expectations this holiday season. a --Brian Cornell

In the fourth quarter, with the decisions we're announcing today, we expect to recognize approximately $5.4 billion of pretax losses in discontinued operations, driven primarily by the writedown of the corporation's investment in Target canada.

--John Mulligan, CFO

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PHOTOGRAPHS (STEINHAFEL) CHRIS YOUNG/CP; (FISHER) MATTHEW SHERWOOD/THE GLOBE AND MAIL; (MULLIGAN) PABLO MARTINEZ MONSIVAIS/AP; (CORNELL) DARREN CALABRESE/THE GLOBE AND MAIL

The LNG marathon man
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Alfred Sorensen, president and CEO of Pieridae Energy
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By SHAWN MCCARTHY
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Saturday, February 28, 2015 – Print Edition, Page B3


OTTAWA -- Alfred Sorensen had his "aha moment" in 2007 when he had a chance encounter with Randy Eresman, then chief executive officer of Encana Corp., at an investors symposium in London.

During a break, Mr. Eresman asked his fellow Calgarian what business he was in. Mr. Sorensen told him that he was leading a project to bring liquefied natural gas into British Columbia at Kitimat.

The blunt reply from a man who was then heading one of Canada's largest oil and gas producers: "That's the stupidest idea I ever heard of."

Mr. Sorensen might have responded with defiance to Mr. Eresman's impolite assessment.

After all, some of the world's biggest energy companies were still planning to build LNG import terminals throughout North America.

Instead, he listened and reacted. He went back to Calgary and told his partners they had a problem, that the nascent shale gas business throughout the U.S. and Canada was likely to flood the North American market. In a desperate effort to save their investment, they reversed course. Kitimat LNG became the first of what is now nearly 20 West Coast projects proposing to liquefy Canadian natural gas and export it to Asia.

In 2010, with the project desperate for cash, Mr. Sorensen was forced to sell control of Kitimat LNG in a $300-million deal with Apache Corp. and EOG Resources. His personal take: $30-million.

Now, the man who pioneered the LNG dream in B.C. is leading a new venture, Pieridae Energy Ltd., which proposes to build an $8.5-billion LNG export facility on another Canadian coast, in Goldboro, N.S.

Skeptics question whether either LNG project will be built, given the huge capital requirements and competitive markets, as countries such as the United States and Australia race to cash in.

Still, Mr. Sorensen exudes confidence, even as he acknowledges the challenges of the global LNG business. Owlish and deliberate behind his thick glasses, he totes up the pluses of an East Coast LNG plant, then addresses the key risk: the lack of a nearby gas supply.

"The absolute surplus of gas in North America is so large that we have to find ways to get it off the continent," the chartered accountant says over a late breakfast at Wilfrid's restaurant in Ottawa's Château Laurier Hotel, a block from Parliament Hill.

"But the math is very challenging. You need incentives other than economics."

Mr. Sorensen was visiting Ottawa earlier this month as part of a broader effort to win support for the LNG business. Shortly afterward, the federal government announced a key tax break, allowing project proponents to write off capital costs at an accelerated pace.

The key for any successful LNG project, Mr. Sorensen insists, is to line up customers who are also partners and who are eager to ensure the diversity of their own energy supply mix.

Early in its planning, Pieridae reached a deal with giant German utility E.ON AG that will see the company take half of the proposed 10 million tonnes of liquefied gas the Goldboro plant would produce. With E.ON's backing, Mr. Sorensen then secured a promise of loan guarantees from the German government, which is eager to reduce its dependence on Russia for natural gas. He expects to announce another major European customer soon.

In the absence of an assured gas supply from Canada, he is negotiating with a major producer in the massive Marcellus field centred in Pennsylvania, and has an application slowly working its way through the U.S. Federal Energy Regulatory Commission to export the American gas through Canada.

Mr. Sorensen is a serial entrepreneur who is clearly passionate about human endeavour that rises above the ordinary or mundane. Whether chasing an improbable business deal, appreciating the exquisite physicality of ballet or listening to lectures from researchers at the University of Alberta, where he has status as a major donor, he revels in activities that push back boundaries.

Since breaking into the business as a trader with Direct Energy in the late eighties, Mr. Sorensen has started three energy companies and is a major shareholder and former chief executive officer of a fourth - a small gas producer, Canadian Spirit Resources Ltd.

"That trading mentality is what guides my decision making today: How do you take a situation and turn it into a monetizable event?" he says over a breakfast of eggs Benedict and tea. "We're experts at turning gas into cash. That's what we think about all the time - how to accomplish it."

Mr. Sorensen attributes his tolerance for risk to his immigrant parents. His carpenter father, Carl, came to Edmonton from Denmark a few years after the Second World War. To escape the prairie winter, Carl drove with a friend to Acapulco - famous then for attracting movie stars and the jet set - and met his Mexican bride-to-be, Dolores, on a beach. She was from a well-todo family but moved north to rear four children - Alfred is second oldest with three sisters - in middle-class Edmonton.

"I think their experience taught me to be independent," Mr. Sorensen says. "And to be a little skeptical at times as well - that what everybody is doing right now isn't necessarily the right thing."

Mr. Sorensen does not fit any stereotype of a Western oil executive. A bachelor at 53, he says he inherited his passion for ballet from his mother, who helped to start the Alberta Ballet Company. He likes to cook and garden, though he admits that he's not highly skilled at either.

He is also a distance runner and has completed three marathons and 10 half marathons.

His last full one, three years ago, was through the wineries of the Médoc region of France, with the second half of the race interrupted by tastings. Last summer, he participated in his first "Spartan Race," as one of a handful of fiftysomethings. It was only a five-kilometre course, but with 16 obstacles it was "way harder than a marathon ever was," he says.

He likens the mental toughness needed to complete a 42kilometre run to the attitude required to see an LNG project through to completion.

"Mentally, it's the same game," he says. "Anyone can run a marathon - it depends on how much mental strength you have.

... They're very similar in that you can take the bigger race and break it into smaller pieces and get to the next piece and then work on the next one and the next one."

Mr. Sorensen started his career on a conventional path. He graduated with a commerce degree from the University of Alberta, and went to work for one of the big accounting firms while he earned his chartered accountant status.

He joined Direct Energy as an accountant but quickly moved over to the trading floor at a time when natural gas markets were newly deregulated. Within two years, he and a colleague left Direct Energy to start a firm they called Continental Energy Marketing Ltd.

Continental became one of the premier companies trading natural gas futures, and was acquired by a predecessor of U.S. energy giant Duke Energy Co.

After the acquisition, Mr. Sorensen stayed on to lead the firm's effort to establish a European beachhead. And it was during that London stint that he was introduced to the LNG business.

He got a call from a trader who had a tanker full of liquefied natural gas waiting outside the Belgian port of Zeebrugge, who wanted to know whether Duke would buy it. "I had no idea what he was talking about," he recalls.

But he did the research and left Duke in 2002 with the conviction that LNG was going to be the next big thing in natural gas commodity trading. He never did do the trading but instead was approached about putting together a project to import LNG, and co-founded Galveston LNG Inc., which started the Kitimat LNG project now headed by Chevron Corp.

After essentially getting forced out of Kitimat by Apache, Mr. Sorensen took a break to enjoy his new fortune but found himself feeling empty and bored. His bottom came in 2011, when his tailor told him that he had the leisurely lifestyle of a "trophy wife."

"It was very depressing, soul sapping," he says. "I need to build and continue to learn and experience new things. It was not about the money - that was just a pile of cash that meant nothing to me. I liked the idea of the chase."

He joined Canadian Spirit Resources Inc. as CEO, but it was a rocky road. The small exploration and production company has some natural gas properties in the Montney region of northeastern B.C. Its biggest selling point is easy access to pipelines that will feed West Coast LNG projects, but development on the coast has moved far more slowly than anticipated.

For all the skepticism around Pieridae and the insufficient local gas supply to feed the liquefaction plant, Mr. Sorensen remains upbeat.

Pipeline companies are looking for approval to build capacity into New England, which would connect with a reversible Maritime line that ends at Goldboro, where Nova Scotia's rapidly declining offshore production comes ashore. Marcellus producers have vast quantities of natural gas and are desperate for new markets. And European customers are equally desperate for North American supply.

There are still plenty of obstacles to overcome as Mr. Sorensen checks off some short-term goals in pursuit of his long-term target. Having left the B.C. project before the end of the race, he is determined to see the finish line with Pieridae, rather than hand it over to foreign interests.

"We need national champions in this country," he says.

"I'm fiercely Canadian. We live in a very wonderful country that allows people who don't have much to build something very quickly."

OTHER PURSUITS

Ballet

Alfred Sorensen chairs the Alberta Ballet Foundation, which funds new works. He developed his appreciation for the art of dance as a teenager, when he was dragged to the ballet by his mother and three sisters. His favourites are Serenade and Jewels, two masterpieces by famed choreographer George Balanchine. "In both cases, an incredible amount of physical movement occurs in a short amount of time," he says. "To me, that is what is most amazing, how all those bodies can be co-ordinated and move at the same speed in absolute beauty."

Fitness

Though he admits to having "slacked off " at 53, Mr. Sorensen still sees a personal trainer four times a week and is considering a friend's request to run the New York marathon this year. He has run three marathons and 10 half marathons.

Education

After making a $5-million gift to his alma mater, the University of Alberta in Edmonton, Mr. Sorensen gained entry into a "new world of the university." He served on the search committee for the new president and is a member of the business advisory committee. He also attends the president's dinner, where leading researchers tell their stories. His favourite was the team working on artificial intelligence, which had taught a computer to play poker with an ability to respond to the other players.

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RACHEL IDZERDA FOR THE GLOBE AND MAIL

Uneasy rider takes spin in the spotlight
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Darren Throop, president and chief executive officer of eOne
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By SIMON HOUPT
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Saturday, February 21, 2015 – Print Edition, Page B3


Darren Throop would like you to know that he has a cool leather jacket, even if he's not wearing it today.

As the president and CEO of Entertainment One Ltd., Canada's largest independent film and television distributor, Mr. Throop is aware that he has to show some flair, maybe even a rebellious streak. The whole industry, after all, is built on stories. EOne has spent the past decade hoovering up assets from some of Canada's biggest media companies, including Alliance Films, so he stands on the shoulders of swashbuckling pioneers such as Robert Lantos and Victor Loewy. But Mr. Throop, who grew up on a family farm in the middle of Alberta and spent his mornings before school and his evenings after dinner milking cows with his three siblings, does not swash and he possesses no fancy buckle. At 50, he retains the air of a Boy Scout, rising every morning at 5:30 to hit the treadmill. And he wasn't crazy about meeting for this post-lunch snack at the Four Seasons Hotel the other day, a few blocks from eOne's midtown Toronto headquarters.

But it is awards season - the Oscars are this Sunday, and the Canadian Screen Awards next Sunday will see a number of eOne's films and TV shows strut their stuff - so he's here in a quiet corner table as the afternoon lull sets in at the luxe lounge known as d-bar, sipping some chamomile tea, nibbling on a cheese plate and musing on whether giving away a Darren Throop bobblehead might relieve him of the need to do this sort of PR.

"I've always tried to keep the focus on the company and the actions and the results of the company. I've always been convinced that will speak to the marketplace. But we're not very visible in Canada," he says. "That has been, to a degree, by design. We just haven't been pushing the story in the Canadian marketplace like some of our predecessors and our counterparts currently are. They're always doing whatever they can do to get their name in the press."

EOne is trying to get its name in the press a little more (and not just with this interview). It is making splashy moves, such as the planned relocation of its 500employee Toronto operations this summer to a downtown architectural showpiece, the QRC West building, just a stone's throw from the headquarters of the Toronto International Film Festival.

It's an odd business, this business of show, because credit for success - and, especially, the spotlight - goes to those who work most assiduously to claim it. But eOne is a sprawling beast, as much a holding company as a brand, which has been steadily acquiring companies over the past five years; 18 months ago it landed on the London Stock Exchange's FTSE 250. Its activities now include film production and theatrical distribution, television production and distribution, home entertainment (the DVD sales that once formed the company's backbone are flagging, but still money-spinners), family entertainment and brand licensing, and music.

And though you wouldn't know it, because eOne executives don't work the red carpet, it has become a bigger player in the feature film business by buying rights to independent films in territories such as Britain and the Benelux countries before they go into production.

"We have a big part in the financial orchestration of those films, and then, of course, their distribution, but we're not in the tentpole business," he says, referring to the blockbusters that cost upwards of $200-million (U.S.). "So that does mitigate the story. Our story's about brand and about content. So, while we're a very, very big media spender in Canada, that media spend is distributed across so many different properties that, really, as a core competency of the business, we're supposed to be bringing life to those brands, and this television show, and that children's property and that music artist."

It was music, in fact, that gave Mr. Throop his start, and gave eOne serious scale. In his late 20s, he and his wife Tish, a Newfoundlander who was homesick for the the East Coast, moved to Halifax.

He didn't yet know which route he would take.

"I knew I didn't want to be doing what I was doing - which was staying home," he says. "I wanted to be in business. I wanted to own something. I wanted to build something."

After trying his hand in a number of businesses (tanning salon, a restaurant, car sales), he opened the record store Urban Sound Exchange and built it into a chain.

He sold that in 1999 to the music and video retailer CD Plus and took the position there of vicepresident of operations. Later, he oversaw the acquisition of the indie music label Koch Records and christened the new company Entertainment One. It now has 1,700 employees. Last year, the company's revenues exceeded $800-million (Canadian).

With boots on the ground in dozens of countries, Mr. Throop believes eOne can double its business over the next five years, building on its position as an independent film distributor - it will release more than 200 features across multiple territories this year - and riding the wave of increased demand for television content. It reps the TV channel AMC (The Walking Dead) internationally. And while the streaming TV service Amazon Prime is known in the United States for its breakout show Transparent, the service doesn't have the same content in all countries across the globe, so it also needs to buy shows outside of its home market. So eOne sold AMC shows to Amazon Prime in Britain and Germany. "They're paying the same money as traditional television," he says.

Last month, eOne struck another in a growing string of deals, this time with the Hollywood producer Mark Gordon (Grey's Anatomy, Ray Donovan) that will give him access to eOne's financial resources and distribution network.

"Mark was under a studio deal for a long time, so when you have a studio deal, most of your creative is shown to the studio, and they have a very specific market.

Unfortunately, the creative - a lot of that gets left on the floor," Mr. Throop explains.

"This gives him an opportunity to bring so many different projects to the table, and we can finance, we can sell internationally. We're not tied to any one buyer or any one studio or broadcaster. We sell to 500 broadcasters around the world, in 160, 170 countries."

Over the past few years, audiences across the globe have begun to slip the surly bonds of linear television - the need to plant themselves in front of a TV to watch a show when it is broadcast for the first time - to curate their own TV diets with new ondemand services, whether through traditional TV providers or so-called "over-the-top" (OTT) offerings such as Netflix, Shomi, Hulu, Amazon Prime or CraveTV.

But while that development has been rapid in North America, Mr. Throop notes that many other countries are years behind in the cycle. With staff in those countries, eOne is well placed to take advantage of the shifts as they occur.

Meanwhile, global TV viewership continues to rise. By developing deep relationships with producers, and positioning itself as a middleman between them and viewers, eOne makes its cut, regardless of how the content is consumed.

"The audience continues to grow. The channels of distribution continue to grow," Mr. Throop says.

"From my point of view, it's still the start of the cycle. There are new channels of distribution popping up on a daily basis - with the same desire, everybody needs exactly the same thing: You could white label an OTT service right now for $1-million, but what do they need? They need content.

High-quality, exclusive content.

And that's really where we're driving our business: Partner with the best that we can on the creative side, and make sure we're front of the line as these new channels of distribution emerge. So we're not an infrastructure play, we're a pure-play content company."

CURRICULUM VITAE

Born: September, 1964. Grew up on the family farm (dairy cows, range cows, wheat, barley) 10 kilometres from Bashaw, Alta., northeast of Red Deer.

Family: Married to Tish, a social worker, for 23 years. They have two daugthers, 18 and 19.

Education: Graduated Grade 12 from Bashaw School.

CAREER

1991: Moved to Halifax where he sold cars, operated a tanning salon, ran a restaurant and then founded the record store chain Urban Sound Exchange.

1999: Sold out to music/ video retailer CD Plus and became its vice-president of operations.

2001: Relocated to Toronto.

2003: Became president and CEO of ROW Entertainment, a predecessor to eOne.

eOne holdings include: The Mark Gordon Company (Grey's Anatomy, Criminal Minds), children's franchise Peppa Pig, Paperny Entertainment (Cold Water Cowboys, Yukon Gold, Chopped Canada), Force Four Entertainment (Seed, Border Security: Canada's Front Line). Partnerships with ICF Films (Rookie Blue, Saving Hope), Allan Hawco's Take The Shot Productions, Amaze Film + Television (Call Me Fitz). First-look deal with producer David Lancaster (Whiplash, Nightcrawler).

On Canadian cultural regulations, and living next to the U.S.: "It's just not a fair comparison to say, 'You [in the U.S.] have 350 million people to program for, and you [in Canada] have 35 million people to program for, so you have one-tenth the budget, go do the same thing.' So, our culture needs to be protected."

Associated Graphic

RACHEL IDZERDA FOR THE GLOBE AND MAIL

Tuesday, February 24, 2015

Correction

A Saturday Report on Business feature on the CEO of eOne, Canada's largest independent film and television distributor, incorrectly said eOne's 2014 revenue exceeded $800-million CDN. In fact, that number is in British pounds and the correct number in Canadian dollars is $1.3-billion.

Poloz may be standing pat on rates, but will that last?
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By DAVID PARKINSON
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Monday, March 2, 2015 – Print Edition, Page B2


dparkinson@globeandmail.com

The Bank of Canada has suddenly become the Kinder Egg of central banks: full of surprises. In January, it stunned financial markets by cutting its key interest rate. At its next rate decision this week, the big surprise now looks to be that it won't make a second rate cut - yet.

Until Bank of Canada Governor Stephen Poloz gave a speech and press conference in London, Ont., last Tuesday, the markets were all but convinced that he would follow the January quarter-percentage-point cut with another quarter-point reduction Wednesday, one of eight rate-setting dates on the central bank's annual calendar. The bond market had priced in an 80-per-cent likelihood that another cut was in the hopper.

But once Mr. Poloz spoke - stressing that the January cut "buys us some time to see how the economy actually responds," saying that the cut was "the appropriate amount of insurance" against downside risks, and noting that the bank's assumption of a $60 (U.S.) a barrel oil price for its economic projections "has held up well so far" - those bets were off. As of Friday, the market was pricing only a 16-per-cent chance of a rate cut this week, although the market still sees it as more likely than not that the central bank will cut rates again later in the year.

Certainly, some important factors have changed since the central bank decided to cut rates in January. The biggest concern at that time - nosediving oil, one of the country's critical exports and a vital regional economic driver - has stabilized and turned modestly upward. Meanwhile, the Canadian dollar, already weakened due to its close ties with oil in foreign exchange markets, fell further after the January rate cut, providing what has been a timely stimulus to Canada's non-energy exports.

And Mr. Poloz's apparent standpat-for-now stance received a vote of confidence from a key economic report last Thursday, as Canada's inflation rate for January came in higher than economists had expected.

Inflation has fallen sharply amid oil's plunge, from 2.4 per cent in October to just 1 per cent in January, leaving it at the bottom of the Bank of Canada's 1- to 3-per-cent target band. However, the bank's measure of core inflation - which excludes the eight most volatile components of the consumer price index, such as gasoline, and is considered a better indicator of the economy's broader underlying inflationary pressures - has remained slightly above 2 per cent, the central bank's sweet spot, throughout the oil-infused swoon, and did so again in January.

This suggests that Canada's declining inflation rate is still largely an oil story, rather than a generalized disinflation of the overall economy. Indeed, the broader economy is seeing upward inflation pressures due to the weakening of the Canadian dollar, which appears to be pushing up import costs, cushioning the inflation downside from oil.

That paints a picture that the Bank of Canada can certainly live with, at least for now. The central bank has long shown an inclination to view fuel price swings as transitory factors in the overall inflation trend, and the data so far have shown little to change that.

"With oil prices seeming to have found a bottom, with the Canadian dollar close to 80 cents [U.S.], with core inflation stuck above 2 per cent and with most other domestic economic reports holding up well, it actually would be perfectly logical for the bank to stand aside and wait for now," said Douglas Porter, chief economist at Bank of Montreal, in a research note.

The central bank still has one more meaty slice of economic data to digest just a day before it makes its rate decision. Statistics Canada releases December and fourth-quarter gross domestic product figures on Tuesday, a critical gauge of the economy's overall health entering 2015.

Economists expect the economy grew by about 0.2 per cent in December, at an annualized rate of about 2.25 per cent for the fourth quarter as a whole - a view that has brightened in recent weeks amid a generally positive flow of Canadian economic data.

Still, that's a bit weaker than the Bank of Canada's most recent estimate of 2.5 per cent.

With the impact of the oil shock expected to slow the Canadian economy further over the first half of this year (the Bank of Canada projected annualized growth rates of just 1.5 per cent for both the first and second quarter), many observers think that even if a rate cut doesn't come this week, the central bank will cut again before midyear, possibly at the following rate decision in midApril. In an interview Friday, Mr. Porter noted that a lot of the worst news from the oil-related economic slowdown, such as deep cuts to jobs and capital spending, have come since the start of the year. "The first quarter really is the key," he said.

Associated Graphic

Bank of Canada Governor Stephen Poloz said last week the January rate cut bought Canada time to see how the economy responds. Statistics Canada will release fourth-quarter GDP figures on Tuesday.

BLAIR GABLE/REUTERS

JOHN SOPINSKI/THE GLOBE AND MAIL SOURCES: BLOOMBERG; STATISTICS CANADA

Retailers thrive as Target exits
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Loblaw, Canadian Tire profit boosted by steps taken to battle Target's expansion into Canada
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By MARINA STRAUSS
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Friday, February 27, 2015 – Print Edition, Page B1


Major retailers that fortified their businesses to help fend off the Target Canada invasion are now enjoying the fruits of their labour.

Loblaw Cos. Ltd. and Canadian Tire Corp. Ltd. posted strong fourth-quarter results Thursday, reflecting efforts to shore up their operations in recent years.

A week earlier, Wal-Mart Canada Corp. reported higher fourthquarter sales, reaping the rewards of initiatives such as rapidly expanding its grocery business.

When Target Corp. announced plans to expand to Canada four years ago, retailers here bulked up on acquisitions and other strategic investments to help fight off the big U.S. chain.

Now, as Target prepares to leave Canada, unable to see a path to profit before 2021, its rivals here are enjoying some record results.

"The grocery and pharmacy industries remain intensely competitive," Galen G. Weston, president and executive chairman of Loblaw, told an analyst conference call.

"But looking forward in 2015, as our outlook discusses, we expect adjusted net earnings growth."

Retailers such as Canadian Tire said Target ultimately didn't cut into their businesses much, and the discount retailer's current going-out-of-business sales aren't having a big effect either.

Target "didn't have a material impact before" on Canadian Tire, chief executive officer Michael Medline said Thursday, and "they are not going to have a material impact coming out."

Among its missteps in Canada, Target gave its rivals more than two years' advance notice that it was coming. Many of the big retailers rushed to invest in their operations to gear up for what was seen then as the entry of a savvy cheap-chic discounter ready to snare away business.

Loblaw, whose fourth-quarter profit more than doubled from a year earlier, bolstered its business by acquiring Shoppers Drug Mart Corp. last year, while Canadian Tire took over the country's largest sporting goods retailer, led by Sport Chek, in 2011. The purchases, along with other efforts, are paying off for the chains.

"They prepared well - and quite deliberately and publicly - for the big competitor coming in and they upped their games," said Jim Danahy, chief executive officer of consultancy CustomerLab and director of the Schulich School of Business's centre of excellence in retail leadership.

Loblaw and Canadian Tire were already in the process of updating their operations, but the Target threat gave more urgency to their initiatives, Mr. Danahy said.

On Thursday, Loblaw reported its fourth-quarter profit jumped to $247-million or 60 cents a share from $114-million or 41 cents a year earlier. Excluding one-time items, Loblaw earned 96 cents a share. Revenue rose 49.4 per cent to $11.41-billion. (Loblaw had an extra week in its latest quarter.)

Canadian Tire said its fourthquarter profit rose to $206.6-million or $2.44 a share from $191million or $2.32 while revenue grew to $3.6-billion from $3.3billion, also helped by an additional week in its quarter.

Canadian Tire has benefited from focusing on its core segments of auto parts and services, housewares and sporting goods, while investing in its digital and e-commerce operations. Loblaw refocused on food and its discount banners and upgraded its technology; now it's testing e-commerce and fresh food at Shoppers.

Despite their progress, the retailers face other headwinds, including higher purchasing costs as a result of a stronger U.S. dollar and an oil price slump that threatens to leave more people jobless and with less money to spend in markets such as Alberta.

Mr. Medline said lower oil prices have not yet had any significant effect on Canadian Tire's business but "you know you're going to see some."

The retailers pointed to the pressures of a stronger U.S. dollar, which makes their inventory more expensive when they buy goods overseas or south of the border in U.S. dollars. "A sustained decline in the dollar can be expected to have an increasing impact over 2015," said Dean McCann, chief financial officer at Canadian Tire.

Loblaw's Mr. Weston and Canadian Tire's Mr. Medline said they're interested in scooping up a limited number of Target's leases. "We have identified a number of stores that we think would be complementary, but don't think of it as anything significant or material," Mr. Weston said.

Associated Graphic

Loblaw executive chairman Galen G. Weston.

KEVIN VAN PAASSEN FOR THE GLOBE AND MAIL

SNC case shows downside of Ottawa's anti-corruption regime
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By BARRIE MCKENNA
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Friday, February 20, 2015 – Print Edition, Page B1


OTTAWA -- bmckenna@globeandmail.com

It is a powerful symbol of the long and symbiotic relationship between Ottawa and the country's largest engineering firm.

SNC-Lavalin Group Inc. occupies a prominent storefront office in the atrium of the Gatineau, Que., headquarters of Public Works and Government Services - the government's main purchasing arm.

Thousands of companies do business with the federal government. Only one occupies a patch of real estate inside the same building where bureaucrats dole out billions of dollars worth of government contracts every year.

But those lucrative ties are suddenly in peril after the RCMP laid corruption and fraud charges Thursday against SNC-Lavalin and two subsidiaries over alleged crimes committed in Libya between 2001 and 2011. The company insists the charges are "without merit."

Under strict federal anti-corruption guidelines, a conviction would automatically bar SNCLavalin from doing business with the government for 10 years.

A conviction would mean total exile, with no chance of appeal. Think of Napoleon Bonaparte on the island of Elba.

SNC-Lavalin argues that it isn't the company it was prior to 2011. In a statement Thursday, the company said it has put in place tough internal controls and has a "zero tolerance for ethics violations."

One of the unintended consequences of Public Works' recently toughened up "Integrity Framework" is that it does not recognize the rehabilitation of companies that run afoul of the law.

And it is sweeping, applying to affiliates convicted of a list of crimes, such as bribery, anywhere in the world.

The regime may be a powerful deterrent, but a poor way of encouraging companies to reform. There is no parole for good conduct. Anti-corruption experts say Ottawa has created a set of rules that is among the most far-reaching and inflexible anywhere in the world.

"The U.S., EU and World Bank all have a debarment process," pointed out Peter Dent, president of the Canadian chapter of Transparency International, an organization committed to fighting corruption. "There is predictability, transparency and due process associated with all of them."

The Canadian rules are "out of step" with regimes in most other countries, Transparency International said in a letter sent this week to Public Work Minister Diane Finley, who is considering possible changes to its regime.

For SNC-Lavalin, debarment would be disastrous. Last year, SNC-Lavalin chief executive Robert Card compared the strict federal rules to a "meat cleaver" that could destroy the company if it's convicted.

"The company derives a significant percentage of its annual global revenue, and an even larger percentage of its annual Canadian revenue, from government and government-related contracts," the company said in its 2013 financial disclosure report. "Suspension, prohibition or debarment ... would have a material effect on the company's business, financial condition and liquidity."

The company generates hundreds of millions of dollars in revenue from the federal government every year.

One of the biggest upcoming prizes is the $5-billion rebuilding of Montreal's Champlain Bridge.

Last year, Ottawa designated a consortium headed by SNC-Lavalin as one of three groups eligible to bid on the project.

The risk of losing SNC-Lavalin from its roster of suppliers is one thing. But the downside of a broad and unforgiving anti-corruption regime is that the list of ineligible suppliers can grow uncomfortably long.

Federal officials might well have believed they were doing the lowrisk thing last November when they chose Brookfield Johnson Controls Canada LP over SNCLavalin to manage 3,800 federal buildings across the country, business worth as much as $22.8billion over 14 years.

Here's the problem: Torontobased parent company Brookfield Asset Management Inc. is the target of ongoing corruption investigations by the U.S. Securities and Exchange Commission and the U.S. Justice Department over allegations that an executive bribed officials in Sao Paulo, Brazil, to secure permits for renovating three shopping malls. Brookfield, which has not been charged, vigorously denies the allegations, which it says come from a disgruntled former employee.

A criminal conviction in the Brazil case would put Ottawa in an awkward spot when those lucrative contracts come up for renewal - unless, of course, the government adopts a more forgiving anti-corruption regime in the meantime.

That is exactly what it should do.

RBC earnings lift banking sector
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Profit jumps 17 per cent, sending shares higher as bank points to higher consumer spending from lower oil prices
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By DAVID BERMAN
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Thursday, February 26, 2015 – Print Edition, Page B1


A day after Bank of Montreal alarmed observers with disappointing quarterly earnings that appeared to underscore a weak domestic economy, Royal Bank of Canada soothed nerves with upbeat results that topped expectations.

RBC reported net income of nearly $2.5-billion, up 17 per cent year-over-year, despite concerns about cheap oil prices, lower interest rates and a weaker dollar.

The bank boosted its quarterly dividend by 2 cents a share, or 3 per cent, to 77 cents a share.

"I would highlight the potential for some positive effects from lower oil and gas prices," said Dave McKay, RBC's president and chief executive, in a conference call. "For example, lower energy prices are expected to lead to increased consumer spending, which will help support [economic] growth. Additionally, a weaker Canadian dollar and an improving U.S. economy benefit our manufacturing sector," he said The shares surged $2.75, or 3.7 per cent, to $77.80, lifting other bank stocks as investors took a more positive view of the broader banking sector following a widespread retreat in share prices on Tuesday.

Nonetheless, the whipsaw action of the past two days raises the question of why two of Canada's Big Six banks seem to be moving in opposite directions.

RBC's earnings rose to $1.65 a share, up 27 cents or 20 per cent from last year, beating analysts' estimates of $1.55 a share.

In contrast, BMO's per-share earnings fell 8 per cent, missing expectations.

RBC benefited from surprisingly strong trading revenues, which drove income from its capital markets division up nearly 18 per cent. BMO's capital markets income fell 20 per cent, weighed down by weaker corporate and investment banking revenue.

More important, RBC's earnings from its massive personal and commercial banking division rose 7.9 per cent over last year.

That's about double the pace of BMO's growth, which was hobbled by rising expenses related to U.S. dollar strength and a rising number of employees, according to analysts.

In late January, RBC struck a deal with City National Corp., paying $5.4-billion (U.S.) for the Los Angeles-based bank and marking a return to U.S. retail banking after RBC unloaded its U.S. division in 2011.

The deal underscored RBC's attempt to look for growth beyond Canada's well-served retail market.

But in a conference call, Mr. McKay highlighted the strength of Canadian banking, where net income rose 7 per cent over last year.

"We have the No. 1 or No. 2 market position in all retail and business product categories, and we continue to gain market share across all of our core businesses while maintaining strong margins," he said.

Despite the successful quarter and an upbeat economic outlook, RBC executives remain cautious about the year ahead in a nod to concerns about the potential for even lower oil prices, lower interest rates and a bubbly real estate market.

Bank executives said they have conducted stress tests to gauge the impact of a particularly dire future, where oil trades for $45 a barrel over the longer term, unemployment rises as much as three percentage points and real estate prices collapse as much as 25 per cent.

Even with these gloomy conditions, though, RBC's chief risk officer Mark Hughes said that the bank would remain profitable.

"We always talk about the negatives first," said Janice Fukakusa, RBC's chief financial officer, adding that this approach allows the bank to capitalize on opportunities if reality turns out better than expected.

Even though low oil prices, low rates and a weak dollar are still seen as headwinds, they can deliver surprising results to parts of the country.

"When we're looking at our portfolio in Ontario, we see signs of people investing in their companies and feeling more confident about exporting," Ms. Fukakusa said.

"So we're cautiously optimistic and looking for opportunities."

RBC (RY) Close: $77.80, up $2.75

Associated Graphic

RBC's earnings from its personal and commercial banking division rose 7.9 per cent over last year.

MARK BLINCH/REUTERS

Crude drop to choke oil sands cash flow
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As much as $23-billion could be lost over two years if oil doesn't rebound sharply, frustrating plans for expansions and new projects in Alberta
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By JEFF LEWIS
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Wednesday, February 25, 2015 – Print Edition, Page B1


CALGARY -- The slump in Alberta's energy sector is set to wipe out billions more in corporate earnings, complicating growth plans and putting investor dividends at greater risk.

An analysis of more than 30 major oil sands projects by consultancy Wood Mackenzie Group says as much as $23-billion (U.S.) of cash flow will disappear over the next two years - even if U.S. crude oil prices rise to $55 a barrel this year and $65 in 2016 from today's lows.

Even as the energy sector reels from the sharp drop in oil prices, the Edinburgh-based consultancy said a series of expansions and new projects where investments were made long before oil prices hit the skids will add as much as 458,000 barrels per day of oil sands production over the next two years.

But much of the new output will generate skimpy returns compared to historic levels, highlighting the central predicament faced by Alberta's high-cost industry as it struggles to adjust to lower crude prices amid a market glut.

"The margins are going to be squeezed, but because of the long-life nature of the assets, producers are generally going to be forced to operate at a reduced margin or even at a loss in the short term," said Michael Hebert, a Calgary-based analyst and author of the analysis.

"The production is coming online regardless of what the short-term price is doing."

West Texas intermediate oil for April delivery on Tuesday fell 17 cents to $49.28 a barrel, as U.S. stockpiles rose. In June, the U.S. benchmark fetched more than $100.

For years, triple-digit oil prices fuelled expectations of endless supply growth in northern Alberta, even with multibillion-dollar pipeline proposals such as TransCanada Corp.'s Keystone XL stuck in limbo.

However, the price plunge has prompted major budget revisions and layoffs at scores of energy companies, stoking broader concerns about weakness in the Alberta economy.

The oil-rich province on Tuesday said it expected to finish the current fiscal year with a $465million (Canadian) surplus, down sharply from previous estimates.

The province expects a deficit of more than $7-billion in the next fiscal year.

Alberta's deteriorating finances reflect, in part, shaky growth prospects in the oil sands, where high costs and weak prices are squeezing returns. Companies across the energy sector are deferring spending, cancelling new projects and ratcheting up pressure on suppliers to cut rates in a bid to lower overall costs and offset dwindling profits. A number of companies have also slashed their quarterly dividend, but others have stood pat.

Seven Generations Energy Ltd., which is exploring for oil near Grande Prairie, Alta., on Tuesday said it expected to save $50-million by negotiating deals with its suppliers. The Calgary-based company chopped its 2015 budget by as much as 20 per cent to between $1.3-billion and $1.35-billion.

Others have turned to the market to shore up finances. Cenvous Energy Inc. this month sought to raise $1.5-billion by selling shares after cutting as many as 800 jobs to bolster its balance sheet.

Still, growth plans are falling by the wayside. This week, Royal Dutch Shell PLC shelved plans for a 200,000 barrel-a-day mining venture north of Fort McMurray, Alta. , saying the project is no longer a priority as it seeks to wring better performance from its existing assets. The global oil giant last month cut some 300 jobs from a separate Alberta oil sands project.

The moves mirrored decisions by Suncor Energy Inc., Cenovus and others pinched by dramatically lower crude prices.

Wood Mackenzie forecasts daily oil sands production will hit four million barrels in 2024, four years later than previously anticipated.

Associated Graphic

Oil sands production is expected to increase over the next two years, further squeezing profit margins.

REUTERS

Ottawa announces railway disaster-relief fund
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By ERIC ATKINS
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Saturday, February 21, 2015 – Print Edition, Page B1


Companies that ship oil by rail will be required to pay into a compensation fund set up to cover the costs of a derailment, the federal government announced on Friday.

The legislation, which is a response to the 2013 tragedy in Lac Mégantic, will ensure victims of oil train crashes are compensated for losses and that municipalities can recover the costs of cleaning up spills and fighting fires while giving the government new powers to enforce safety regulations, Minister of Transport Lisa Raitt told reporters.

"This new legislation will improve railway safety and strengthen oversight while protecting taxpayers and making industry more accountable to communities," Ms. Raitt said.

Here are the highlights of the legislation, called the Safe and Accountable Rail Act:

Companies that ship oil by rail must pay a $1.65-a-tonne fee that is pooled in a fund intended to cover the costs of damages that exceed railways' insurance.

Railways, for the first time, must carry a minimum amount of liability insurance based on their volume of dangerous goods. The amounts range from $25-million up to $1-billion.

Railways will be required to implement policies and procedures that will ensure workers can report fatigue without fear of reprisals.

"Everything that we have announced today has been in reaction to Lac Mégantic," Ms. Raitt told reporters.

Pauline Quinlan, chair of the Federation of Canadian Municipalities' rail-safety committee, called the compensation fund a key way to protect taxpayers from bearing the costs of a company's mistake, but also wants shippers of other dangerous commodities to pay fees.

Ms. Quinlan is mayor of Bromont, Que., a town on the same railroad as Lac Mégantic. The trains are running again through her town, and she said the new operators, Central Maine & Québec Railway, have agreed to share information about which dangerous goods it is moving. "There has not been a large volume of dangerous goods [lately] but as their operation is going to pick up, it is very important that we are kept secure so that our municipality does not have to pay the cost of any incidents."

The amount of oil moving by rail has soared in the past two years as new oil production, especially in the Bakken region of North Dakota and the Canadian Prairies, faced a lack of pipeline capacity. In 2014, railways in North America pulled more than 1.2 million tank cars of oil, a 12per-cent rise from 2013, a year that saw a 31-per-cent rise from 2012, the American Association of Railroads said.

Ms. Raitt said the government did not anticipate the rise in volumes, and noted many of the recent costly derailments have involved large trains that carry great risks if a crash occurs.

There have been several recent fiery derailments of oil trains, including a Canadian National Railway Co. wreck on Sunday in Northern Ontario.

But dangers of moving oil by train were highlighted in the Lac Mégantic disaster, when an unmanned Montreal, Maine and Atlantic railway train carrying volatile Bakken oil derailed and set much of the town ablaze, killing 47 people. The MM&A said in bankruptcy filings it carried just $25-million in insurance, far short of the estimated $400-million cleanup costs.

The Railway Association of Canada said shippers of other dangerous goods, such as chlorine, should be required to pay into the compensation as well, something Ms. Raitt said could happen at a later date.

Spokesmen for CP Railway and CN Railway declined to comment.

Why decades of inflationary pressure may be ahead of us
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By IAN MCGUGAN
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Tuesday, March 3, 2015 – Print Edition, Page B2


What causes inflation? Old people and kids, according to a provocative new paper that suggests an outburst of higher inflation may be lying in wait for us.

Mikael Juselius and Elod Takats of the Bank for International Settlements point out that their findings turn conventional wisdom on its head.

Bank of Japan Governor Masaaki Shirakawa, for instance, has argued that an aging population lowers inflation by reducing expectations for economic growth. Other commentators have suggested that elderly voters are more likely to support policies that protect the purchasing power of their savings.

But that's not what the bank researchers found when they looked at the evidence from 22 advanced economies, including Canada, between 1955 and 2010.

They discovered that periods in which countries had high proportions of dependents - whether they were young people or oldsters - tended to be accompanied by higher inflation than periods in which the population was more concentrated in its prime working years.

"According to our estimates, demography accounts for around one-third of the variation in inflation and for the bulk of the deceleration between the late 1970s and early 1990s," they write.

They say their results "suggest a robust correlation between demography and inflation" although exactly why is unclear.

It's possible that a high proportion of dependents means many people consume more than they produce, thereby raising inflationary pressures.

But while the co-authors urge caution in applying their results, their data suggest the developed world may be nearing a turning point.

According to their numbers, advanced economies have benefited from demographics that encourage relatively low inflation over the past four decades. But that situation is now on the verge of flipping and "the demographic pressure on inflation would be expected to reverse almost fully over the coming decades, from benign to more challenging."

Their estimates, taken at face value, suggest that a widespread increase in the share of the working age population has lowered inflationary pressure by about four percentage points on average over the past 40 years. Over the next 40 years, the growing numbers of elderly citizens will have the opposite effect, raising inflationary pressure by about four percentage points.

It's important to note that the researchers are referring here to inflationary pressure, not inflation itself. Central banks could choose to put a lid on the pressure by raising interest rates, they say.

One way or the other, though, the changing demographic picture is likely to endanger today's low, low interest rates if the linkage that the researchers has discovered holds true.

They don't spell out the consequences of higher rates, but it's safe to assume that the initial effects would be painful for today's investors. Higher rates would push down bond prices and probably real estate values and stock prices as well.

Of course, as the researchers note, long-run economic projections have a horrible track record. So you may not want to base your portfolio strategy on higher interest rates. Just be aware that, contrary to conventional wisdom, an aging population may actually encourage inflation.

An old Flame rekindles hope in Calgary
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Veteran Hudler won't call himself a mentor, but he's been a big help to youngsters on a team making an unexpected playoff push
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By ERIC DUHATSCHEK
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Saturday, February 21, 2015 – Print Edition, Page S5


CALGARY -- eduhatschek@globeandmail.com

The mystery man slips out the back of a now mostly deserted Calgary Flames dressing room, wearing a T-shirt with Marlon Brando's likeness on it. The optional practice is long over; the room clear of the usual cast of interrogators.

Though Jiri Hudler is the leading scorer on a Flames team making an unexpected playoff push, little is known about the diminutive Czech native, a fleeting presence here most days, someone who prefers to be seen, not heard.

This is more a function of personality than a language issue for Hudler, whose English is lightly accented but quite good.

Now 31, Hudler has been in North America since the start of the 2003-04 season, when he came over to play for the Detroit Red Wings, who'd made him the 58th overall choice in the 2002 NHL entry draft. Hudler was in his second full season when the Red Wings won the 2008 Stanley Cup and he has 66 playoff games on his NHL résumé. On a young, inexperienced Flames team, that makes him No. 1. Only Mason Raymond (55), Dennis Wideman (44) and Brandon Bollig (24) come even close.

The natural starting point today is Hudler's choice of outerwear, the Brando T. Does it signal an interest in the movies, in Brando, or did he just randomly pull it out of a pile of shirts this morning?

"I'm a big movie guy; I love movies, but this? This is coincidence. He was cool. I'm trying to be cool - sometimes," Hudler says with a laugh.

Cool describes how Hudler plays the game. At a time when the pace of play has never been faster, Hudler has that Gretzkylike ability to slow things down.

He thinks the game on a higher plane than most players and the net result is, he has become the offensive catalyst on the Flames' No. 1 line, which also includes its two best prospects, Sean Monahan and Johnny Gaudreau.

Collectively, they are the trio that has answered the biggest preseason question about the Flames - who will score? Hudler is tied for 28th in the overall NHL scoring race alongside Phil Kessel, Andrew Ladd and Alex Steen.

Gaudreau is No. 2 among rookies and Monahan, still the youngest player on the team at 20, has managed to avoid the sophomore slump that's dogged so many others from his draft class.

Physically, there is a cherubic quality to Hudler - a round face that crowns a thick neck on a small but solid 5-foot-10, 185pound frame. He is shy around strangers, uncomfortable in scrums and funny under the right circumstances, but ultimately prefers to live his life far outside of the NHL spotlight.

Flames general manager Brad Treliving, who took over the team last spring, was like a lot of people who knew Hudler only by reputation. Treliving inherited lots of leftover bits and pieces collected by several different regimes; it was up to him to learn quickly who might be part of the team's future and who would soon be part of its past.

"The first thing I've come to really appreciate about Jiri is he's one of the most intelligent players in the game," Treliving said. "He's not the fastest guy, but he makes up for it with his brain.

He's able to think the game at a high level. The biggest revelation for me was his competitiveness.

He's driven to win and he's a fiercely competitive guy, and he's really been good with our younger players.

"It's not all hugs and kisses with Johnny [Gaudreau]. Jiri expects certain things to get done and when they're not, he tells them - but not in a way where he's browbeating them or anything like that.

"The other really intriguing thing for me is, he's won," Treliving adds. "You can't duplicate that experience. We're playing big games right now; he's played in these types of games before. We may get all excited, but he knows it's only going to get harder because he's been there and done that. He knows the trail."

The marriage of Hudler and the Flames demonstrates how luck and changing circumstances sometimes trump even the bestlaid plans.

Hudler said he opted to sign with Calgary, originally in July of 2012, for two primary reasons: He liked the team's veteran core of forward Jarome Iginla, defenceman Jay Bouwmeester and goaltender Miikka Kiprusoff, and he thought they had a chance to win right away. Beyond that, Hudler always seemed to play well in Calgary. For reasons that he couldn't exactly explain, he just liked playing at the Saddledome.

"When [former general manager] Jay Feaster and I we were talking, I had a feeling like, this organization is going to be a contender team for the Cup," Hudler said. "We had a good team - Iggy, Kipper, Bo, Cammy [Mike Cammalleri]. I thought I was the right fit. And when I played here with Detroit, I had good games. So I'm like, 'The building is right for me.' "All those little details are more important than people think. I saw their very strong interest in me, so I decided to take that road in my career. Obviously, in Detroit, we had a great team. I learned a lot there and I thought I could be one of the big guys here."

Calgary subsequently made the decision to rebuild and all four of the core players who drew Hudler to the Flames were traded, retired or allowed to depart via free agency. It left Hudler as one of the few remaining leaders on the team.

He doesn't like the term mentor, even if that's what he's become to Monahan, Gaudreau and others.

"I wouldn't say 'mentor' because they're grown men, the kids," Hudler said. "You just have to talk to them and show them the ways you think are right for them."

Hudler joined the Flames in the same year coach as coach Bob Hartley did, coming out of the 2012-13 NHL lockout.

Hartley describes Hudler as "a human being, where you gain a lot by sitting with him, talking to him. He has unbelievable qualities. "Look at last year. He doesn't say a word to anyone. Suddenly, we find out that Monahan is at his house during training camp. Look at the progression of Johnny Gaudreau this year. Johnny took a major step with Jiri around him.

"Jiri is not a guy that wants the limelight. He gets undressed; he runs out; he wants to be left alone. But he's very caring and he knows the game inside out. I really believe he is one of the most underrated players in the NHL."

Hudler says his hockey-playing instincts come naturally to him; they are "not a thing you can work on. You've got to have that in you. I feel I can always calculate the situation. I'm thinking of other guys open as if it was me. How would I like to get the pass? So I look for teammates in better position. If he is not there, I am willing to take a shot or jam the net, but before I get the puck, I try to analyze the whole ice and the things around me.

"I like to play with players who are hungry for the puck; who want to score; then I see the kids I'm playing with score, I love that feeling too, when they're fist pumping. Sometimes, I tell them that it's embarrassing, the way they celebrate, but I do that too.

It's just the natural reaction of human beings - that happiness."

Happiness, according to Hudler, is an underrated quality in the building of a winning team.

"If you're happy or make a joke, the other guy is going to be happy too. We all sit here and talk about regular stuff, like people would in an office or any other work. We're having fun. You bring that to the ice and if you work hard, then one of the guys blocks a shot and everybody's into it. They think right away, 'If everybody else thinks that's great, then I'm going to do it too the next time. I'm going to get that cheer from the bench.' So it's contagious.

"You still need some character, but we've got a lot of character. ... With this team, we need to always be together. We cannot be on our own. I don't think it's our identity - and people love to watch it here."

Follow me on Twitter:@eduhatschek

Associated Graphic

Jiri Hudler of the Calgary Flames takes a shot on Craig Anderson of the Ottawa Senators during a November game at Scotiabank Saddledome, a building that has long been good to the former Red Wing.

DEREK LEUNG/GETTY IMAGES

Leafs have a day to remember - both on and off the ice
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By DAVID SHOALTS
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Friday, February 27, 2015 – Print Edition, Page S2


TORONTO -- dshoalts@globeandmail.com

The idea may have come from the Columbus Blue Jackets, but Toronto Maple Leafs general manager David Nonis still deserves much credit for the gamechanging David Clarkson trade.

Not only did he go a long way toward preserving his own career with the Maple Leafs, but Nonis gave the rebuilding program he is conducting with team president Brendan Shanahan a superb launch. In a deal that stunned observers around the NHL, the Leafs and Blue Jackets mutually solved their worst contract problems on Thursday when Clarkson, 30, was sent to Columbus for fellow forward Nathan Horton.

An added bonus for the Leafs was a rare win, a 3-2 decision over the Philadelphia Flyers. Leafs goaltender Jonathan Bernier did his best to join defenceman Morgan Rielly on the team's short untouchable list with a remarkable 47-save performance at the Air Canada Centre.

Both Nonis and Blue Jackets GM Jarmo Kekalainen can thank the NHL's wonky economics for offering a way out of their problems.

With Horton, 29, a long shot to play in the NHL again due to a serious back injury, the wealthy Leafs will gladly pay the five years and $26.1-million (all currency U.S.) left on his contract after this season. Under the long-term injured reserve rules, the Leafs don't count Horton's $5.3-million salary-cap hit if he can't play again and they decide to spend to the cap limit before his contract expires. The Blue Jackets, whose financial circumstances are far more modest than the Leafs, gladly took on Clarkson's contract, which also has five-plus years remaining with a similar cap hit of $5.25-million, because they will at least get someone who can play in return for all that salary.

In most long-term injury cases, an insurance policy pays most of the injured player's salary. But when the Blue Jackets signed Horton on July 5, 2013 (the same day Clarkson signed with the Leafs), they elected not to pay for a pricey insurance policy on the contract. Fortunately for the Leafs, that decision drove the Blue Jackets in their direction.

"With Nathan Horton there was a possibility we would have been paying 26 million for the next six years to sit in the stands," Kekalainen said. "This is a very important financial decision for us."

Clarkson is a Toronto native who was thrilled to be coming home in 2013 but he was never able to transfer the gritty game that brought him success with the New Jersey Devils to the Leafs. He was a 30-goal scorer for the New Jersey Devils through working the corners and front of the net. In 118 games for the Leafs, Clarkson managed just 15 goals and 11 assists and became a huge distraction around the team as his contract came to symbolize the struggles of management.

Nonis took a lot of heat for the contract, which appeared to be an albatross around the team's neck because in addition to the outsized salary, Clarkson had nomove rights. But most of those ripping Nonis for the deal managed to forget there were several other teams waving the same kind of money at him.

Getting out from under the contract as the Leafs embark on a rebuilding program as the NHL's trade deadline approaches on Monday - Clarkson was the fourth player traded off the Leaf roster in the past two weeks - was a master stroke by Nonis.

"The money lined up, which was a big part of it," Nonis said.

"From Columbus's standpoint, they were looking to get a player in for that money and we get a player [Horton] that if he could ever come back is an elite player.

"In the event he can't, we created some cap space."

Nonis said Clarkson came to realize he needed a fresh start elsewhere and agreed to waive his no-move clause when the GM approached him about the trade.

"Sometimes, players for whatever reason don't fit in a certain city or with a certain organization," Nonis said. "I believe in David. I think he's going to go there and play well. He's going to go fit in with that group and have the impact there that we hoped he would have here."

Horton only played 36 games for Columbus, with four goals and 14 assists, due to the back injury. He was a 20-goal scorer before that with the Florida Panthers and Boston Bruins, and won a Stanley Cup with the Bruins in 2011 but Kekalainen said there is "a good chance" his NHL career is over.

Nonis said he does not have any other trades cooking right now but "if there are trades that make sense for us, we're going to do it."

Associated Graphic

Leafs forward James van Riemsdyk is checked by Flyers defenceman Michael Del Zotto during Thursday's game. Van Riemsdyk and Del Zotto each had an assist in the game.

FRANK GUNN/THE CANADIAN PRESS

Sanchez could be a great starter, if he isn't closing
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By ROBERT MACLEOD
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Tuesday, March 3, 2015 – Print Edition, Page S1


DUNEDIN, FLA. -- It is almost inconceivable to measure the weighty hype that has been placed on the slender shoulders of Aaron Sanchez.

He is the second coming of either Jonathan Papelbon or Clayton Kershaw. Take your pick.

"He's got a chance to be one of the better starters in baseball, we all feel," Toronto Blue Jays manager John Gibbons was chirping last month about his 22year-old right-hander.

That may well be the case - if we ever get the chance to find out.

Sanchez will start here on Tuesday afternoon in the Blue Jays' first game of the Grapefruit League season, against the Pittsburgh Pirates. But don't read too much into that.

It appears likely, once the real games begin in April, that Sanchez will wind up back in the bullpen as the team's closer. It is far easier to stretch a pitcher out and then convert him into a reliever than to do it the other way around.

That could change, especially if fellow rookie Daniel Norris or newcomer Marco Estrada look completely out of place as they battle for the last spot in Toronto's starting rotation.

But if either Norris or Estrada looks at all capable, it will be back to the bullpen for Sanchez, where he made such a strong impression last season.

And besides, the Blue Jays don't really have anybody else to fill the closer role.

Sanchez hardly fits the menacing-closer persona. Clean cut and gangly at 6 foot 4 and 200 pounds, he looks more like Opie Taylor, only taller.

Were Sanchez to slide back into the bullpen, it would be one less roster headache for Gibbons and general manager Alex Anthopoulos to have to worry about.

Sanchez, of course, won't rock the boat just as long as he is collecting a major-league pay stub.

Even if he is the closer, he says, he will still show up to the ball park each day with a starter's mentality.

"That doesn't really leave, because I've done it for so long," Sanchez said. "That's like grade school for me, so I know what I'm doing. It was a little different coming out of the bullpen because it was something new to me. But starting is like riding a bike, just kind of hop on."

Sanchez was Toronto's firstround selection (35th overall) in the 2010 draft, a high school player out of Barstow, Calif., in San Bernardino County. To get a sense of the cosmopolitan feel of Barstow (pop. 22,639), just check out the city's pertinent features as listed by Wikipedia. Under entertainment, the Skyline Drive-In is the first cultural attraction to be mentioned. Under arts and culture, it is noted that Barstow has a series of murals along Main Street. Panda Express, Popeyes Louisiana Kitchen and Dunkin' Donuts all make the grade for culinary coolness.

So it was big news there when Sanchez made his big-league debut for the Blue Jays last year, mainly because he is the first person from Barstow to play in big leagues. After the season was over and the pitcher had returned home, Mayor Julie Hackbarth-McIntyre proclaimed Oct. 21 Aaron Sanchez Day in Barstow.

All that is pretty heady stuff for somebody with about two months of major-league service.

Imagine what they'll do if he makes the all-star team.

When Sanchez was called up to make his MLB debut for the Blue Jays last July, it was immediately evident he was something special, armed with a high-octane fastball and a devastating curve.

Gibbons threw Sanchez to the lions, sending him into action for the first time in the seventh inning in a tight game against the Boston Red Sox.

Veteran Sox sluggers Dustin Pedroia, David Ortiz and Mike Napoli were readying to hand Sanchez his lunch. Thirteen pitches later, all three had skulked back to the visitor's dugout after popping out against the rookie.

Over his next 23 games, as he moved into the closer's role, Sanchez was phenomenal, going 2-2 with a 1.09 earned run average, striking out 27 and allowing just 14 hits in 33 innings.

The worry is the sample size is so small. So whether he closes or starts this season, the big question is how he will hold up as opposing batters start to get a better read on him.

"I can't look at him and tell if he's going to be able to last over a full season and go deep into games," veteran Toronto starter Mark Buehrle said when asked about Sanchez's potential. "I mean, you see what he did last year out of the bullpen, so it's kind of hard to picture moving him out of that.

"But again, that's what we're down here [at spring training] for. I'm just glad I'm not in the situation where I've got to make those decisions."

The rising complexity of analytics in sports
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By JAMES MIRTLE
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Monday, March 2, 2015 – Print Edition, Page S1


BOSTON -- They come by the thousands, armed with laptops and tablets and degrees in math, statistics and engineering.

And they come with dreams. Big, data-driven dreams.

For the uninitiated, the Sloan Sports Analytics Conference is basically their Super Bowl, a two-day opportunity to geek out that has been increasingly flooded with technology and concepts to pitch to the teams and analysts in attendance.

Michael Lewis's Moneyball put sports analytics into the mainstream ages ago, but Sloan is where the results of that obsession now play out on an annual basis, with legions of college students from nearby MIT and Harvard - or even Ryerson and the University of Toronto - all pursuing jobs in the big leagues.

They don't necessarily want to be Billy Beane, the Oakland Athletics GM who became the face of the movement; they'll settle for being his brainy sidekick, who was memorably portrayed by a befuddled Jonah Hill on the big screen a few years ago.

The only problem? The movement has become so complex that, for many in attendance with a big idea or innovation, it's already passing them by.

When the conference opened on Friday, sports website Deadspin declared, "There's less and less low-hanging fruit for guys like Billy Beane, who were early to the notion of, well, simply bothering to look."

When it comes to baseball and basketball, at least, the Beane story seems almost quaint. More than a decade later, Sloan's research paper competition was won on Saturday by two remarkably detailed academic studies on defensive play in the NBA and advanced strike zone analysis in baseball.

Both make use of the advanced tracking technology now available in the two sports, and the $30,000 total for first and second place was split among six eggheads, including a visiting scholar at Harvard (Kirk Goldsberry) and a high-end data-driven company known as Baseball Info Solutions.

The depth this year at Sloan was enough for even analytics-heavy sites like Nate Silver's fivethirtyeight.com to pose questions such as: "Are basketball teams now so saturated with data that it's hard to use them for a competitive advantage?"

More and more, sports analytics are becoming as professionalized as the sports themselves. Enormous companies like SAP, which recently partnered with the NHL to provide analytics on its website, are after the vast sums of money being directed toward Big Data in pro sports and they have resources well beyond the many one- and two-man start-ups on hand.

Someone like Marc Appleby, who uses a unique optical camera tracking setup for hockey with his Ottawa-based company PowerScout, and has one NHL team as his primary client, is in tough in that environment - especially when there are league-level partnerships trying to crowd out the little guys.

"The innovation [at Sloan] is really impressive," Appleby said.

"It keeps you honest. ... If you blink, things will change, and you have to keep up."

At least on the NHL side, the good news is that hockey remains in a developmental stage. Some of the concepts from basketball - another arena sport with teams moving back and forth from end to end - and soccer - where goalies are a factor and wearable technology is making in-roads - can carry over, and marrying video with data is a popular new frontier.

The key, as it was with Beane, is trying to find inefficiencies: undervalued assets or aspects of play that can be better quantified and used to improve.

That's far easier to do these days in hockey (and tennis, golf and others that are gaining growing representation at Sloan) than the other big three - baseball, basketball and football - simply because this pursuit remains relatively new.

But the competition is growing.

"If I look broadly at where I saw the most growth this year in analytics, hockey was unbelievable," Sloan co-founder Jessica Gelman said.

"Baseball's gone through 10, 11, 12 exploitations of inefficiencies," Toronto Maple Leafs assistant GM Kyle Dubas explained, rattling off a list of stats that began with onbase percentage back in the Moneyball-era. "Hockey, we're at one or two."

The curious thing about Sloan is that what would be the most interesting innovations are typically left untold. What teams are doing that's truly different and pushing the boundaries of analytics is proprietary info, which means many of the panels offer only general hints of what's going on.

Dubas, for example, goes so far as to say his analytics team is working on things that are far from the public domain, but he won't offer a hint as to what exactly those innovations are.

Finding what's next and doing it first, at Sloan or elsewhere, remains paramount.

"You have to," Dubas said. "If you only go up to the line where something's publicly accepted, everyone is going to be at that same line. You have to try to advance it."

'Gruesome' racist cloud hangs over Russian fans
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Culture of far-right extremism within domestic league poses a threat to the safety of visitors to 2018 World Cup, researchers say
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By ROB HARRIS
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The Associated Press
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Saturday, February 28, 2015 – Print Edition, Page S2


LONDON -- Russian soccer is plagued by a racist and far-right extremist fan culture that threatens the safety of visitors to the 2018 World Cup, according to a report provided to The Associated Press.

Researchers from the Moscowbased SOVA Center and the Fare network, which helps to prosecute racism cases for European soccer's governing body UEFA, highlighted more than 200 cases of discriminatory behaviour linked to Russian soccer over two seasons.

"It shows a really quite gruesome picture of a domestic league, which is full of aspects of racism, xenophobia: The farright play a significant role in the fan culture," Fare executive director Piara Powar said in an interview with AP.

The report collated dozens of cases where fans carried out campaigns and sold far-right merchandise to collect money for imprisoned neo-Nazis. It provides a detailed breakdown of discriminatory incidents around matches, pinpointing 72 displays of neo-Nazi symbols, 22 acts against people from the Caucasus region, which includes Dagestan and Chechnya, and five occasions of abuse against black people. The report, which covers 2012 to 2014, does not include an apparent rise in the targeting of black players being documented this season, Fare said.

In the week when the soccer world was focused on the rescheduling of the 2022 World Cup in Qatar, this report - entitled "Time for Action" - underlines that the next World Cup will be held in Russia in three years' time, not the Middle East.

"Our hope in Russia in the lead-up to 2018 is we get action taken to protect the safety of fans and of players," Powar added. "Players have already said they will walk off if they hear racism. That is a danger. We want that to be addressed in advance."

The report was sent on Friday to FIFA president Sepp Blatter.

Without referencing the report's existence, a post on Blatter's Twitter account said on Friday: "In December, FIFA's [anti-discrimination] Task Force presented concrete action plan to tackle discrimination in build-up to 2018 World Cup."

The first systematic study of fan racism in Russian soccer shows the scope of the discriminatory behaviour that thrives in soccer despite President Vladimir Putin pledging to address the issue. "We see it and we believe it is a problem and unfortunately we have quite a number of such problems," he said in December, 2010, within hours of Russia winning the FIFA vote.

But the report argues that not enough is being done by Russian state and soccer authorities. The intelligence and insights gathered will now be handed over to world soccer's governing body by Powar, who sits on FIFA's antidiscrimination task force.

The report says "it will be difficult to ensure the safety of visitors" to the World Cup unless Russia implements a series of measures: apply sanctions for discriminatory conduct consistently; create a plan to take on far-right groups; prioritize educating Russians about xenophobia; and actively promote diversity in World Cup host cities.

Some of the Russian groups have links with racist organizations, a factor in the prevalence of abuse against black players and fans from Russia's own ethnic minorities.

The number of incidents of racism around stadiums has not decreased despite the threat of sanctions, including fines or stadium closings, the report says.

"This is not surprising because the boundaries of what is accepted in the football fan scene are blurry," it says. "Well-known coaches and players have photos taken with fans wearing swastika tattoos or T-shirts with Nazi symbols, and well-known singers sing songs with them in the stands."

The report particularly highlights offensive conduct by fans of Moscow clubs CSKA, Dynamo, Lokomotiv and Spartak, and Zenit Saint Petersburg. There is a prevalence of neo-Nazi and fascist symbols being adopted by far-right fan groups, including swastikas and Celtic crosses, and banners such as "White Pride Worldwide."

The report does highlight cases where UEFA has taken action against Russian clubs involved in European competitions. Monkey chants aimed at Manchester City midfielder Yaya Touré by CSKA Moscow fans during a Champions League game earned the Russian club the first of two UEFA racism sanctions in the 2013-14 season. That prompted the Ivory Coast player to warn: "If we aren't confident at the World Cup, coming to Russia, we don't come."

Associated Graphic

Manchester City's Yaya Touré, centre, listens to CSKA's Kirill Nababkin, left, during a Champions League match in Moscow in 2013. The Ivorian has warned his country will not play at the 2018 World Cup in Russia if they feel local fan racism has not been addressed.

IVAN SEKRETAREV/THE ASSOCIATED PRESS

Ireland wins second-straight in close tussle with UAE
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Irish get crucial 72 runs off just six overs during sixth-wicket partnership
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By DENNIS PASSA
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The Associated Press
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Thursday, February 26, 2015 – Print Edition, Page S2


BRISBANE, AUSTRALIA -- A four-wicket victory over a more-fancied West Indies to open its Cricket World Cup campaign seemed relatively easy after Ireland's tight two-wicket win over a team it was expected to beat on Wednesday.

Gary Wilson struck 80 from 69 balls in a late-innings burst to help the Irish edge the United Arab Emirates by two wickets with four balls to spare.

In the unfamiliar position of being the favourite after its opening upset win over the West Indies, Ireland won the toss, sent the UAE in to bat and had it in trouble at 78-4 before Shaiman Anwar came to the rescue with 106 to lift the total to 278-9.

The Irish never appeared comfortable in reply after losing Paul Stirling (three) in the second over, eventually sneaking over the line with key contributions from Wilson and Kevin O'Brien (50).

Needing almost 10 runs an over at one stage, Wilson and O'Brien smashed 72 runs in their sixthwicket stand off just six overs to revive the chase.

"Closer than we'd have wanted, but we'll take a win," Ireland captain William Porterfield said. "It helped to have wickets in hand, especially when you have Gary Wilson and [O'Brien] coming in at the end."

Mohammad Tauqir praised the contributions of Anwar and Amjad Javed, who scored 42 in a vital partnership and returned to take three wickets and a crucial catch.

"Shaiman played a superb knock, to go from 130-6 to 280, the credit goes to him, brilliant innings," Tauqir said. "Both of them played superbly.

"We bowled well up to 35 overs, and later on there was dew and the ball became wet - and it was a very good batting wicket and they batted well. It went to the wire," Tauqir added.

For the first time in the tournament, there will be two matches on a midweek day. On Thursday, Afghanistan plays Scotland in Dunedin, New Zealand, with the winner set to pick up its first-ever win at a World Cup, and Sri Lanka plays Bangladesh at Melbourne Cricket Ground.

Sri Lanka opened with a 98-run loss to New Zealand and beat Afghanistan by four wickets with 10 balls remaining.

Both teams have had personnel issues in the past few days, with Sri Lankan all-rounder Jeevan Mendis ruled out because of a hamstring injury he sustained at training on Tuesday. Upul Tharanga was flying to Melbourne to take his place in the squad.

Bangladesh suspended pace bowler Al-Amin Hossain for breaking a team curfew in Brisbane.

Sri Lanka has 32 wins in 37 oneday internationals against Bangladesh.

Afghanistan is playing at its first World Cup in the 50-over format and Scotland is at its third. No team has faced greater odds of reaching the tournament than Afghanistan, which has been a member of the International Cricket Council for only 14 years and has a team made up in part by players who learned the game in refugee camps while in exile from their war-torn homeland.

In Auckland, the hype continues to build for one of the most-anticipated matches in the tournament - unbeaten New Zealand playing Australia in a game that could decide which team finishes atop Pool A - on Saturday.

New Zealand all-rounder Corey Anderson said he expects Australia to use sledging or verbal intimidation to try to unsettle his team, which has won its first three matches. And Australian opener David Warner, never one to mince words, said he expects to be the target of abuse from the sellout crowd at Eden Park, which will watch the first ODI between the teams in four years.

"I hope they come out and boo us," Warner said of the Auckland crowd. "That's what's going to happen. We love it, it gets us up and going, gets the adrenalin going."

Meanwhile, Zimbabwe fast bowler Tendai Chatara was reprimanded after pleading guilty to "conduct contrary to the spirit of the game" during his team's 73run loss under the DuckworthLewis system to the West Indies on Tuesday.

Associated Graphic

Ireland wicket-keeper Gary Wilson, left, looks on as the UAE's Shaiman Anwar plays a shot during their Cricket World Cup match in Brisbane, Australia, on Wednesday.

INDRANIL MUKHERJEE/AFP/GETTY IMAGES

Vancouver to host 2016 World Sevens Series
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Canada outbids more than 20 countries to win the right to the two-day men's tournament
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By DAVID EBNER
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Tuesday, February 24, 2015 – Print Edition, Page S2


VANCOUVER -- In a showcase on a sunny, warm February day, Rugby Canada officials took a rugby ball from the lawn of the provincial legislature in Victoria, flew by Helijet to Vancouver, and finished at Robson Square downtown to announce that Canada has scored a spot on the calendar of men's World Rugby Sevens Series.

The two-day men's tournament will start next year in March at BC Place and feature 16 teams. The 2014-15 calendar features nine stops, starting in Australia and Dubai and finishing in Scotland and England.

The BC Place tournament will be played on new artificial turf to be installed in the coming months so that it is also ready for the women's soccer World Cup in late spring and early summer. The soccer final is set for BC Place on July 5.

Canada was one of more than 20 bidders for a spot on men's sevens schedule. The win is another gain for Canada in rugby, particular in sevens. Canada had already secured a date on the women's sevens tour; the first takes place April 18-19 in Langford, B.C., near Victoria.

Sevens rugby is a shorter version of the traditional sport and features seven players, rather than 15, a side. It joins the Olympics in 2016 in Rio de Janeiro for men's and women's play. Canada's women are No. 3-ranked this season, and the men are currently 13th after finishing sixth last season.

Vancouver's success hosting the 2010 Winter Olympics was cited by World Rugby chairman Bernard Lapasset.

"Vancouver is a worldrenowned event location and a city with a tremendous track record of hosting incredible events," he said in a statement.

Canada has spent several years improving its position on the global rugby scene. In 2012, Rugby Canada opened a training headquarters in Langford, B.C., and Own The Podium has spent about over $5-million the past two years supporting the women's and men's sevens teams.

Rugby Canada has also been supported by World Rugby, the organization formerly known as the International Rugby Board.

In 2013, the IRB provided Rugby Canada about $2.6-million, which was nearly 20 per cent of Rugby Canada's $13.4-milion budget.

Rugby Canada has pulled in more money by staging international events. The women's and men's sevens series - both scheduled to run annually for four years - will provide another significant boost to its income.

Gareth Rees, Canada's bestever player, was a co-chair of the bid committee to win the men's sevens event. He has watched the long, slow growth of rugby in Canada, before the recent bigger gains. "[This is] an incredibly important moment for the sport of rugby in our country," said Rees of hosting the men's sevens tournament.

Rees grew up in Victoria and was a long-time captain for Canada, playing in four World Cups.

He was named to the World Rugby Hall of Fame in 2011.

"Vancouver is the perfect choice," said Rees. "We are confident the sport, entertainment and festivities will capture the imagination of Canadians."

Sevens tournaments can become hot social affairs around a game played fast and hard.

The Cathay Pacific/HSBC Hong Kong Sevens, in late March, has a raucous and glamorous reputation.

The Vancouver bid received unspecified support from all three levels of government.

The cost of the turf replacement at publicly owned BC Place was also not quantified.

The stadium is run by BC Pavilion Corp., the Crown corporation known as PavCo, which said it had planned for new turf in fall of 2016.

The project was hastened because World Rugby requires better turf, and many soccer players have complained about the low quality of the BC Place turf. The Canadian Soccer Association and Rugby Canada will help pay for the new surface.

Associated Graphic

Canada's Liam Underwood, right, attempts to tackle U.S. player Folau Niua during the USA Rugby Sevens tournament in Las Vegas on Feb. 14. The Canadian men's team is ranked 13th.

ISAAC BREKKEN/AFP/GETTY IMAGES

Wiggins ends his teen years in style
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By DAVID EBNER
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Wednesday, February 25, 2015 – Print Edition, Page S2


VANCOUVER -- Two winters ago, Andrew Wiggins came home.

Wiggins was in Grade 12 and his West Virginia prep school played a mid-February game at a packed gym in Hamilton. The stands heaved with fans yearning to see the next big thing. To see the chrysalis before it is a butterfly. To be able to say they were there to see the can't-miss kid from nearby Vaughn, Ont.

Afterward, a reporter asked what Wiggins wished people should know to better understand the person behind the player. "That I'm only 17," was his quick response.

Wiggins turned 20 on Monday.

He had relished his teenage years, but amid all the attention, from prodigy to No. 1 NBA draft pick, his hesitance to embrace the superstar-in-the-making hype provided fodder for critics: He did not have the fire of a Kobe Bryant to turn his remarkable athleticism into domination on NBA courts.

In 54 games as a rare teenage starter in the NBA, however, Wiggins has done much to dismantle the argument. The words of an unnamed NBA source in an ESPN article in late 2013 begin to look flat-out wrong: "He's got zero aura about him." Instead, Wiggins's performance has him as the favourite for NBA rookie of the year, and he has delivered under a constant spotlight.

In two games against Cleveland, the team that drafted then traded him, Wiggins scored 27 and then 33 points, much of it directly against LeBron James. At the rising stars game during the NBA all-star weekend, he poured in 22 points and was named MVP. In his first game after the break, and last as a teenager, he helped the woeful Minnesota Timberwolves defeat the favoured Phoenix Suns.

He did it with force. In the third quarter against the Suns with the game tied, he drove to the hoop and threw down a dunk with a defender's hand in his face. And with 20 seconds left in the game and Minnesota up by a point, he corralled a bounce pass with his left hand and long reach, and again went to the hoop, colliding with a defender and draining the basket to secure the win.

Then, on his birthday, Wiggins scored 30 points against Houston and starred in an instantly viral sequence that started with his shut-down defence of Rockets guard James Harden - the NBA's leading scorer - at one end, and finished with a Wiggins dunk at the other.

His numbers do not compare with the teenage successes of James or Kevin Durant, but his improvement has been rapid.

Since the start of 2015, he has scored an average of 18 points in 24 games with a shooting percentage of 46.5 per cent.

In high school and as a collegian at Kansas, Wiggins would sometimes drift on the court. In Minnesota, as a pro, he's been forced to lead. It has attracted notice. In December, Bryant and the Los Angeles Lakers played the Timberwolves, and Bryant passed Michael Jordan for third on the NBA's all-time scoring list.

"I remember being Andrew Wiggins," Bryant said. "I remember playing against Michael my first year. It was like looking at a reflection of myself 19 years ago."

ON THE WEB

Mavericks 99, Raptors 92 Toronto falls to Dallas at the American Airlines Center.

For the story, go to globesports.com

Associated Graphic

The Timberwolves' Andrew Wiggins drives against the Hawks' Kyle Korver in Atlanta.

KEVIN C. COX/GETTY IMAGES

Revamped NHL website to track enhanced stats
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By SHANE DINGMAN
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Friday, February 20, 2015 – Print Edition, Page S1


TORONTO -- The NHL is embracing the advanced-statistics movement, but in doing so is eschewing some of the parlance fans of hockey analytics may have become familiar with.

The league will announce a partnership with SAP AG on Friday, which will revamp the statistics pages on NHL.com.

The new site will track in real time the traditional goals, assists and plus-minus numbers, but will also add 30 new "enhanced stats" that many in the sports analytics community believe are long overdue.

"It's about time they added some things that everyone else is putting in common usage. Basically the NHL is catching up to the guys in their mother's basement," said Andrew Thomas, Canadian expat and co-founder of the War-on-ice.com hockey data site and a professor of applied statistics at the University of Florida.

The league and teams have at times dismissed fan analysis of publicly posted hockey data, but Thomas has seen the new stats and calls their arrival on NHL.com a validation of all the work by those basement number crunchers. "They are still cutting back from what we've got, condensing some of the scoring situations. But it's still a good comprehensive collection."

The new stats will be broken down between shooting statistics, shooting percentages, shooting stats per time on ice and scoring stats. What stat aficionados won't see much of are names such as Corsi, or Fenwick, names of a former coach and analyst that are often used when describing possession numbers such as shot attempts and unblocked shot attempts.

The league's new site will use these common terms only in explanatory text, preferring new abbreviations such as SAT or USAT in their tables and graphs.

Even PDO (named after an Edmonton Oilers fan nickname, and not an acronym) becomes SPSV per cent - which sums up a team's even-strength goals divided by shots on goal with evenstrength save percentage.

Most of the data the league will release will be variations on wellknown possession stats, but will also include stats on goals by time and penalties taken by time.

"For years NHL.com's stats page was useless," said Travis Yost, a writer for TSN's hockey analytics team."Even a small step like this is Herculean."

Yost points out that while some stats can be filtered by whether the in-game score was even, behind or ahead, he questions the math on the "close" filter (which tracks when a team is within one goal of the opponent). "Those were used for so many years, but that's actually one of the things we've been able to improve on."

The updates to the NHL stats will roll out in three phases. As of Friday, some 30 new stats will be available for fans to dig into. SAP and the league will be tracking more than 50, and more will roll out over time. In the second phase, a playoff predictions site will come online and more advanced filtering should be possible. At the opening of the 201516 season, phase three will offer stats for every player in the NHL's 100-year history as part the centenary celebration plans.

Absence of malice
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As crime rates in Canada decline, why aren't police budgets doing the same?
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By JOHN LORINC
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Friday, February 27, 2015 – Print Edition, Page P24


There are a lot of theories about why crime rates are falling: demographic trends (an aging society has fewer miscreants); environmental factors (the banning of lead gasoline in the 1970s); or tipping points (as Malcolm Gladwell wrote about in his book of the same name). Whatever the reason, the statistics are unambiguous--in recent years, crime rates have fallen in Western countries generally, and in Canada specifically. As the chart to the right shows, however, what hasn't dropped is spending on policing. The rising costs have stretched municipal budgets, and led cities like Toronto to look for ways fo rein in expenses. (In an extreme example in California, the city of Stockton filed for bankruptcy in 2014, in part because of police pension liabilities, and laid off a quarter of its force). Bottom line: Crime-related costs, including losses to victims, take a 5% bite out of the Canadian GDP each year; policing, court and prison budgets account for about half that figure.

CRIME BY CATEGORY

(per 100,000 people, 2013)

CANADA

Assault: 139

Robbery: 66

Motor vehicle thefts: 207

U.S.

Assault: 229

Robbery: 109

Motor vehicle thefts: 221

SALARY RANGE

Toronto Police Service: $57,777 - $90,623

Service de police de la ville de Montreal: $40,837 - $70,050

Calgary Police Service: $59,404 - $91,391

Vancouver Police Department: $64,513 - $98,571

New York City Police Department: $44,744 - $90,829

Stockton Police Department, California: $59,640 - $76,620

TOTAL UNIFORMED OFFICERS

Toronto Police Service: 5,266

Service de police de la ville de Montreal: 4,923

Calgary Police Service: 1,900

Vancouver Police Department: 1,327

New York City Police Department: 35,000

Stockton Police Department, California: 373

RATIO OF POLICE TO PEOPLE

Toronto Police Service: 1:475

Service de police de la ville de Montreal: 1:329

Calgary Police Service: 1:520

Vancouver Police Department: 1:483

New York City Police Department: 1:240

Stockton Police Department, California: 1:777

PRISON POPULATION IN CANADA VS. U.S.

CANADA

Average of 41,000 offenders in custody on any given day (2012/13)

118 prisoners for every 100,000 people

U.S.

6.9 Million (2012)

920 prisoners for every 100,000 people

Cost to keep a person in prison for a year, in Canada vs. the U.S.

CANADA

$114,364 (2010/11)

U.S.

$21,000 to $33,000 (2010/11)

Associated Graphic

PHOTOGRAPH FRED LUM/THE GLOBE AND MAIL

Saturday, February 28, 2015

Feedback
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Friday, February 27, 2015 – Print Edition, Page P6


Cash or Cloud?

RBC broke from the banking pack when it invented a cloud-based digital wallet, but some readers are still skeptical. One said: I honestly don't understand the appeal of this technology. How does this result in a better user experience than pulling out a conventional credit card and using the tap/PIN function? Another had an alternative, creative solution: What if I taped my tap card to my phone? And from a diehard Apple user came some grudging respect: No, it can't beat Apple. But a nice story of skunk works at a stodgy bank, nevertheless.

Toy Stories

Dawn Calleja's profile of Toronto toy company Spin Master had many readers reminiscing about their childhood. When I was a 10-year-old I played with toys all the time. But my 10-year-old has almost no interest in toys any more. I hope the company can compete with video games and tablets.

One commenter was happy to see a Canadian company being profiled: Great story and very interesting. I had no idea of Spin Master's existence until now, although I did happen to see the Zoomer Dino on a pre-Christmas TV show, and the kid who was playing with it was having a lot of fun.

Under Pressure

In December's Corporate Governess column, a reader asked whether he should confront a colleague he had slept with about the state of their relationship. One reader was adamant that he should not: The Governess should in no way advise this man to bring up the issue. In this current climate, this could deep-six his career. Another commenter took what the Governess had to say as a warning--Consent in the workplace can be more complex than someone saying yes. If he can be thought of as having any influence over her, then she could claim she felt pressured regardless of it being a consensual act.

Bombardier seeks rebound as new CS300 takes flight
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By NICOLAS VAN PRAET
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Saturday, February 28, 2015 – Print Edition, Page B1


MONTREAL -- Bombardier Inc. has launched its biggest ever plane into the skies, hoping the momentum of the jet's first test flight will generate crucial sales in the months ahead.

Aiming to rebuild investor confidence after failing to deliver on financial and operational targets over the past two years, Bombardier on Friday executed the first airborne test on its larger C Series plane, the CS300. The single-aisle airliner took off at Mirabel, Que., under a clear sky and frigid -21 C temperature to a driblet of applause from a small group of assembled customers, employees and media assembled near the runway.

Bombardier chief executive Alain Bellemare stood front and centre at Friday's event. Handed the job barely two weeks ago in a shakeup that saw former CEO Pierre Beaudoin become executive chairman and cede daily management of the company, Mr. Bellemare faces the task of getting the plane and train maker back on course.

"I feel good about what we've done and where we are," Mr. Bellemare said in an interview. "We have the financial ability to manage our way successfully, complete the certification of [current aircraft] programs, bring them to market and regain our financial strength in the long run."

Critics argue that Bombardier is still trying to do too much, stretching its resources over six different aircraft families and the world's biggest train manufacturing unit, in addition to a new aerostructures business. Some say it should consider selling the least profitable parts of the company or striking major commercial partnerships to lower costs.

Bombardier has hinted it will do just that, saying this month it will "explore other initiatives" such as taking part in industry consolidation. The company also launched a recapitalization plan that saw it suspend its dividend and issue $1.1-billion of new equity. Bombardier is also raising $2.25-billion (U.S.) in debt, including $1.5-billion of notes due in 2025. The bonds were priced to yield 7.5 per cent, more than 600 basis points above 10-year government of Canada bonds, showing the substantial risk premium demanded by Bombardier investors.

Mr. Bellemare declined to comment specifically on his strategic plans, saying he's currently doing reviews with business units and trying to understand how best to use the company's resources. "Clearly, the name of the game will be about focus, perfect execution and doing it in a very disciplined manner."

Bombardier is developing the C Series, a new family of single-aisle airliners, to fill what it sees as a hole in the market for aircraft seating 100 to 150 people. It is counting on the planes to fuel aerospace revenue as its CRJ regional jets fade, projecting it will tally up to $8-billion (U.S.) in sales annually from the program when it ramps up production.

The CS300 is the larger of Bombardier's two C Series aircraft, seating up to 160 people in a maximum-seat configuration.

The plane vaults the company squarely into the crosshairs of giants Boeing and Airbus, which are also launching revamped versions of their bestselling 737 and A320 jets, respectively.

Bombardier customers say privately that the two larger and better-capitalized rivals are engaging in a whisper campaign against the Canadian company, telling prospective clients that it won't survive its current financial challenges. One customer said the Canadian executives are too nice in the way they've countered that reputational smearing so far.

"It's a cutthroat industry," one customer said. "We're trying to convince them to be tougher."

Mike Arcamone, who leads Bombardier's commercial aircraft unit, said Bombardier will let the product speak for itself.

"We are going to be around. And they're running scared," he said of his competitors. "They're running scared because they know it's a great aircraft."

Executives overseeing the C Series program said the jet is meeting all performance targets and remains scheduled to be certified by the end of the year.

Among the plane's advantages, Bombardier says it is four times quieter than competitors' offerings and 20 per cent better on carbon dioxide emissions.

Bombardier has tallied 243 orders so far for the C Series jets. Executives said Friday they're very comfortable with that number, saying interest from around the world proves there will be future global demand.

Among Bombardier's challenges will be trying to counter the discounts being offered by Boeing and Airbus. The two rivals can spread out such price cuts over hundreds of planes and an order backlog that stretches several years. On Friday, Airbus announced continued strong orders for its A320 program, saying it will ramp up production of the airplane to 50 units a month by the first quarter of 2017. By contrast, Bombardier projects it will be cranking out 10 C Series jets a month by the end of 2016.

Bombardier (BBD.B) Close: $2.60, down 1¢

Associated Graphic

After years of delays, Bombardier's CS300 takes off on its maiden test flight in Mirabel, Que., on Friday.

RYAN REMIORZ/THE CANADIAN PRESS

Can we call a truce in the trader-TMX war?
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By TIM KILADZE
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Tuesday, March 3, 2015 – Print Edition, Page B2


tkiladze@globeandmail.com

A war of words is bubbling up on Bay Street between disgruntled traders and the country's all-powerful stock exchange. In the name of good Canadian manners, it's best we take a timeout before it boils over.

Once again, a growing number of sell-side traders are furious with TMX Group Ltd., which runs the Toronto Stock Exchange. The last time we saw such animosity was just before the financial crisis, when many of the same players were incensed over the TSX's effective monopoly, arguing it gave the company free rein to charge ludicrous transaction fees.

Fed up, a handful of investment dealers combined forces to build the alternative trading venue Alpha. What resulted wasn't exactly a truce, but the worst tempers certainly were calmed.

Sadly, the market's evolution has soured relations between Bay Street and the TMX again, and this time the fight is arguably even more rancorous than the last.

You might expect the divide to have something to do with topical market issues. There's the rise of high-frequency traders, the recent order protection rule and the rerouting of retail trade orders to the United States.

This runs deeper than that. It's the same old gripe over the TSX's market power. Ever since TMX Group was taken over in 2012 in a deal that also saw the company acquire Alpha, the TSX's dominance in the Canadian marketplace has arguably become as oppressive as before.

To be fair, TMX doesn't have an all-out monopoly the way it once did. Canada now has a number of alternative trading venues that compete with it in some form. However, the exchange operator still handles the lion's share of trading volume in this country. And that market power has left the relationship between TMX and traders looking torn and frayed.

For instance, last fall, the TMX launched a vigorous campaign to prevent retail traders from sending their orders to the United States - going so far as to call it the biggest issue in equity markets today.

Furious, the retail traders privately griped that they wouldn't have to do so if the TSX's transaction fees weren't so high. If they could trade here and get a better price for their clients, they say they happily would.

Because the TSX remains such a dominant player, we've seen the same pattern emerge as the one that materialized pre-crisis.

Most notably, a number of investment dealers have banded together to launch Aequitas, a brand new Canadian exchange.

This time, people are skeptical that Aequitas will change the status quo very much. Alpha came and went, after all. What we need, then, is a public debate about the state of the markets, one where both traders and the TMX drop the spin.

For example, the TMX uses aggressive language when spelling out the problems with U.S. retail orders but glosses over the fact that it is terrified of seeing its trading volumes dwindle. To lure new companies to go public or list on its exchanges, the operator needs to prove that its markets will provide them with a lot of liquidity.

More than that, TMX can't afford to watch another Canadian giant delist from one of its exchanges the way Lululemon Athletica Inc. did. Just last month Imax Corp. left the TSX - what if BlackBerry Ltd. went next?

Meanwhile, what traders happily leave out of their arguments is that Canadian banks have been struggling how to make money off retail trades ever since Royal Bank of Canada slashed its retail trading commissions in December, 2013, to try to win market share from Toronto-Dominion Bank.

Because every online brokerage followed suit, the banks have had to scramble to make up the lost revenue.

Ironically, the traders often forget that, post-TMX takeover, it's not them against the exchange any more. If they work for a Canadian bank, there's a good chance their employer has a stake in Maple Group Acquisition Corp., the consortium that bought TMX Group. In other words, fighting TMX is like fighting a different division of their company.

For now, the best referee might be hard facts. Data on hot-button trading issues in Canada are relatively scarce. For years no one knew how much Canadian trading volume stemmed from high-frequency trading, leaving much of that debate pointless.

The same is true with U.S. orders. The TMX can fear-monger with threats of mass retail trades being sent to the U.S., but the truth is that no one knew how much was being sent south of the border before the regulators issued a stern warning - not even the traders.

Associated Graphic

Since RBC slashed commissions to try to win share from TD Bank, banks have struggled to make money off retail trades.

FRED LUM/THE GLOBE AND MAIL

WHY WE CAN'T AFFORD TO RAISE THE TFSA CONTRIBUTION LIMIT
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Last year, the widely popular tax-free savings accounts cost the government $410-million in tax revenue. If the limit were doubled, TFSAs would cost Ottawa $14.7-billion a year by 2060. The provinces would be out an additional $7.6-billion
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By ROB CARRICK
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Thursday, February 26, 2015 – Print Edition, Page B1


rcarrick@globeandmail.com

Higher TFSA contribution limits could cost us all.

Launched in 2009, tax-free savings accounts may be the most important development in Canadian personal finance since the introduction of the registered retirement savings plan back in the 1950s. TFSAs are Swiss army knives - a financial knife, corkscrew, screwdriver and more. But doubling the annual contribution limit of $5,500 is a bad idea.

Message to the federal government: Please don't, because we can't afford it.

At issue is the tax revenue the federal government goes without when someone puts money in a TFSA. While contributions are made with after-tax dollars, all investment or savings gains in the account are, like the name says, tax-free.

TFSAs are widely popular, but they're new enough still that they cost the government only $410-million in tax revenue in 2013. Future contributions to TFSAs and continuing tax-free gains within them will push this number higher in future years, but we can live with that because of the benefits of having people use these savings vehicles. Doubling the amount of money people can put in TFSAs to $11,000 is pushing it, though.

A report from the Parliamentary Budget Officer this week says the federal government would lose $14.7-billion a year in revenue by 2060 and the provinces would lose $7.6-billion a year. That's a tremendous amount of money to forgo in a country with a population aging as quickly as ours.

The latest population estimates from Statistics Canada suggest that seniors will account for 25.5 per cent of the population by 2061, up from 14.4 per cent in 2011. You can imagine what this trend will mean for government spending on health care and income programs such as Old Age Security and the Guaranteed Income Supplement.

In fact, Ottawa was so concerned about the sustainability of OAS - it's funded from general government revenue - that it announced that it would gradually increase the age of eligibility to 67 from 65 starting in 2023. Ottawa saved a whack of money doing that. Now, it's looking at depleting the savings it realized with a higher TFSA contribution limit.

An aging population will weigh on our economic productivity, so we can't depend on future growth to sustain government spending. This suggests taxpayers will have to pick up the slack. Higher taxes are one possibility, although they'd be a tough sell for any government facing an electorate with a heavy weighting of seniors.

Reduced health-care coverage is another lever for governments with a revenue shortfall. More services and procedures could be delisted from provincial health-care plans, which means more out-of-pocket expenses for the prime consumers of medical services. Seniors of the future, that's you.

Finally, higher TFSA limits would put a strain on OAS and GIS and possibly lead to benefit cuts or more severe clawbacks.

One of the benefits of TFSAs is that money you withdraw from them isn't considered taxable income and thus can't trigger clawbacks of OAS or GIS benefits for retirees. If more people use TFSAs to generate retirement income, then there will be fewer clawbacks and thus more GIS and OAS money being paid out.

Seniors hate those clawbacks, but let's remember why they're there. It's to ensure that full benefits go to individuals who need them, and to taper these benefits down for more affluent seniors. To conserve OAS and GIS, clawbacks might actually have to become more aggressive if we raise the TFSA limit.

A report this week by Prof. Rhys Kesselman of Simon Fraser University makes a case that doubling the TFSA contribution limit benefits mainly the wealthy, and it's persuasive. The report says that in 2012, the most recent year for which there are numbers, just 23.5 per cent of TFSA holders made the maximum contribution, down from 30.2 per cent in 2011 and 39.6 per cent in 2010.

But TFSAs are so versatile that higher limits would benefit more than just rich people.

Young people saving for a house would have more room to build their down payments without losing money to tax. Seniors would have more space to shelter money they're required to withdraw every year from their registered retirement income funds, but choose not to spend.

Higher TFSA limits are a fine idea, but we have to weigh the short-term tax savings for households against the longterm strain on government finances. Decades from now, we may look back on an increased TFSA limit and say it really cost us all.

More on TFSAs: Check out the great discussion about doubling the TFSA limit in my Facebook personal finance community this week. facebook.com/robcarrickfinance

Associated Graphic

JOHN SOPINSKI/THE GLOBE AND MAIL SOURCE: OFFICE OF PARLIAMENTARY BUDGET OFFICER

Invoice switched, Target supplier stuck with $232,328 claim
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By MARINA STRAUSS
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Friday, February 20, 2015 – Print Edition, Page B1


The court squabble between insolvent Target Canada and some of its suppliers has heated up over allegations the retailer benefited from the timing of its court filing for creditor protection.

A Toronto-based market research firm that did work for Target says it was told to switch an invoice from the retailer's U.S.-based parent to Target Canada just several days before the filing, leaving the firm with what it says is now a $232,328 unpaid claim.

Invoices from the research firm, Advitek Inc., were normally sent to Target's U.S. head office. But two days before Target Canada filed for court protection from creditors, the parent company asked Advitek to "change the invoices to Canada instead," Kathrin Menge, a manager at Target Canada, wrote in an e-mail to her U.S. counterparts.

"I find this very suspicious," Ms. Menge says in the e-mail, which was filed as evidence in the Ontario Superior Court of Justice this week.

The e-mail was dated Jan. 22 - a week after the retailer got court protection and announced it was leaving the country.

Suppliers are pushing to find out the precise timing of parent Target Corp. executives' decision to pull the plug on its Canadian division, suggesting the retailer avoided paying bills while bulking up on inventory in the 30 days before the filing in order to cash in on subsequent going-outof-business sales.

The vendors, who are fighting to get back hundreds of thousands of dollars they're owed by Target Canada, are just the tip of the iceberg among victims of the U.S. discounter's failing here.

On Thursday, the suppliers made some progress in their battle. Justice Geoffrey Morawetz agreed with a timetable for Target and its court-appointed monitor to produce information on an array of matters tied to the contentious issues.

The judge even gave lawyers for the suppliers and market researcher the right to cross-examine Target Canada's legal counsel on the issues, with notification about the questioning to come by March 30.

The suppliers are seeking to unearth "the tactics employed by Target USA and Target Canada to pay as little as they can to get out of this with maximum benefit and minimum risk," Lou Brzezinski, a lawyer at Blaney McMurtry LLP that represents Advitek Inc., said in an interview.

In raising questions about Target's timing, Joyce Rees, president of Advitek, said in a sworn statement that she had been specifically instructed to direct her invoices last fall for her work - code named Project Loon - to the attention of an executive at Target U.S.

But Ms. Menge, the Target Canada official, wrote in her Jan. 22 e-mail to her U.S. counterparts: "Two days before the Canadian closure [was] announced you asked Advitek to change the invoices to Canada instead. I find this very suspicious, and I feel absolutely terrible for Advitek who is now out around $250,000."

Target Canada had issued to Advitek a cheque, dated Jan. 13, for $39,267.50 to cover yet other work the firm had done. Advitek's Ms. Rees received that cheque on Jan. 26 but when she tried to deposit it the same day, it bounced. (Another Target Canada market researcher told The Globe and Mail last week of the same experience of having the retailer's Jan. 13 cheque returned because of insufficient funds.)

Other suppliers suggest in court filings that they shipped inordinately large amounts of goods to Target Canada in the 30 days before the retailer's creditor protection filing. If the proceedings were a bankruptcy, the vendors would have the right to ask to repossess those 30-day goods.

By the end of January, "Target Canada, according to our calculations, would have had in its stores and distribution centres goods totalling approximately $2,241,000, which is an amount far in excess of anything it could reasonably anticipate selling in the next six months, and certainly not the next quarter," Shell Bern, president of baby merchandise suppliers ISSI Inc. and Elfe Juvenile products, says in a court filing.

Alvarez & Marsal Canada Inc., the monitor in the Target proceedings, said this week that its inventory on hand as of Dec. 15 was about $623.1-million, excluding goods in transit, and, as of Jan. 15, about $526.6-million, excluding goods in transit.

Associated Graphic

Suppliers suggest in court filings they shipped inordinately large amounts of goods to Target in the 30 days before the filing.

FRED LUM/THE GLOBE AND MAIL

'The finish line is clearly in sight'
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Maple Leaf Foods turns a corner
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By ERIC ATKINS
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Friday, February 27, 2015 – Print Edition, Page B1


Maple Leaf Foods Inc. is nearing the end of a seven-year shakeup that has remade Canada's largest food processor.

The Mississauga-based maker of Schneiders bacon and Shopsy's hot dogs announced the closing of its two remaining legacy meat plants in Toronto and Kitchener, Ont., and said its new, state-of-the-art factory in Hamilton is nearing full production.

The company has already shut several plants and distribution centres across Canada, expanded three factories and sold off a handful of divisions, including the $1.8-billion sale of the maker of Dempster's Bread.

"The finish line is clearly in sight," said chief executive officer Michael McCain, who launched the $560-million makeover in a bid to boost competitiveness and slash production costs in the face of a rising Canadian dollar.

The transition has been anything but painless for the company, its shareholders and employees, with more than 1,000 of 12,000 jobs gone and several quarters of multimilliondollar losses. The revamp cost $97-million in 2014 and is expected to cost another $13million this year, Mr. McCain said in a call with analysts on Thursday.

The Globe and Mail has reported international food companies have shown an interest in buying the company when the transition is complete - a development that could clear the way for the exit of Mr. McCain, who owns one-third of the company's shares.

In a sign of confidence, Maple Leaf Foods doubled its quarterly dividend on Thursday, even as it reported its seventh consecutive money-losing quarter.

A drop in sales that followed a rise in pork prices last year and the duplicate costs that came with operating production lines at different factories drove Maple Leaf Foods to an adjusted fourthquarter loss of $13.7-million or 8 cents a share, compared with $56-million or 41 cents a year earlier. The full-year loss narrowed to $75-million, or 58 cents a share, from $136-million or $1.08.

The net loss for the quarter was $28-million or 20 cents, compared with a profit of $511-million or $3.58 in the same period last year, which includes profit from divisions that have been sold, or discontinued operations.

Maple Leaf Foods does not provide profit guidance, and Mr. McCain would not say when he believed the company would begin making money.

In the past year, the company's sales and costs have been hit by soaring pork prices amid a North American outbreak of a virus that killed millions of piglets and reduced hog supplies. Maple Leaf responded by raising prices for bacon and ham, a move that drove consumers to cheaper brands and sent sales down $13million. Mr. McCain said "time and patience" will prove higher prices were the right move, and pointed to other economic tailwinds in the company's favour: a lower dollar that will aid exports, and cheaper energy costs in addition to lower prices for hogs and the food they eat.

He said these factors, combined with the benefits of the revamp, will boost profit margins to 10 per cent this year from 1.5 per cent in late 2014. "We're entering 2015 with what we believe is very positive momentum," he said.

Maple Leaf Foods said it plans to close its Toronto plant by the end of March. On Friday, it will close a Kitchener factory that opened more than 100 years ago.

Maple Leaf Foods (MFI) Close: $21.97, down 71¢

THE SEVEN-YEAR FIX NEW

A $395-million factory in Hamilton is almost up to full production.

SOLD

Canada Bread Co. Ltd. - Mexico's Grupo Bimbo SAB pays $1.8-billion in 2014 for Maple Leaf Foods' 90-percent-owned bakery company.

Rothsay - Darling International Inc. of Texas pays $645-million in 2013 for the division that renders inedible animal parts and plant waste into biodiesel at four factories across Canada.

Olivieri Foods - The pasta and sauce division fetches $120-million from Spain's Ebro Foods in 2013.

Ontario turkey and chicken breeding operations sell for an undisclosed sum in 2013.

CLOSED

Six factories across Canada have shut in recent years, including North Battleford, Sask., Moncton, Winnipeg and Hamilton. A plant in Kitchener, Ont., is to close this week. The remaining so-called legacy plant, in Toronto, will close by the end of March.

Expanded Food processing plants in Winnipeg, Saskatoon and Brampton, Ont.

COMBINED

Seventeen distribution centres and warehouses were combined into two.

Alberta bank bars Americans from opening new accounts
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By BARRIE MCKENNA
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Wednesday, February 25, 2015 – Print Edition, Page B1


OTTAWA -- An Alberta online bank is believed to be the first Canadian financial institution to deny service to Americans, citing the burden of complying with strict new U.S. tax rules.

Canadian Direct Financial, a subsidiary of Edmonton-based Canadian Western Bank, is refusing to open new Internet accounts for U.S. citizens, even to those living in Canada.

The bank said the decision is "partly based" on the legal requirements of a U.S. law that has forced financial institutions around the world to track accounts held by Americans for U.S. tax authorities.

"The information and documentation required to open and monitor an account within [Canadian Direct Financial] for a U.S citizen or resident outside of Canada is prohibitive to providing the level of service our clients expect and deserve," explained Kirby Hill, a Canadian Western Bank vice-president and spokesman.

The policy, in place since mid-2014, does not apply to existing account holders or to "in-person" customers of the Canadian Western Bank, according to Mr. Hill.

"Certainly, costs are a factor in any business decision," Mr. Hill added.

The shunning of U.S. customers is part of the spreading fallout from the U.S. Foreign Account Tax Compliance Act (FATCA), which came into force this year.

The law is the centrepiece of a concerted U.S. effort to crack down on overseas tax evasion by identifying all offshore American account holders.

Under an agreement reached last year between the Canadian and U.S. governments, Canadian banks and other financial institutions must provide details about their U.S. account holders to the Canada Revenue Agency, which shares data with the U.S. Internal Revenue Service (IRS).

Canadian financial institutions have complained loudly about steep FATCA-related compliance costs, which can reach as high as $100-million for each of the Big Six banks.

It's also caused extreme stress for hundreds of thousands of Americans and dual Canada-U.S. citizens living in Canada, many of whom have never filed U.S. taxes. The new reporting rules mean they find it much trickier to avoid filing U.S. taxes and other required forms. Under U.S. law, Americans must file U.S. taxes every year, regardless of where they live.

A number of financial institutions in Europe and elsewhere are already balking at doing business with Americans.

But Canadian Direct Financial is believed to be a Canadian first.

Canadian Bankers Association spokeswoman Maura Drew-Lytle said she was unaware of any Canadian banks refusing to do business with Americans.

"It's discrimination based on nationality," said Kevyn Nightingale, a U.S. tax specialist at accounting firm MNP LLP in Toronto. "FATCA has put financial institutions in a conundrum."

Mr. Nightingale said the steep compliance costs simply aren't worth the effort for some midsized financial institutions.

"I'm amazed this is the first one I've seen so far," he said. "I would expect there would be more."

Some smaller institutions are exempt from the FATCA reporting rules, including not-for-profit credit unions and co-operatives, those with less than $175-million in assets and those with no accounts exceeding $50,000.

Most other institutions must report all income earned by U.S. citizens. Banks, brokers and mutual funds that don't comply risk having the IRS slap a 30-percent withholding tax on any income or gains they or their clients generate in the U.S.

Patricia Moon of Toronto, who renounced her U.S. citizenship more than two years ago, said the Alberta bank's decision not to do business with Americans "demonstrates the harm" caused by Canada's decision to share data with U.S. tax authorities.

"If all the banks started doing this, where are you going to open an account?" wondered Ms. Moon, a director of the Alliance for the Defence of Canadian Sovereignty, which is suing the Canadian government over its decision to share personal financial information with the U.S.

Canadian Western Bank (CWB) Close: $27.58, up 63¢

Miners dig deep for a bottom
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At the annual prospectors and developers conference, industry waits out an extended downturn as picky investors take stock
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By RACHELLE YOUNGLAI
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Monday, March 2, 2015 – Print Edition, Page B1


TORONTO -- As the beleaguered mining sector suffers through another year of its deepening slump, the industry's boom days are but a distant memory.

It's an ugly time for the junior mining industry, as companies descend on Toronto for the annual Prospectors and Developers Association of Canada conference. Already starved for cash, small mining companies are facing a fourth consecutive year of declining commodity prices.

Since 2011, gold is down 30 per cent. Iron ore and metallurgical coal, both used to make steel, are about 70 per cent lower. Copper is down 40 per cent and nickel is off by 50 per cent. Shares of a slew of junior mining companies have crumbled to just a few pennies apiece.

The downturn has made it much harder to entice investors.

Don Hoy, who discovered the large chromite deposit in Ontario's Ring of Fire mineral belt, said investors' attitude toward small mining companies has changed.

During the commodity boom several years ago, Mr. Hoy said "people did not want to miss the boat. They had to get involved."

But, "a lot of projects were far fetched," he said.

"Now, investors are much more sophisticated. They want to see good assets and good management," said Mr. Hoy, whose company, Wolfden Resources Corp. is down to two people, including himself.

A handful of junior miners, such as Probe Mines Ltd., have been swallowed up by much larger mining companies. Some have been forced to throw in the towel. All have done the requisite cost-cutting and are trying to get funding to continue exploring and developing their projects.

At the conference, some miners have decided to save money by not paying for a booth and instead will walk around with their projects in their briefcases.

Still, some investors say it's times like this that bargains can be found.

Long time resource investors Lukas Lundin and Rick Rule are some of those who will be hunting for mineral projects at the conference.

For Mr. Lundin, it will be his first time attending the annual conference in over a decade. Mr. Lundin, who runs a conglomerate of mining and energy companies with his brother, has managed to sell assets at sky-high prices and buy at the bottom.

Rick Rule, a long-time gold investor, has about $100-million to spend as chairman of Sprott U.S. Holdings, a unit of Sprott Asset Management.

Mr. Rule has a room at a nearby hotel and will be meeting with project owners and developers from breakfast through dinner.

And Sprott has every room at its office booked for meetings.

But although there are seemingly endless miners with a project or idea to sell, Mr. Rule said many companies are worthless. In 1999, he wrote 11 cheques at the conference. Last year, he only wrote one.

This year, "it will truly be the year of bifurcation. It will be a stock picker's year," Mr. Rule said.

At the top of the cycle, more than 1,300 mining companies were listed on the Toronto venture exchange, or exchange for junior miners. Today, there are about 1,200.

Although attendance at the mining conference is expected to be below its peak, it is still on track to pull in more than 20,000 miners, financiers, explorers and government officials from more than 100 countries.

"There are lots of discussions that we are at the lows and this is the time to go looking," said Andrew Cheatle, the executive director of PDAC and former executive with a number of small and big miners.

Associated Graphic

This year's conference is expected to draw 20,000 miners, financiers and government officials from 100 countries.

MATTHEW SHERWOOD FOR THE GLOBE AND MAIL

Geologist Raymond Bernatchez looks for specs of gold in a sample at the PDAC conference in Toronto on Sunday.

MATTHEW SHERWOOD FOR THE GLOBE AND MAIL

Quebec decries SNC charges
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By NICOLAS VAN PRAET
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Saturday, February 21, 2015 – Print Edition, Page B1


Political and business leaders in Quebec are questioning the rationale for criminal corruption charges against SNC-Lavalin Group Inc., saying the past actions of a handful of former employees shouldn't be held against the engineering giant given it has overhauled its ethics practices and senior leadership.

"I don't like what I'm seeing," said Jacques Daoust, Quebec's economy minister.

"[This is] a company that's completely changed its management, that's put in place governance standards that are remarkable, that's co-operated with the RCMP in its investigations, ending up with criminal charges against it."

The minister's remarks foreshadow a potential clash between Ottawa and Quebec over a company considered one of the province's few big multinational champions.

While the Canadian government has won plaudits in some quarters for its hardened stance against corporate corruption, Mr. Daoust said federal integrity rules go too far. A source familiar with the police investigation into the company said SNC and prosecutors were close to a settlement in October but that a deal appears to have been scuttled by the possibility that a guilty plea could automatically trigger a decade-long ban on winning Canadian government contracts. Such work represents a significant portion of the company's current revenue.

Asked Friday whether the federal rules banning companies convicted of corruption are too harsh, Mr. Daoust said the 10-year punishment "seems very long."

The future of Montreal-based SNC-Lavalin, Canada's largest engineering firm, was thrown into doubt Thursday after the RCMP laid rare corporate fraud and bribery charges against the company related to its business in Libya between 2001 and 2011.

SNC chief executive Robert Card rejected the charges, saying the company remains willing to reach a fair solution with authorities that promotes accountability while allowing it to continue to do business.

Mr. Daoust said it's the individuals who've committed the wrongdoing that should be punished, not the company. Three former SNC-Lavalin executives already face charges in relation to bribing Libyan officials, including former head of construction Riadh Ben Aissa. "Let's not destroy our companies in this process," Mr. Daoust said. "This is a flagship firm in our economy. We have few truly global companies based here and we have to conserve them at all cost."

Quebec business leaders echoed that sentiment. "I am really concerned about the impact that [this development] could have on the business environment over all and on the stakeholders related to this company," said Yves-Thomas Dorval, president of the Conseil du Patronat, which represents Quebec's largest employer associations. "I consider [SNC] a victim and not necessarily as the beneficiary."

The Federation of Quebec Chambers of Commerce said that while the actions of certain individuals in the past certainly warrant charges, they can't be allowed to harm SNC's overall business, noting the engineering giant employs 5,000 people at its Montreal headquarters alone.

"SNC has co-operating with authorities since the beginning," said federation president Françoise Bertrand. "We have to stop collectively knocking ourselves down and move to a reconstruction phase."

Quebec has spent years dealing with its own widespread corruption scandal, which ripped through its construction industry and also caught up SNC-Lavalin.

The province set up an anti-corruption police squad, enacted a public inquiry that aired years of testimony on dirty business dealings, and set up a new process where companies involved in government business must seek a stamp of ethics approval.

Quebec's securities regulator, the Autorité des marchés financiers, has credited SNC-Lavalin for putting in place new governance measures and what it calls "robust" controls to prevent corruption. SNC won its certificate last year.

SNC-Lavalin (SNC) Close: $39.28, down $1.35

How long can the Valeant bandwagon keep rolling?
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By IAN MCGUGAN
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Tuesday, February 24, 2015 – Print Edition, Page B1


If Valeant Pharmaceuticals International Inc. is addicted to deals, blame investors. They're willing enablers of the company's acquisitive habits.

On Monday, Valeant shares jumped 15 per cent following news that the Montreal-based company would purchase Salix Pharmaceuticals Inc. of Raleigh, N.C., for $158 (U.S.) a share, or $10-billion, plus the assumption of $4.5-billion in debt.

The people flooding into Valeant shares appeared delighted that the company was back doing takeovers after its failed run last year at Allergan, the maker of Botox.

But the structure of the deal - Valeant's biggest acquisition to date - underlines the persistent concerns about the company. It borrows to acquire other drug makers, then cuts deep into their research budgets and other overheads to cover the cost of the new debt and generate a profit.

The strategy is smart, but may not be sustainable in the long run.

Rather than developing new pharmaceuticals, Valeant is essentially an assembly line for deals - especially ones where it can use its exceptionally low tax rate to good advantage.

So long as the deals keep flowing, Valeant can prosper. The worry, though, is about whether it can keep on finding attractive acquisitions in a pharmaceutical industry where frantic merger activity is bidding up the cost of attractive targets.

The company answered some of its doubters on Monday by publishing fourth-quarter results that exceeded forecasts. Revenue rose to $2.28-billion, up from $2.06-billion a year earlier, while net income soared to $534-million from $125-million.

Valeant believes the Salix acquisition will boost profit by more than 20 per cent in 2016.

The North Carolina company specializes in gastrointestinal drugs, an area that is new to Valeant.

Its flagship product is Xifaxan, a medicine used to treat travellers' diarrhea and a rare brain condition. Salix is trying to win approval from the Federal Drug Administration for the use of Xifaxan as a treatment for irritable bowel syndrome.

Despite Salix's success in developing such medications, Valeant plans to chop roughly $500-million of annual costs following the takeover, which is equivalent to most of Salix's budget for research, marketing and overhead.

In addition, the deal will benefit from Valeant's tax rate of 5 per cent, which is far below the roughly 30 per cent that Salix was paying.

While analysts generally smiled on the acquisition, it leaves the balance sheet looking increasingly precarious. Following completion of a new round of borrowing, Valeant's net debt will nearly double to close to $30-billion.

That will be about 5.6 times its earnings before interest, tax, depreciation and amortization - a big jump from the current ratio of about 3.5.

The new deal also emphasizes how eager Valeant is for acquisitions. Salix was not the most appealing target at first glance after an accounting scandal last year that prompted the chief financial officer to resign.

Valeant was quick to assure investors on Monday that it had done its due diligence on Salix. It added that it would be able to wrestle its debt load back down to a more reasonable four times EBITDA by the second half of next year.

All of that sounds encouraging. Investors, though, should ask themselves if they really want to bet on a company that must find ever larger acquisitions in a pricey sector to keep its growth story alive.

One misstep and Valeant will be looking distinctly unhealthy.

ROB Insight is a premium commentary product offering rapid analysis of business and economic news, corporate strategy and policy, published throughout the business day. Visit the ROB Insight homepage for analysis available only to subscribers.

Raptors need to rediscover who they are
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By CATHAL KELLY
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Monday, March 2, 2015 – Print Edition, Page S1


TORONTO -- In early January, after their first significant dip in form, Toronto Raptors GM Masai Ujiri wandered by Kyle Lowry's locker. It was after practice. The team had just lost four in a row, but the mood was still loose.

Ujiri asked Lowry if he could trade the Raptors' first pick in the next draft.

Translation: Are we good enough right now that I can begin gambling our future?

He didn't wait for an answer. He wanted his best player to understand the question as a challenge.

It was smart psychology, and it hasn't worked.

Yet.

At the start of this season, the Raptors were the kid who doesn't realize how good he is. He's just out there having fun. They were everyone's dream eighth-grader.

The players managed to deflect most of the praise that came their way, while still absorbing some of its heat.

"You believe in us?" they'd seem to say. "Maybe, but not half as much as we believe in ourselves." Still, this was a mutual-admiration society with limited appeal. All the members lived in Canada.

As wins piled up, that began to change. There was a deluge of articles in both mainstream and cult U.S. outlets, but the tipping point was probably Charles Barkley.

At just about the same time Ujiri was challenging Lowry, Barkley was challenging the entire league during a TNT broadcast.

"If Kyle Lowry doesn't make the all-star game, I'm not going to it," Barkley said.

A lot of casual basketball fans lifted their heads.

The team became a sort of hipster password. "Oh, you like the Warriors? That's pretty obvious of you. I like the Raptors."

That wouldn't have been a problem, except that the team appeared to be listening. The club's remarkable travelling support was another (very well-intentioned) problem.

The Raptors knew they'd already won the Atlantic Division, guaranteeing themselves no worse than a fourth-place seeding in the playoffs.

They needed further incentives.

"Play hard and win games" was neither sexy nor specific enough.

Suddenly, getting Lowry into the all-star game was a primary mission. This was going to prove the team hadn't just emerged, but that they'd arrived.

Unfortunately, it worked. Since it's backfired, one hopes MLSE has finally learned the lesson that all-star games should be treated like children during cocktail hour - that is to say, ignored.

Many niggling problems have afflicted the Raptors in the intervening two months. The on-floor chain of command has broken down, along with Lowry's game.

The ball doesn't move. The decision-making has become frantic.

The best players are taking terrible shots - and missing them most of the time.

"As a group, they've never been hunted before," observed one NBA source. Compared to chasing, evading is exhausting.

Just over a week ago, they torched Atlanta. When it was over, they were very careful about boasting. This wasn't manners or sense. Rather, they looked a little worried. Perhaps because they had no idea how they'd done it.

On Saturday night, they played the worst team in the NBA, the New York Knicks. At this point, the Knicks are the inmate basketball team at a prison, and they only play the guards. It is not in their interest to win.

Toronto didn't give them any choice. They rested Lowry, who it now appears is playing through something more than the usual mid-season aches. Riding a new, exciting talent recently emerged from Italy - Andrea Bargnani - New York came out and fell on top of Toronto, then lay there until the Raptors suffocated.

This 103-98 loss wasn't about basketball. This was psychological. This was a team that has itself so turned around, it needs to put its clothes on backwards.

"Nobody said this was going to be easy," Greivis Vasquez told reporters afterward.

Sure, they did. Everyone said that.

It isn't the play sets, or offence, or effort, per se. Confidence is part of it, but the Raptors' main problem is existential. At the beginning of the season, this team knew who it was - an outsider with a puncher's chance.

Now, it has no idea.

The erratic, up-and-down performances started the moment the Raptors began to consider everyone else's notion that they might be a dark-horse championship contender.

They aren't. They aren't even close. They're two or three players away. A point of order - 20 NBA teams are two or three players away from a title.

What the Raptors need now is to rediscover who they are. If America is the native country of basketball, Toronto is its Island of Misfit Toys.

There isn't a player on this roster that hasn't, at some point in his career, been an afterthought.

Most have had their skills or character or basic make-up loudly doubted by their employers. A few have just been ignored. Most have been effectively fired.

It's a patchwork crew of guys who at some point were weighed and judged and found to be second-rate. But it all works together.

Ujiri and Lowry were both right. The Raptors time is now.

The question is "Time for what?" This team is a long way from reaching its peak. It is several moves and several players from that goal. I'll say this right now: I don't think this roster will be recognizable in two years' time. I believe it'll be turned over entirely.

The players should think about that as well. This is a chance. Like all chances, it's a limited-time offer.

What they are right now is fun and dangerous. There are no expectations. One playoff-round win - that would be a successful season. Everything else is cherries.

In the end, losing may help them get back to that proper headspace. It reminds them of their place in the world, what people really think of them, and who their real fans are.

Follow me on Twitter:@cathalkelly

Keeping the tank quiet is hurting all integrity
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By CATHAL KELLY
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Tuesday, March 3, 2015 – Print Edition, Page S1


TORONTO -- March 2, 2015, was the Day the Tank Went Too Far.

This whole hockey season has been narratively constructed around a race to the bottom. It's likely more casual fans know who's sitting last in the NHL standings (Buffalo) than first (Nashville).

For a while, this was sort of fun. It warms the heart to watch millionaires in despair. It reassures us that while the world isn't just, it is at least equally cruel.

The corrupting core of the tank is the unspoken pact at its heart. Players will not play poorly on purpose. Management can't ask them to do so.

Instead, the club slowly denudes its team of talent, forcing those who remain to confront their essential natures - as the sorts of players you can trust to be terrible at hockey. It's a virtuous cycle of viciousness.

This involves a certain amount of proportion. You could "accidentally" sign a chimpanzee. Or "forget" everyone's skates on the plane, and ask them to play in flip-flops. But you don't. Because that would embarrass the craft.

The tanking Sabres did essentially that late on trade deadline Monday, when they dealt human-flotation-device Michal Neuvirth for New York Islander Chad Johnson.

Neuvirth and Johnson are both goalies. Sort of.

Playing for the worst team in the NHL, Neuvirth has a .918 save percentage. Playing for one of the league's top five teams, Johnson has an .889 save percentage. If you were to stand completely still in the crease for the entire game while wearing a blindfold, you'd probably hover around .875.

He's played well recently, but that's over now. For tanking purposes, Johnson is denser than a collapsed sun.

This is just too bold, and it didn't raise an eyebrow. In fact, most people seemed delighted by Buffalo's cheek. It was the naughty child whom nobody can find the courage to reprimand.

The Neuvirth trade (the second time this year Buffalo has dealt its starting goalie) is proof every league in the world needs a relegation system to keep it honest.

And while we usually land somewhere between laughing at and encouraging the tank, that's its essential problem - honesty.

It turns everyone it touches into a liar.

On Monday's TSN broadcast, former Leafs coach and analystfor-a-day Ron Wilson recalled the time he was asked by an unnamed (but pretty easy to figure out) general manager to sabotage his own team. Wilson's chances of getting another head coaching job were thin in the morning. After that lapse of reason, they're non-existent.

The tank is the NHL's Fight Club. You don't talk about the tank.

I know one big-league executive who can't bring himself to call things by their real names.

Instead of "tank," he refers to "the T-word."

This doesn't change the reality, but it does reduce decent men to shifty dissimulators and habitual public benders of truth.

You can't blame the teams. It's not their job to protect the integrity of hockey. It's their job to sell tickets and win, in that order. Whatever they have to do to manage that - within or just slightly outside the rules - is fair play.

But the NHL should be worried. The game's honest reputation is their business, quite literally. If hockey starts looking crooked, there are plenty of other prime-time viewing options.

From the league's perspective, the tank is deceiving. It sounds popular. It's wonderful fodder for columns (META!). It's good on talk radio. The quants and wonks in the fan base love discussing the permutations - and they tend to be the game's most effective cheerleaders.

The tank is designed to be talked about. What it is not designed to do is be watched on television for three hours at a time, when you could be sitting inside a closet drinking gin from a shoe instead.

The tank is terrible for that vast, silent majority of hockey fans who don't spend four hours a day tweaking their fantasy teams. They just want to lay down on the couch, turn on a game and be entertained.

That sort of fan doesn't want to hear about five years from now. They don't want to pay to watch Chad Johnson swiping at the puck as if it's a beach ball.

They want to maintain the illusion that, with a little luck, anything's possible. The NHL abandons that fan at its peril.

It's not hard to imagine a failed 10-year tank slowly morphing into permanent disillusion and eventual system failure. The tank is a nuclear option, but it's being used across the league as if it's a cherry bomb.

It's not Connor McDavid's fault. We're facing the same problem next year, as everyone goes nose down trying to get to 17-year-old American forward Auston Matthews. It's going to go on like that forever. There's always going to be one guy everyone covets.

The NHL is slowly moving to correct the problem. This year, the last-place team can pick no worse than second overall. In 2016, separate lotteries will determine spots one through three. The NHL's worst team may end up falling to the fourth pick.

It's a good start, but it doesn't go far enough. Make the top eight picks a series of rolling lotteries. Scare everyone straight.

It won't change the finished product. What it will do is reward the teams capable of mining a draft past the first two or three picks, rather than let them lean on the dull logic of the tank.

It's a simple choice - continue to treat a lot of fans as if they're stupid, or force teams to get smarter.

Follow me on Twitter: @cathalkelly

Sloan conference leading Big Data revolution in sports
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By JAMES MIRTLE
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Friday, February 27, 2015 – Print Edition, Page S1


BOSTON -- jmirtle@globeandmail.com

When it launched in 2007, MIT's sports analytics conference was little more than a curiosity.

Hastily arranged and held in a series of available classrooms in the dead of winter, the 175 attendees were primarily students anxious to hear from Daryl Morey, the MIT grad who had been teaching a popular sports analytics course when he was hired as general manager of the Houston Rockets.

What came next was unexpected.

Year by year, the gathering became bigger and bigger, evolving into nothing short of a cultural phenomenon, one that trends on Twitter and draws in some of the biggest personalities in sports.

On Friday, the ninth annual Sloan Sports Analytics Conference opens in Boston with three commissioners set to speak, more than 100 teams in attendance - including half of the NHL - and 3,100 people paying $500 each to watch it all unfold.

Roughly 2,000 more remain on the waiting list.

The event famously dubbed "Dorkapalooza" by ESPN's Bill Simmons years ago has gone mainstream, becoming a mecca for those both sporty and statistically inclined.

Morey, who remains one of Sloan's leading voices, has a simple explanation why.

"The reason for [our] growth is simple," he said on Thursday.

"Analytics helps you make better decisions, which helps you win."

Morey's involvement has meant Sloan has traditionally been basketball-heavy, and once again, every NBA team is expected to have a representative.

But the conference has also branched out, and an increased focus this year will be on soccer and hockey, with the latter featuring a panel that includes Toronto Maple Leafs assistant GM Kyle Dubas and former Edmonton Oilers coach Dallas Eakins.

More than just a collection of eggheads, Sloan also now attracts athletes themselves, part of a new generation raised in the information age that views analytics as simply another way to gain an edge.

Carolina Hurricanes analyst Eric Tulsky's paper at Sloan last year on zone entries, for example, was read online by several NHL players, including Minnesota Wild star Zach Parise.

"The athletes are different," explained Jessica Gelman, vice-president of marketing and strategy for the Kraft Sports Group - owner of the New England Patriots - who co-founded the conference with Morey and serves as its chair.

"They're using data very differently. [Former NBA player] Shane Battier, this will be his first year coming to the conference, but he got it. He was using data to improve and think about what to do on the court. This younger generation of athletes, these millennials, they understand and see what's happening in society and think: 'How can I take advantage of this?' " Battier will be one of the stars this year, especially after releasing a YouTube video earlier in the week explaining how he used increasingly advanced statistics during his career to shut down Los Angeles Lakers superstar Kobe Bryant.

Battier learned his weaknesses - according to the numbers - and responded appropriately on the court.

"I was lucky to grow up in the golden age of analytics in basketball," he said, crediting his knowledge of data with keeping him in the league so long. "The emergence of Big Data in sports."

He will be part of Sloan's "Innovators and Adopters" panel on Friday morning, a powerhouse group that features both Morey and Moneyball author Michael Lewis.

The conference will then close out on Saturday with another pairing of heavy hitters: Calgary Flames executive Brian Burke - a noted skeptic - will be paired with numbers guru Nate Silver on a panel ambiguously titled "The Future of the Game."

The panels are often where Sloan's headlines come from, but it also features hard-core number crunching, with in-depth research papers - i.e. "Applying Catapult Data in Hockey to Reduce Injuries and Improve Performance" - and competitions driving innovation every year.

Many leagues and teams now view Sloan as the perfect job fair, where they have access to the brightest sports-oriented minds in the world.

Students from more than 200 academic institutions - from as far away as Australia - will attend this year, including competing presentations from the business schools of Harvard, Dartmouth and the University of Pennsylvania.

The data revolution that has long since transformed banking, finance and other complex industries is well on its way to doing the same in sports. Big Data has led to big money, and professional sports court some of the biggest money there is in the ownership ranks.

Sloan has been a part of that - and is now helping lead the way.

"Like MIT, sports now live in a very hypothesis-driven environment," MIT grad and Oakland Athletics director of baseball operations Farhan Zaidi said in a recent blog on the conference.

"You need to ask the right questions, accumulate the right data and implement a strategy based on that data."

"The whole rise of data isn't just specific to sports," Gelman added. "It's happening across so many different industries, looking at what Google has done and what Amazon is doing. But [sports] are something people can relate to and understand.

"You now have a different type of person who is involved in running the teams and running the leagues, and they are more analytically oriented. That's been an explosion in the last 10 to 15 years, if you look at the owners of the teams - and even who the commissioners are - and their interests."

Saturday, February 28, 2015

Correction

A Friday Sports story on sports data incorrectly said Farhan Zaidi is with the Oakland Athletics. He was recently named general manager of the L.A. Dodgers.

Jays welcome durable Donaldson's level-headed approach to the game
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New third baseman arrives early, then shows off some of the pop that earned him a reputation as one of the game's most feared sluggers. Robert MacLeod writes from Dunedin, Fla.
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By ROBERT MACLEOD
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Wednesday, February 25, 2015 – Print Edition, Page S1


Josh Donaldson wasn't expecting a tickertape parade back in 2010 when he stroked his first Major League Baseball home run for the Oakland A's.

Donaldson, playing in just his second big-league game after getting summoned from the minors, hit the two-run shot in the top of the fourth inning against the Toronto Blue Jays, and it helped secure Oakland's 4-3 victory at Rogers Centre.

But after the game, when he got back to the clubhouse, the rookie did anticipate at the very least a pat on the back, maybe a tousling of his hair by one of the veterans, in recognition of a job well done.

Instead, Donaldson got the silent treatment.

"When I came into the clubhouse ... everybody was just kind of like, okay, whatever," Donaldson said. "They were just about themselves."

The 29-year-old is now a member of the Blue Jays, their new blue-chip third baseman who was obtained in an unexpected four-for-one trade with the A's in November. Brett Lawrie, used at both third and second base by the Jays, was the key player who went the other way.

Here is the main difference between Lawrie and Donaldson. Donaldson has averaged 158 gamesplayed the last two seasons; the oft-injured Lawrie averaged 88.5.

Donaldson is proud of his durability. "In baseball, I think that's your sixth tool," he said. "Everybody talks about having five tools. I think the sixth tool is being able to stay on the field, because if you're not able to stay on the field, you're not able to benefit your club.

"So for me and Brett Lawrie, I played against him in the minor leagues, I played against him in the big leagues. Definitely a very good baseball player who I think over time will kind of figure that out, how to stay on the field."

Although the first official workout for position players at the Blue Jays spring training camp is not until Friday, Donaldson is here early to try to get the feel of his new club.

He worked out at the Bobby Mattick Training Center and, during batting practice, displayed some of the wallop that has helped make him one of the game's more feared sluggers over the last two seasons.

In the last two years, Donaldson has hit .277, averaging 96 runs batted in and 26 home runs.

"We're fantasizing about putting him in there with Eddie [Encarnacion] and [Jose] Bautista and those guys," manager John Gibbons said of his lineup. "It makes us that much better."

Now entering what will be just his third full season at the majorleague level, Donaldson, 29, brings a level-headed approach to a game often dominated by mefirst types.

He said that winning teams don't subject fellow teammates to the cold-shoulder treatment he got after he hit his first home run.

And he got a completely different sense of team chemistry in 2012, when he was making the transition from catcher to third baseman with the A's: Veteran Jonny Gomes, now with the Atlanta Braves, took a mentorship role with Donaldson.

"The guy is a winner," Donaldson said of Gomes, "and he really took me under his wing and kind of showed me how winners play the game, the attitude that they bring. These guys don't change."

Donaldson said even when you go 0-4 with four "punchouts," there are still things a player can do to help the team try to win. Tell the next batter that it was a slider you struck out on and to be ready for it, he said.

"It's just really focusing it more on your teammates than yourself, because if you get caught up in numbers and stuff like that, you're going to drive yourself crazy," he said.

It took dogged pursuit by general manager Alex Anthopoulos for the Blue Jays to land Donaldson.

Anthopoulos said he had already called Oakland GM Billy Beane on two occasions last season inquiring specifically about the thirdbaseman's availability.

Anthopoulos said it was his plan to have Donaldson play third for the Blue Jays, and move Lawrie to second base full time. But Beane was adamant that he was not parting with Donaldson. But when Anthopoulos made a third call in mid-November, again inquiring about Donaldson, but this time dangling Lawrie as trade bait, Beane went for the deal and it was announced a week later.

"We weren't looking to trade Brett Lawrie, but it wasn't getting anywhere with trying to get Donaldson," Anthopoulos said. "Once I introduced Lawrie to fill that hole for him [at third], then he seemed a little bit more openminded and we took it from there."

NAVARRO REPEATS TRADE REQUEST AS MARTIN SETTLES IN
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Last season's starting catcher arrives at spring training with a positive attitude but expresses frustration that the Blue Jays haven't traded him to a team where he can play every day, Robert MacLeod reports
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By ROBERT MACLEOD
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Tuesday, February 24, 2015 – Print Edition, Page S1


Dioner Navarro began the first day of spring training for the Toronto Blue Jays looking like a player without a care in the world.

In the cutthroat business of Major League Baseball, looks can be deceiving.

As the sun started to burn through the morning fog that enveloped this coastal city on Monday, Navarro and the other catchers trudged into the bullpen here at the Bobby Mattick Training Center to begin their work with the pitchers.

Navarro set up at one end of the 'pen, getting ready to catch Mark Buehrle, who was toeing the rubber 60-feet, six inches away.

The Toronto starter went into his windup and delivered his first pitch, and it was nasty stuff indeed. It was a battered rosin bag, and not a baseball, that Buehrle threw, and it exploded in a cloud of white dust when it struck the ground near Navarro.

Navarro appeared unfazed by his teammate's attempt at levity. His response was to pick up a baseball and fire it low back to Buehrle, forcing him to do a little hop as the ball skipped between his legs.

It was boys-being-boys stuff, to be sure.

But Navarro's lighthearted mood had evaporated by the time he met with reporters and stated in no uncertain terms that he wanted the American League team to trade him.

"I was kind of frustrated throughout the whole off-season - I was a little disappointed that nothing has happened yet," Navarro said. "It's just a suck position to be in. I just want to play, I just want to keep improving and showing that I'm capable of doing this on a daily basis."

Navarro was speaking from the heart, not out of any apparent malice to his employee.

He said he is at camp with the proper attitude and willing to do what the team wants. For the time being, at least.

But the 11-year player admitted to being dismayed when, coming off his best offensive season as Toronto's 2014 starting catcher, the Blue Jays went out and signed all-star free agent Russell Martin to take his job.

And all it took to lure Martin to Canada was a five-year pact worth $82-million (U.S.). This season, Navarro will earn $5-million in the final season of a twoyear deal.

"I think I put myself in a really good position last year, and I expressed throughout the whole year last year how grateful I was with the Blue Jays for giving me the opportunity," said Navarro, who hit .274 with 12 homers in 2014. "And I don't know where, or if, anything did go wrong. I'm a pro, I'm going to do my job, I'm going to be ready for whatever and see what happens."

The Blue Jays have said all along that they did not enter the off-season with the intention of finding a substitute for Navarro.

But when Toronto general manager Alex Anthopoulos discovered he had a chance at signing Martin off the free-agent market, it was an opportunity he could not pass up to upgrade his roster.

Manager John Gibbons said that he would be surprised if Navarro felt any other way about his predicament.

"I can't blame him for not being happy," Gibbons said. "He's a competitor, he's a big-league player - a good one. But we made the decision, we thought bringing Russell in is going to give us a big, big boost."

Gibbons said there is room on the roster for Navarro as a backup or as the designated hitter.

Martin said he has known Navarro since 2006, when they were teammates on the Los Angeles Dodgers. He agreed that it is a tough situation.

"I'm sure that if he could be in a gig where he'd catch every day, I'm sure he'd prefer that," Martin said. "But that's something that's out of his control now. One thing he can control is his attitude, and so far it's been fantastic. And it hasn't made me feel weird at all."

The Blue Jays have said they plan to give Martin every opportunity at spring training to see if he can handle R.A. Dickey and his knuckleball. So it was surprising to see Martin lining up to catch Daniel Norris in the first bullpen, with Josh Thole in his regular spot behind the plate to handle Dickey.

Associated Graphic

Toronto Blue Jays catcher Russell Martin, centre left, finishes up a bullpen session with his teammates, including Dioner Navarro, centre right, during spring training in Dunedin, Fla., on Monday.

NATHAN DENETTE/THE CANADIAN PRESS

Jays get chilly reception as spring training begins
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By ROBERT MACLEOD
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Friday, February 20, 2015 – Print Edition, Page S1


DUNEDIN, FLA. -- The boys of summer started gathering this week in this sleepy enclave off the Gulf of Mexico, and many harboured thoughts of a leisurely game of catch or shagging fly balls in the warm Florida sunshine.

Spring training for major league baseball players is an annual pastime. Millionaire athletes frolic outdoors in lovely weather, reminding the rest of us that summer is not as far off as it seems.

It was, however, a rude awakening for those members of the Toronto Blue Jays who arrived here on Thursday for an informal workout in weather more suited to woollen tuques and overcoats than shorts and T-shirts.

The temperature hovered around a un-Floridalike 7 C, but a stiff, unforgiving breeze made it feel much cooler. Forecasters warned that temperatures could dip to below freezing overnight, though conditions would start to warm up over the weekend.

"Man, it's a lot nicer in here," proclaimed Michael Saunders, the new Toronto left fielder, after seeking refuge within the heated sanctuary of the Blue Jays clubhouse following the workout at Florida Auto Exchange Stadium.

It was hard to feel much sympathy for a player who opted to wear a pair of shorts for the workout, weather be damned.

For winter-hardened Canadians who have come to grips with bone-chilling temperatures and heavy snowfall, the current conditions in Florida would be considered a lark.

But not here in the Sunshine State, where one local newspaper referred to the dipping mercury as "The Big Chill." The website of a Tampa TV station featured a weather story that warned people of the risks of hypothermia.

Still, the game has to go on - including for the Blue Jays who continued to arrive in Dunedin in dribs and drabs on Thursday - even though pitchers and catchers are not mandated to be here until Sunday, when physicals will take place.

Position players are not required to be in town until the following Thursday, making the Blue Jays one of the last teams to get going in both the Cactus League in Arizona and the Grapefruit League in Florida.

Another 13 clubs officially got rolling on Thursday, five of them in Florida, including the Baltimore Orioles in Sarasota, the Detroit Tigers in Lakeland and the Washington Nationals in Viera.

Apart from Saunders, a Canadian from Victoria, who was obtained from the Seattle Mariners in an off-season trade, most of Toronto's starting position players have yet to arrive.

That would include the likes of Jose Bautista, Jose Reyes and Russell Martin.

"Start of a new season, everybody's in first place and everyone's got one goal on their mind," Saunders said, explaining his itch to get going early. "For me, this is obviously a very exciting time. When I got traded I couldn't have picked a better team to get traded to. I grew up watching the Jays so I feel honoured to be able to put on that uniform.

"It's about being a kid and playing a kid's game. As long as you love what you do you'll never work a day in your life."

Upon their arrival on Thursday, many of the Blue Jays lugged bulging duffel bags into the clubhouse to set up shop for the next six weeks or so in preparation for the 2015 regular season.

The Toronto clubhouse contains about 70 stalls and on each chair rested a large, plastic bag containing a clear plastic cup and a skinny glass tube for the various samples they must produce during their coming physicals.

After changing quickly, the players headed outside for a brief workout that included batting practice.

Most of the players, in deference to the cold, wore layers of clothing from the top down, including skin-hugging tights to cover their legs.

The most noticeable pair belonged to Chris Colabello, a first baseman/outfielder who was claimed by Toronto off the Minnesota Twins in December and is a long shot to make the bigleague roster.

Colabello's tights were a dazzling yellow that certainly made him a standout in the fashion sense.

Team trainer George Poulos was spotted walking around the field wearing a catcher's mitt, presumably to keep one of his hands warm.

Kane, and the Blackhawks, take a turn for the worse
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By ERIC DUHATSCHEK
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Thursday, February 26, 2015 – Print Edition, Page S1


eduhatschek@globeandmail.com

An ill wind blew through the Chicago sports landscape Tuesday night, chilling the championship hopes of both the Blackhawks and the Bulls and proving again that you can build a contender as meticulously as possible only to have one freak accident change everything.

To recap: The Blackhawks' Patrick Kane, who was tied for the NHL scoring lead, lost his footing when cross-checked into the boards by Florida Panthers defenceman Alex Petrovic in the first period of what ended as a 3-2 Blackhawks shootout victory.

Kane left the ice favouring his left arm and shoulder and underwent surgery Wednesday for a broken clavicle.

His doctors say he will be out for 12 weeks, which means he won't be available until the third round of the playoffs.

On the same day, the Bulls announced that point guard Derrick Rose will undergo surgery on his right knee for the second consecutive season and would be out indefinitely.

Some wonder if Rose will ever regain the form that made him the most valuable player of the 2011 playoffs.

Chicago has been blessed in recent years by hockey and basketball renaissances - the Blackhawks winning the Cup twice since 2010, and the Bulls recovering from the fallow period that characterized the postMichael Jordan era.

But these surges can be fragile and so dependent on the health of their linchpin players.

The Blackhawks were without both Kane and captain Jonathan Toews down the stretch last year as well, but managed to win enough games to earn the third seed in the Central Division.

Both players came back in time for the playoffs. Both were rusty early as the Blackhawks fell behind 2-0 to the St. Louis Blues in the opening round.

But both eventually got it going and were humming along on all cylinders by the third round, when they played a classic Western Conference final series, decided by a deflection in overtime of the seventh game, against the eventual champion Los Angeles Kings.

Kane was placed on long-term injured reserve Wednesday. The move frees up salary-cap space for general manager Stan Bowman, if the Blackhawks want to make a deal, but 27-goal, 37assist players generally aren't available at the NHL trade deadline, set for next Monday.

Kane was bidding to becoming the first United States-born winner of the Art Ross Trophy as the NHL's scoring leader.

That won't happen now.

At 26, he was in the midst of his most dynamic season, an MVP candidate who drove the Blackhawks offensively with his puck-possession skills and the way he backed off defencemen with his moves.

Generally, coach Joel Quenneville played Kane and Toews on different scoring lines but together on the power play, forcing opponents to adjust their checking schemes when they played the Blackhawks at even strength. Which defence pair gets to shadow Toews, and which draws the assignment of playing against Kane? That luxury - of deploying two world-class players on separate lines - is gone now and lessens the offensive threat level in Chicago by a considerable margin. Rookie Teuvo Teravainen is up from the minors as Kane's replacement, and while he has some offensive gifts, they are not comparable to Kane's at this early stage in his career.

Petrovic's cross-check on Kane earned a minor penalty but no supplementary discipline from the NHL. While it was a dangerous play - Kane was chasing down a puck in the corner about two feet from the boards and thus wasn't able to protect himself when Petrovic knocked him off balance - it was an altogether common play, too. The only difference between what Petrovic did and a hundred other similar infractions was that Kane didn't get up right away. When he finally did, it was clear something was wrong - for him and for the Blackhawks' championship aspirations, which have taken a decided turn for the worse.

Follow me on Twitter: @eduhatschek

THE FITNESS ECONOMY
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By DAWN CALLEJA
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Friday, February 27, 2015 – Print Edition, Page P22


So you're still carrying around the 10 pounds you resolved to shed on Jan. 1. Don't feel bad: More than 90% of people who try fail utterly to actually lose weight. But that doesn't mean there aren't healthy profits for companies that are willing to help you try.

7.7 million pounds

That's how much fat the clients of Weight Watchers Canada have lost in the past three years. But the queen of the $369-million Canadian weight-loss industry is struggling to maintain its hold on dieters, thanks to the recent glut of free mobile fitness and nutrition apps. Weight Watchers' stock price is almost half what it was in December, and its Q3 results were down 14% from last year, to $345 million. To be fair, former spokeswoman and lifetime member Jessica Simpson does look fabulous.

$26 BILLION

The projected market for mobile health and fitness apps by the end of 2017, up from $4 billion now.

Apple is hoping to dominate with its HealthKit, launched late last year. The app tracks your personal fitness and medical data, and synchs with other apps like the popular MyFitnessPal.

TWICE A WEEK

The number of times the average American gym member actually visited the gym in 2013, according to the International Health, Racquet & Sportsclub Association.

Worldwide, the number of gyms has skyrocketed, from 12,000 in 1993 to 32,150 today; the health club industry generates $78 billion (U.S.) in revenue--$22 billion of that in the U.S., where the average monthly dues are $50.

200%

The expected jump in sales of fitness trackers like the Fitbit Charge in the next three years-- from 19 million in 2014 to 57 million in 2018.

$100 million

The annual revenue (as of 2013) of CrossFit, the gruelling strength-training regimen beloved by elite athletes and special-forces types. Some of that comes from reebok, which markets CrossFit gear and sponsors the annual CrossFit games, which air on eSpn. But most of the money comes from licensing fees from 10,000 "boxes" around the world, and $1,000 seminars that teach wannabe CrossFit trainers the sport's nine fundamental moves.

Associated Graphic

PHOTOGRAPH (SIMPSON) ERIC CHARBONNEAU/REX

Saturday, February 28, 2015

Contents
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Friday, February 27, 2015 – Print Edition, Page P3


Features

40 Mojo Man

What do Rexall, Old Navy and Sobeys have in common? They all hired Canadian retail savant and Loblaw alum Joe Jackman to rethink their offering to shoppers. /By Marina Strauss

48 Perils of the caribbean

There's trouble in paradise. An ugly economic downturn is sweeping through the region--and buffeting three of Canada's Big Banks. /By Tim Kiladze

54 the deep

It will be 400,000 years before Canada's 48,000 tonnes of nuclear fuel waste is considered safe. So why are so many small municipalities striving to bury it in their backyard? /By Charles Wilkins For video, photos and more on this story, visit tgam.ca/r

64 top 100 brands

Our third annual ranking of Canada's most valuable corporate names includes some spectacular rises--and some equally stunning crap-outs. /By Steve Brearton

54 Nuclear fuel waste from reactors across Ontario awaits burial--but where?

Departments

6 Letters

13 the Interview Vint Cerf invented the Internet four decades ago. Find out where he thinks technology is headed next

18 March Madness We track the 20 most valuable college basketball teams to see if there's a correlation to championship wins

20 Disruption So long, privately owned cars. Hello, self-driving taxis

24 crime

Crime rates in Canada have fallen drastically, yet police budgets continue to climb

26 Venture

After Enron's accounting scandals, Vancouver's Global Relay found itself in a regulatory sweet spot

30 Made in canada

The manufacturing arm of Lee Valley Tools elevates the utilitarian to a higher plane

32 corporate Governess

Should your company ditch the dreaded annual performance review? And parents, get thee to a daycare!

34 Investing

Making money in the markets is a 40-year journey, not a oneyear sprint

36 Reguly

Europe's rich are about to get a whole lot richer--and the poor are about to get a whole lot more furious

72 exit Interview

Mark Cohon was there the day his dad introduced the Big Mac to Moscow, and what he learned helped him revive the Canadian Football League

30 Lee Valley's manufacturing plant in Ottawa employs 160 people

Associated Graphic

PHOTOGRAPH PHILIP CHEUNG

PHOTOGRAPH BRENDAN BURDEN

As CS300 nears first flight, Bombardier faces upward climb
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By NICOLAS VAN PRAET, GREG KEENAN
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Thursday, February 26, 2015 – Print Edition, Page B1


MONTREAL, TORONTO -- Bombardier Inc. is banking on the C Series to carry aerospace revenue over the next two decades as its CRJ regional jets fade into history. But even as the larger - and more popular - version of the plane is about to make its maiden flight, major hurdles remain in the company's path.

Two years late to market and about $2-billion (U.S.) over its initial $3.4-billion budget estimate, the C Series program is set to receive a much-needed boost this week as Bombardier prepares to send its CS300 aircraft into the sky.

Company officials are also expected to give a sense of how the smaller CS100 is performing in its own airborne and ground testing - crucial data as Bombardier's sales team works to win more orders ahead of a planned commercial launch later this year.

Still, it remains an upward climb for the world's third-largest aerospace manufacturer. Convincing customers to buy a jet that may or may not be delivered in 2015 while much bigger rivals are aggressively peddling their wares is a challenge - especially when Bombardier's finances are also under pressure.

9 "The plane is an engineering marvel; It really is a very well-engineered airplane," said Addison Schonland of U.S.-based commercial aviation consultancy AirInsight. "The difficulty has been Bombardier's resource constraints. It's the capital and the people - getting the job done, that's slowed them down."

The company has taken steps to address its cash issue, announcing earlier this month it would sell $750-million (Canadian) in shares, raise $1.5-billion (U.S.) in long-term debt and suspend its dividend to help pay for $2-billion in aerospace capital expenditures this year. Initial doubts that it could raise the equity were put to rest as the stock order book swelled to roughly twice the size of the deal. The company later increased the offering 25 per cent to $938-million (Canadian).

Bombardier is counting on the C Series to almost double its yearly revenue near the end of the decade, projecting it will tally up to $8-billion (U.S.) in sales annually as the company cranks out 120 planes a year during initial production.

The entire business case of the aircraft rests on the premise that people want more direct routes between cities without having to travel through hubs. Bombardier believes that airlines will be willing to buy a plane offering between 100 and 150 seats to accomplish that, as long as the new jet can deliver a promised 15 per cent savings on operating costs and 20 per cent on fuel burn.

The company is making two models - the smaller CS100 with up to 125 seats and the larger CS300 with up to 160. Bombardier has predicted that demand for jets seating 100 to 149 people will hit as many as 7,100 units over the next 20 years and that the company could win half those sales.

But the program has problems.

Chief among them, say critics, is the order book.

Bombardier has tallied 243 firm orders for C Series models so far - the equivalent of about two years of production. It has said it wants about 300 by the time the CS100 enters commercial service.

Why the Canadian plane maker hasn't attracted more orders or boosted its sales target, amid two years of delays, is a matter of debate. The company has said part of the issue is timing, that potential clients look at the current order book and delivery schedule and "feel it puts them far in time" before they could take possession of any jets.

Others point to different explanations.

AirInsight says pricing has been a tricky matter for Bombardier.

While giants Airbus and Boeing can use their scale and multiyear backlogs to offer steep discounts to potential customers, luring them into slightly bigger planes such as the A320, Bombardier can't. "[They] cannot win a price war," AirInsight says.

Bombardier customers have also been bewildered by recent events at the company, says aviation consultancy Leeham Co.

That, in turn, has undermined their confidence.

Several key Bombardier aerospace sales executives have left the company in recent months for personal and other reasons, including sales chief Ray Jones.

The management changes have extended all the way to the chief executive suite, with Pierre Beaudoin handing the reins to outsider and aersopace veteran Alain Bellemare earlier this month.

Meanwhile, several announced C Series sales are thought to be on the bubble, including the largest single order, which is from U.S. carrier Republic Airways.

Other sales being questioned include those of Russia-based buyers Ilyushin Finance and VIM Airlines as the Russian economy deteriorates under the weight of the oil price collapse and sanctions.

In the near term, Bombardier's challenge is to hold on to current customers and show potential new ones that its two C Series models can deliver the operating advantages that were promised.

All within an environment of tight liquidity and ballooning debt.

"Certifying an airplane is complex," said one former senior Bombardier executive. "Certifying an airplane with budget constraints is even harder."

The value equation remains intact for the C Series, the executive said. And there are many markets where the 180 seats offered by Boeing and Airbus aircraft are just too many.

The source noted that better airplanes ultimately prevail in the market, pointing to how the McDonnell Douglas MD 80 supplanted the Boeing 727 by offering two engines compared with three and a reduction in pilots to two from three.

"At the end of the day, the C Series will be for probably 10 or 20 years the best in class, twinengine single-aisle with less than 160 seats. It just has to get there and that really is the deal isn't it?

It just has to get there."

Bombardier (BBD) Close: $2.60, up 10¢

Associated Graphic

JOHN SOPINSKI/THE GLOBE AND MAIL SOURCES: BOMBARDIER; GRAPHIC NEWS (PLANE BASE); ASCEND; LEEHAM CO.

In Japan, the two-tiered nature of a fragile recovery
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By IAIN MARLOW
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Saturday, February 28, 2015 – Print Edition, Page B1


TOKYO -- As he strolls through Tokyo's gleaming financial district, Satoaki Nishimura has good reasons to feel optimistic about the world's third-largest economy. He says sales are up at the big insurance company he works for, Japanese stocks are soaring and the economy seems to be doing better for the first time in decades under Prime Minister Shinzo Abe's so-called "Abenomics" growth strategy.

"Abenomics is working," says Mr. Nishimura, who adds that insurance is the first thing people tend to cut when times are tough, and generally the last thing they buy when things start to improve - an indication that Japan is well on its way again.

But although many people such as Mr. Nishimura in central Tokyo are benefiting from this tentative rise in growth, new data released Friday reinforced the brittle, two-tiered nature of Japan's gradual economic recovery. Japan's industrial output rose 4 per cent in January, the highest jump in nearly four years, driven by Japanese exporters who have benefited from the U.S. economic recovery as well as Mr. Abe's deliberate weakening of the yen, which has fallen 8.5 per cent against the U.S. dollar.

At the same time, retail sales fell 1.3 per cent and household spending dropped a dramatic 5.1 per cent - the tenth consecutive month of declines, the result of inflation arriving without a corresponding rise in wages. Inflation, which the Bank of Japan hopes to push up to 2 per cent by printing reams of money, pushed consumer prices up 2.2 per cent. But the central bank's main inflation figure - which excludes the effect of a sales-tax increase - fell back to 0.2 per cent, far below target, largely because of plunging oil prices at a time when Japan's nuclear reactors are all shut down.

Mr. Abe has been desperately trying to reverse the two decades of deflation and weak economic growth that followed the burst of the country's bubblefuelled economy in 1990. His administration launched unprecedented fiscal stimulus and embarked on an ambitious - and polarizing - implementation of radical structural reforms, which are targeting everything from corporate governance to agriculture.

Although far from universally acclaimed, many mainstream observers believe Mr. Abe's policies - or at least his determined focus on implementation in a stabilized political environment - are having a meaningful impact on Japan's economy.

"Since Mr. Abe took power, we've seen concrete results from Abenomics, and we also see the results in these numbers," says Kiyoshi Tanigawa, who is in charge of formulating growth strategies at the powerful Japan Business Federation, or Keidanren, which represents more than 1,300 Japanese companies, including some of its largest.

"Of course, there are some weaknesses in consumption that we see in Japan," Mr. Tanigawa added. "But we think we need to push forward with reforms."

Because of Mr. Abe's efforts, corporate profits are rising and the Tokyo Stock Price Index has surged 51 per cent since the Bank of Japan began its monetary easing in 2013. But stocks are not widely held in Japan, where many have their investments in government bonds. And many ordinary citizens have been left embittered by policies they think benefit only a select few. They are also fearful of many of Mr. Abe's attempts to radically reorganize a society that will likely see the retirement age pushed back to 65 and social services cut in order to deal with the government's massive debt - which is now 250 per cent of GDP.

Many economists think Mr. Abe's efforts are necessary to end deflation and deal with the huge demographic challenges of Japan's rapidly aging - and shrinking - population. But for many, the changes have come without any benefit, and have discouraged many from spending the way Mr. Abe wants them to.

"We haven't seen any results from Abenomics," says Kazou Noguchi, a 65-year-old who owns a small fruit shop in northeastern Tokyo and buys from a local wholesale market. "Abe is only doing this for big business leaders, not for people like us. You can see that the market has lost its liveliness. The money isn't circulating."

As Japanese companies and unions prepare to enter their annual "Spring Offensive" salary negotiations, many observers are waiting to see to what extent Japan Inc. plays along with Mr.

Abe, who has personally pleaded with CEOs to raise wages and create a virtuous circle of investment that would lead to a sustained recovery. Although some major Japanese corporations with exposure to international markets are likely to follow Mr. Abe's advice, the majority of Japanese workers are employed by smaller firms with less than 1,000 employees - some of which only have exposure to the sluggish domestic economy.

For two businessmen from the Japanese city of Toyama, talk of wage increases is bittersweet. Visiting Tokyo on business, they said they had both gotten wage increases recently - but that this only came about after their wages had already been cut back. The raises, consequently, meant they are now earning exactly what they did before, but in an economy in which prices are higher.

"Abenomics has not inspired our consumption," said Mr. Hayashi, who only gave his surname. "To be able to feel that, we need wages to be up. But they're not."

As the dollar takes a dip, Beijing builds Canadian dynasty
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By NATHAN VANDERKLIPPE, IAIN MARLOW
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Saturday, February 21, 2015 – Print Edition, Page B1


BEIJING, VANCOUVER -- The downtrodden loonie has found a new friend in China. Armed with a currency that buys 12 per cent more Canadian dollars than six months ago, Chinese travellers and businessmen are clamouring for visas to cross the Pacific.

In January, Chinese applications for visas to Canada climbed 51 per cent over last January, rising to roughly 15,000 in a month that is typically among the year's slowest for visa requests. The rise comes as a sudden boost in Chinese buying power combines with domestic economic weakness to prompt growing interest in Canada from Chinese tourists, investors and homebuyers.

"We were surprised, because it's a much higher growth than what we would have expected," Canada's Ambassador to China, Guy Saint-Jacques, said in an interview. To deal with the deluge, the embassy has asked Ottawa to send over enough temporary workers to boost its visa processing ranks by nearly 50 per cent.

The surge in numbers is set against a broader rise in visitors to Canada. Over the first 11 months of 2014, visitors from Japan, South Korea, Mexico and India were all up double-digits - but none as much as China, whose overnight visits were up 29.4 per cent, according to the Canadian Tourism Commission.

(Visits from Britain, France, Germany and Australia were each up roughly 5 per cent in the same period.)

The sudden surge in Chinese visits comes after years of steady increases, with the number of Chinese visitors to Canada nearly tripling since 2009. That was the year Beijing granted Ottawa "approved destination status," which gave Canada advantages in marketing to China and opened the door to Chinese group visits.

More recently, tourism officials have credited the rise in tourists to Canada's top ranking as a place to visit by the Reputation Institute, which conducts an annual national brand survey.

Canada is lagging broader trends, however, with the United Nations World Tourism Organization reporting a 4.7-per-cent rise in worldwide tourism. The first 11 months of 2014 still saw an overall 3.1-per-cent rise in overnight visits, as the growth from overseas markets was tempered by falling U.S. visitor numbers.

Where Canada is succeeding is with China, particularly compared with international rivals.

Australia last year saw less than half Canada's growth in Chinese visitors while Britain statistics show a slight decrease in travellers from China in 2014.

The loonie, and broader opportunities for Chinese visitors - including their increased spending power in property markets such as Vancouver, and a desire for Western education - are all factors.

"A cheaper Canadian dollar reinforces the perception that it is a good time to buy Canadian real estate," said Dan Scarrow, a Hong Kong-based executive with Macdonald Realty who has worked with numerous Chinese buyers coming to Canada.

He notes the Chinese yuan has also, in tandem with the U.S. dollar, made big gains against the Australian dollar and the euro. And "the perception is that the Canadian dollar still has some more weakness moving forward, so there's no immediate pressure to make a quick decision. That said, those that were on the fence about buying before are now more likely to invest in Canada."

The yuan's strength relative to the loonie is not just a recent phenomenon - it's up 18 per cent over the past 18 months, providing a sizable discount for Chinese investors and homebuyers looking to Canada. And it comes at a time when a slowing Chinese economy and increasingly long-lived corruption crackdown are pushing wellheeled Chinese to move their money elsewhere. China's home prices are also cooling, while Vancouver's keep charging ahead.

A Barclays survey last year of Chinese people worth $1.5-million (U.S.) found 47 per cent planned to get out of China in five years. Their top two destinations: Hong Kong and Canada.

"What is different today compared to 10 years ago: not only do you have more millionaires who want to immigrate to Canada, you also have more millionaires wanting to keep their capital safe in Canada, without living here," said Richard Kurland, an immigration lawyer in Vancouver who works with wealthy clients in China.

Education is another key reason, as monied Chinese seek foreign schools that have sound reputations and are not infected with propaganda. In recent months, a Beijing-led ideological campaign has extended to universities, where professors have been warned against the dangers of Western thought, while heightened Internet censorship controls has made it harder than ever for those inside China to access outside knowledge.

If the loonie remains low relative to the yuan over coming months, which are the critical university enrolment period, it "should result in greatly increased numbers of students destined for Canada," said Victor Lum, the vice-president of Well Trend United, an immigration company with offices across China. "Increases of at least 20 per cent are expected."

Associated Graphic

Chinese tourists snap photos of Canada geese in Vancouver's Stanley Park in June.

JOHN LEHMANN/THE GLOBE AND MAIL

Commodity crash reflects global slump
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Trouble spots are everywhere as weak demand for raw goods drives prices below the lows seen during 2008-09 recession
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By BRENT JANG
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Tuesday, February 24, 2015 – Print Edition, Page B1


VANCOUVER -- Global commodity prices have tumbled to levels below the depths of the Great Recession, underscoring the widespread difficulties facing the global economy.

While crude oil's price collapse has been in the spotlight, a wide range of other commodities are suffering as well, including natural gas, coal, iron ore, copper, grain and pulp and paper.

The commodity crash is the result of too little demand for raw goods now in plentiful supply after producers ramped up capacity in recent years in anticipation of steady global growth.

But trouble spots are everywhere. Commodity markets have declined during worldwide turbulence as the pace of growth in China continues to slow, Russia grapples with an imploding economy and ruble and Greece struggles through an economic crisis.

Oil's big drop has hurt many energy-producing countries, including Canada, where low prices are hammering Alberta and reducing growth for Canada as a whole.

The Bank of Nova Scotia's commodity price index fell to 100.9 points last month, a drop of 27.9 per cent since January, 2014. The index, which tracks a weighted basket of commodities including oil, metals, forest products and agriculture in U.S. dollars, has sunk through levels of the 200809 recession to reach its lowest point since January, 2007.

"It's a lacklustre world economy. It's a combination of slow demand growth and some capacity expansion," said Patricia Mohr, vice-president and commodity market specialist at Scotiabank.

"China is a part of the story because the Chinese economy is slowing gradually," Ms. Mohr said.

Another economic indicator also highlights weak conditions globally. The Baltic Dry Index, created in 1985 as a measure of global shipping, crumbled last week to a record low of 509 points. The BDI's woes reflect the slump in the shipping industry's prices to transport dry raw materials over 26 global routes.

Economists watch the index because the amount of raw materials being shipped - from coal to grain to iron ore - provides a key indicator of consumption and manufacturing trends. The index reached a record high of 11,793 points in May, 2008, before diving during the worst of the global financial crisis in 2008-09.

The effects of slower-thanexpected global demand and continued ample supplies have translated into tough times for an array of commodities.

"The global economy is slowing, and resource industries are very important to the Canadian economy," Ms. Mohr said.

Nationally, the Conference Board of Canada predicted two weeks ago that the Canadian economy will expand almost 1.9 per cent this year, down from its previous forecast made in November for 2.4 per cent growth in 2015 and also a decline from its preliminary estimate of 2.2 per cent growth in 2014.

On Monday, the board said Alberta's economy will be the hardest hit in the country, forecasting that the oil-dependent province's gross domestic product will shrink 1.5 per cent this year.

"Low oil prices are sending a chill through Alberta's formerly sizzling economy," the board said in its provincial outlook.

"The sudden collapse in oil prices has significantly altered the economic landscape - in Canada and around the world.

Nationally, we expect the impact to be negative. But at the provincial level, it will be highly uneven."

British Columbia is forecast to lead the provincial pack this year with GDP growth of 3 per cent, followed by Ontario and Manitoba each at 2.9 per cent.

British Columbia is expected to thrive due to a diversified economy and a steady influx of new residents from international and interprovincial migration.

If Ontario does perform as well as predicted in 2015 in part due to the lower loonie bolstering manufacturing exports, "this would mark the first year since 2002 in which economic growth in Ontario outpaces the national average," the board said.

Newfoundland, which has benefited from offshore oil revenue in the past, will get bruised, according to the board's outlook, which envisages the province's economy will contract by 0.6 per cent this year. Saskatchewan will also be hurt by lower oil prices as its GDP growth is forecast at only 0.8 per cent in 2015.

Scotiabank's January oil and gas subindex fell 21.5 per cent from the previous month and is down 52.4 per cent year over year.

Ms. Mohr said the rise of the U.S. greenback against most currencies has had a deflationary effect. She also points to the devalued Russian ruble as one example of ripple effects spreading to North America.

Russian newsprint producers have been able to discount their supplies into Asia, which in turn have pulled down North American prices, she said.

Associated Graphic

Rail cars carrying iron ore are pictured in Wabush, Nfld. Iron ore is one of the raw materials that is currently suffering.

FRED LUM/THE GLOBE AND MAIL

Barrick returning to miner's 'original DNA'
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By RACHELLE YOUNGLAI
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Friday, February 20, 2015 – Print Edition, Page B1


Barrick Gold Corp. founder Peter Munk had a vision for his company. Barrick's new chairman John Thornton has another one.

Less than a year on the job as chairman, Mr. Thornton appears to have killed Mr. Munk's dream of turning Barrick into a giant diversified mining company, and plans to forge a deep business relationship with China are no longer on the table.

Instead, Mr. Thornton wants the world's biggest gold producer to return to its roots when it was a nimble operator with an entrepreneurial spirit, a streamlined corporate structure and a pristine balance sheet that earned a top credit rating.

Barrick, like the rest of the gold industry, was forced to clamp down on expenses when bullion began plummeting in 2011. Under Mr. Munk and previous management, Barrick had started becoming leaner by selling and suspending expensive operations and shrinking production.

But Mr. Thornton suggested Barrick had lost its way over the past decade and is pushing the company back to its "original DNA."

Gone are the layers of managers between Barrick's executives and the 19 mines that it operates.

Barrick's Toronto headquarters is now a skeleton crew of 150, compared with 500 in its heyday.

Plans to boost copper output or expand into another commodity - a goal that Mr. Munk and Mr. Thornton appeared to share at one time - have been set aside.

"First and foremost our focus is gold. We have no plans to diversify into other metals and we have no plans to add to our existing copper position," Mr. Thornton told analysts on a call to discuss year-end results.

Mr. Thornton and his new executive team repeatedly stressed that Barrick was focused on a handful of mines in the Americas, particularly in Nevada, the home of the company's best mine, Goldstrike. The company said it would get rid of any asset that does not deliver a 10- to 15per-cent return on investment capital.

So far, Barrick has put one of its Australian mines and a Papua New Guinea mine up for sale. Other assets will likely be put on the market as the company aims to reduce its debt by $3-billion (U.S.) this year.

When asked if Barrick would consider raising funds through another share offering, similar to what it did in 2013, the company said that was a "distant" idea.

"Nothing is off the table but we definitely will not be selling anything that isn't the full value," Kelvin Dushnisky, Barrick's co-president, said on the call.

The company dismissed thoughts of big merger. "In terms of transformational acquisitions, that is not an area of focus," Mr. Dushnisky said. Last year, Barrick tried to merge with Newmont Mining Corp. to combine their operations in Nevada.

But the deal blew up with each side blaming the other for the failure.

As for China, "We are in no hurry to do something, if we do anything at all. We want to do the right thing and take our time to do it," Mr. Thornton said. "I want to emphasize, don't hold your breath for that because it will be a long time."

Mr. Munk chose Mr. Thornton, a former Goldman Sachs president, in part for his ties to China. The former banker spent years building relations with some of the highest government officials there, first when he was Goldman Sachs' emissary and then as a director at Beijing's Tsinghua University.

It is unknown whether Mr.Thornton's back-to-basics strategy will work, but investors like what they see so far. Barrick shares rose more than five per cent in Toronto Thursday. TD Securities upgraded its recommendation on Barrick to a "buy" from "hold."

This week, Barrick wrote down the remaining value on its troubled Lumwana copper mine in Zambia - a fitting close to the company's ill-timed foray into copper. Barrick got Lumwana through its $7.3-billion (Canadian) acquisition of Equinox.

The purchase was part of Barrick's plan to diversify. But instead it has been written down entirely and has contributed to Barrick's nearly $13-billion (U.S.) debt burden.

The Lumwana loss along, with charges on some of Barrick's other mines, brings the total amount of writedowns for last year to $3.4-billion and adds to the $11.5-billion in charges incurred in 2013.

That led Barrick to report a loss of $2.9-billion in 2014 compared with a loss of $10.4-billion in the previous year.

Barrick (ABX) Close: $16.03, up 82¢

Associated Graphic

John Thornton was hired in part for his ties to the Far East, but he is choosing to pivot away from deals in China.

TIM FRASER FOR THE GLOBE AND MAIL

The payphone's power: Coins and cords in a wireless world
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By RICHARD BLACKWELL
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Friday, February 27, 2015 – Print Edition, Page B1


Even in the age of the smartphone, Canadians aren't ready to hang up on the pay phone.

In a surprising report Thursday, the Canadian Radio-television and Telecommunications Commission said 32 per cent of Canadians used a payphone at least once in the past year, despite the declining numbers of phones available and the ubiquitous adoption of mobile phones.

Still, payphone call volumes are falling by 24 per cent a year, the CRTC said, and phone companies are yanking payphones out at an annual rate that will rise to 15 per cent a year by 2016. Next year, there will be about 55,000 payphones across Canada, about onethird of the number that were in place in 2005.

As the CRTC understated it, in dry commission-speak: "Payphone service is not relied upon to the same extent as it was in prior years."

The CRTC is concerned with what happens to small communities when the last payphone is removed. Since 2004, the regulator has required that a phone company wanting to take the last phone out of a community must notify the local government, post a notice on the phone booth itself, and put an ad in the local paper. Then, in 2013, it put a temporary moratorium on the removal of payphones in any small communities.

Now, the CRTC is asking for public comments on a proposed tweak of the rules that would define a "community" as a municipality or a First Nations reserve, and add the notification provisions to any payphone in a location where there isn't cellphone service.

While the commission acknowledges that payphone use is declining, it also notes it can be a vital service - particularly for Canadians who are "economically or socially disadvantaged." Far fewer lower-income Canadians have cellphones than those with the highest incomes - where mobile phone penetration is well over 90 per cent - according to data gathered by the CRTC.

Payphones are also sometimes used "as a last resort in times of inconvenience and emergency," the commission noted.

For phone companies, however, many payphones are money losers. Bell Canada and Bell Aliant told the CRTC that, in 2013, they had 636 payphones that had no usage at all over a 13-month period, and 10,500 phones with revenue of less than 50 cents a day, on average. Phone companies are not allowed to charge more than 50 cents cash for a local payphone call, or $1 if it is a non-cash payment.

Despite that many payphones aren't covering their costs, the CRTC insists "tens of thousands of payphones are forecast to remain financially viable for the foreseeable future at current rates."

Telus Corp. spokesman Chris Gerritsen said his firm "has always taken a moderate approach to removing payphones, collaborating with communities to ensure the best possible access to the service even as use declines and phones become unprofitable."

A Bell Canada spokeswoman said, "Bell continues to ensure that payphones are affordable and accessible, especially in high traffic locations such as shopping malls, airports, hospitals and other community facilities. We plan to maintain payphones in these locations and many others for the foreseeable future."

The Public Interest Advocacy Centre, which presented the CRTC with evidence of the value of payphones to low income earners, noted that even people who have cellphones sometimes need to use payphones. People who run out of prepaid minutes will need other means of making calls, it said, and low-income individuals often have plans where rates are higher during the day time, so they prefer to use a payphone for some calls.

In an interview, PIAC executive director John Lawford said it is crucial that all Canadians have affordable access to the phone network - and for many people, payphones are the answer.

"Everyone [needs] to have some way of getting on the network and communicating in a way that is affordable and in a way that works for them," he said.

Mr. Lawford said phone companies could also use payphones in more creative ways - setting them up as WiFi hot spots or "dressing them up with advertising" to generate more revenue.

"They are often in good public and semi-public spots," he said. "The ten square feet of real estate they hold is actually pretty valuable."

The CRTC report said most payphone removals are initiated by the owners of the property where they are located, not by the phone companies themselves.

Associated Graphic

Bell Canada and Bell Aliant told the CRTC that, in 2013, they had 636 payphones that had no usage at all over a 13-month period.

FRED LUM/THE GLOBE AND MAIL

BMO pins hopes on economic turnaround
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Despite 6-per-cent drop in profit, CEO says lower loonie and fast-growing U.S. economy bode well for job creation this year
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By DAVID BERMAN
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Wednesday, February 25, 2015 – Print Edition, Page B1


The Bank of Montreal is optimistic that the Canadian economy is poised for a better year ahead, even as the bank reported disappointing financial results in an operating environment that the bank's chief executive described as "unsettled."

BMO kicked off the start of first-quarter reporting season for the Big Six Canadian banks with declining earnings that fell shy of analysts' expectations, underscoring concerns about the impact of sharply lower oil prices, falling interest rates and a slowing domestic economy.

Yet Bill Downe, BMO's chief executive, said that some of the difficult operating conditions should set the mood for a better year ahead.

"With a more competitive Canadian dollar and lower energy costs and a faster-growing U.S. economy, our biggest market, I have an encouraging view on the potential for job creation in the manufacturing and service sector of the economy," he said.

He described the Bank of Canada's decision in January to cut its overnight interest rate as a move that "put some insurance into the Canadian economy."

He is even upbeat on the Canadian energy sector and its impact beyond Alberta: "I know that the oil and gas sector can make a pretty rapid adjustment to its cost structure," he said.

"And while production levels are important, I think the Ontario economy and the Quebec economy have the opportunity to accelerate nicely here."

Investors took a more skeptical view, sending BMO's shares down 2 per cent, to $75.83, and reinforcing a gloomy start to the year for bank stocks.

Most other bank stocks also fell, implying that investors see BMO's results as a harbinger for the broader sector as low interest rates squeeze the income generated on loans, the sharp drop in the price of oil weighs on activity in capital markets and tapped-out consumers assess their appetite for debt amid a slowing economy.

The bank reported net income of $1-billion in the first quarter of 2015, down 6 per cent from last year. On a per-share basis, net earnings declined to $1.46, down 8 per cent. They missed analysts' expectations by more than 12 cents a share.

"Overall, we have a negative view on the quarter," said Darko Mihelic, an analyst at RBC Dominion Securities, in a note.

While BMO reported that its revenues during the quarter rose above $5-billion, up nearly 13 per cent from last year, key measures of profitability declined.

Return on equity, for example, retreated to 11.8 per cent, down from 14.2 per cent last year and well below the bank's target of 15 per cent.

Still, the first quarter showed some encouraging areas for BMO that support its long-term strategy of expanding beyond Canada.

It acquired Britian-based F&C Asset Management in 2014, after its $4.1-billion (U.S.) deal for U.S.based Marshall & Ilsley Corp. in 2010.

Net income from its U.S. personal and commercial banking operations rose 15 per cent over last year.

"In the context of a still-strengthening U.S. economy, the benefits of our U.S. footprint are becoming increasingly apparent," Mr. Downe said on a conference call with analysts.

In the bank's wealth-management division, assets under management surged 43 per cent, to $852-billion. After excluding the impact of the F&C acquisition, assets still grew an impressive 18 per cent from the impact of the stronger U.S. dollar, an ongoing bull market in stocks and the attraction of new clients.

Mr. Downe said that the bank will keep a close eye on its expenses, but suggested that the frugality doesn't need to include job cuts.

"I characterize it as belt-tightening," he said. "You look at new hiring with an extra amount of deliberation. We are continuing to invest in all of the businesses, and we think we can make the same progress without adding more people at the margin."

Royal Bank of Canada and National Bank of Canada report their results on Wednesday.

Bank of Montreal (BMO) Close: $75.83, down $1.55

Associated Graphic

Chief executive Bill Downe says BMO will keep an eye on its expenses and that it doesn't need to include job cuts.

MICHELLE SIU/THE CANADIAN PRESS

Energy slump pulls down corporate profits
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By LUKE KAWA
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Monday, March 2, 2015 – Print Edition, Page B1


More than halfway through earnings season, dismal fourth-quarter results from the resource sector have been a huge anchor on profit growth for corporate Canada.

The aggregate earnings of companies in the S&P/TSX Composite index that have so far reported have contracted by 10 per cent on an annual basis, according to data from Bloomberg.

For energy companies, the fourth quarter was supposed to be the calm before the storm.

Heading into the reporting period, adjusted profits were expected to rise by 10 per cent before hitting the skids in the first quarter of 2015 as the extended downturn in crude prices was fully reflected in their results.

Thus far, that projection appears to be wildly optimistic.

In the oil and gas sector, adjusted profits are down a whopping 76 per cent compared with the same period in 2013. Two-thirds of exploration and production companies, however, have yet to release their results.

The large integrated firms, Suncor Energy Inc., Cenovus Energy Inc., and Husky Energy Inc., saw fourth-quarter adjusted profits nearly cut in half relative to the same period in 2013. Analysts' full-year profit estimates for the sector will likely be reduced, barring an unexpected recovery in the price of oil.

However, outside of commodity-linked companies, earnings growth has generally surprised to the upside, with a handful of standout performances.

Magna Inc. posted a terrific trifecta - an earnings beat, the announcement of a two-forone stock split and a 16-per-cent boost to its quarterly dividend - that sent shares soaring to alltime highs on Wednesday.

Meanwhile, Valeant Pharmaceuticals International Inc. soared 15 per cent on Feb. 23, the day the firm reported fourth-quarter profits and revenues that came in above the consensus estimates.

The major driver of the Canadian pharma giant's gains, however, was the announcement of an agreement to buy gastrointestinal drug specialist Salix Pharmaceuticals Ltd. for $10.1billion in cash.

Even some firms with exposure to the oil patch were able to impress. TransCanada Corp., for instance, raised its dividend by 8 per cent and reported earnings that exceeded analysts' expectations.

Most important, the big Canadian banks have managed to defy their detractors - at least for one quarter. The collapse in the price of oil and potential end to the Canadian consumer credit cycle had brought about renewed skepticism on the earnings prospects for the group, and spurred reports that the second coming of the "Great White Short" - short selling Canadian banks - was in the offing.

While bank executives warned about the forward outlook, earnings remained resilient. Four of the Big Six banks recorded adjusted profits above analysts' estimates, with Bank of Montreal the lone exception and the Bank of Nova Scotia set to report this week. The Royal Bank of Canada, Canadian Imperial Bank of Commerce, and Toronto-Dominion Bank all hiked their quarterly payouts in tandem with the release of better-than-expected results.

The S&P/TSX composite is up more than 3 per cent since earnings season commenced in late January. All sectors except the most defensive and interestrate sensitive - telecoms and utilities - have advanced over this period.

The long, drawn-out nature of Canadian earnings season means that there is still plenty to look forward to, though about 80 per cent of the market capitalization of the S&P/TSX composite have published their results.

On Thursday, Canadian Natural Resources Ltd. and SNC-Lavalin Group Inc. are scheduled to release earnings, followed by Alimentation Couche-Tard Inc. and Tourmaline Oil Corp. around the middle of the month.

BlackBerry Ltd. posts its results near the end of March, but earnings reports will continue to trickle out until the following month is over.

Associated Graphic

The Bank of Nova Scotia is set to roll out its first-quarter results this week amid investor concern over the impact of low interest rates, weak oil prices and a slowing domestic economy.

FRED LUM/THE GLOBE AND MAIL

THE GLOBE AND MAIL SOURCE: BLOOMBERG

Real estate firms in deal to secure key Target leases
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By MARINA STRAUSS
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Tuesday, March 3, 2015 – Print Edition, Page B1


Two of the country's largest landlords have moved quickly to snap up 11 of their best leases from insolvent Target Canada for what it describes as a premium price, underlining their urgency to take back control of their retail space.

Oxford Properties Corp. and Ivanhoe Cambridge Inc. have come together to make a deal with Target Canada as it winds down its operations under bankruptcy protection. The proposed purchase price for the leases, which include the store in Square One Shopping Centre in Mississauga, is being withheld but is "at the high end of the value range," according to new court documents.

The proposed deal, which Ontario Superior Court will be asked to approve on Thursday, is noteworthy because often would-be buyers don't pay much for assets of a failed company. But the landlords' agreement underlines the pressure on landlords to rapidly gain back control of prime Target stores and replace them with stronger alternative tenants.

Target Canada was granted court protection from its creditors on Jan. 15, saying it couldn't make a profit for at least another five years. It abruptly announced it was leaving Canada and closing all 133 of its stores, putting them up for auction. The initial bidding for the leases is to close on Thursday.

The landlords' deal comes as industry experts warn that Target Canada may have trouble selling some of its other leases because of their generally lessthan-stellar locations.

U.S. parent Target Corp. bought those and other leases in 2011 for $1.8-billion from Hudson's Bay Co., which was looking to unload its discount Zellers chain.

Wal-Mart Canada Corp. subsequently bought 39 of the former Zellers leases from Target to expand its Wal-Mart chain.

But now that Target is quitting Canada, rivals may not feel as much need to add more stores.

Executives at big domestic retailers have already underplayed their interest in picking up Target Canada's leases.

"This network of stores has been out and on the market for many, many years in one way, shape or form, and we haven't invested particularly in any meaningful number of stores," Galen G. Weston, executive chairman of Loblaw Cos. Ltd., told a conference call last week.

"That's because their network is not particularly complementary to the Lobaw network. ... We have identified a number of stores that we think would be complementary, but don't think of it as anything significant or material."

Michael Medline, chief executive officer of Canadian Tire Corp. Ltd., told analysts it is only interested in a "very limited" number of Target Canada's leases "if they're available and if we like them." Wal-Mart Canada and Lowe's Canada are among other retailers interested in some Target locations as well, insiders say.

Oxford and Ivanhoe Cambridge will probably have no trouble leasing out the properties they intend to buy back, said Alex Arifuzzaman, founding partner of retail-real estate specialist InterStratics Consultants.

They may want to introduce destination upscale retailers to their malls such as U.S. department stores Nordstrom, Saks or Bloomingdale's, he said.

"They want control and speed," Mr. Arifuzzaman said in an interview. As well, they may be able to increase the rent for an alternative tenant, he said.

Both Oxford and Ivanhoe Cambridge have been moving more upmarket in their malls as they grapple with customers shifting to e-commerce and generally declining shopper traffic at bricks-and-mortar shopping centres.

The 11 stores in the latest deal also include those in Upper Canada Mall in Newmarket, Ont., Oakridge Centre in Vancouver, Metropolis at Metrotown in Vancouver, Les Galeries de la Capitale in Quebec City and Mic Mac Mall in Halifax. Oxford and Ivanhoe own some jointly with other partners.

To move swiftly, Oxford and Ivanhoe agreed to drop some customary conditions for these types of transactions, such as a "due diligence" process, court filings say.

FISH OUT OF WATER
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The Bassmaster Classic is known as the Super Bowl of fishing. This is no pastoral retreat: It requires formidable mental and physical stamina - and, as Cathal Kelly discovers, proper cold-weather attire
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By CATHAL KELLY
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Saturday, February 21, 2015 – Print Edition, Page S1


GREENVILLE, S.C. -- As we get on the bus that will take us to meet the world's best sport fishermen, Roger Metz looks at me and says, "Where's your motorcycle helmet?" "Motorcycle helmet?" "And where's the rest of your stuff?" Metz, the host of a local outdoor radio show, is carrying two duffel bags of clothing.

I'm wearing a winter jacket, jeans and a tuque. It's cold, but it's not Canada cold.

Once we get to the boat launch, everyone's in a snowmobiling suit. Everyone's carrying a helmet. And the creeping sense that I'm well out of my depth begins to hit me.

We're two days from the start of the Bassmaster Classic, which bills itself as 'the Super Bowl of fishing.' This is the only major tournament you can't buy your way in to. Only the best qualify. It's a movable feast - three days, five bass a man per day, total weight wins. The winner takes $300,000 (U.S.) and the unofficial title of best angler alive.

I've never fished, but I've seen the shows. I've got Otis Redding playing in my head. In my mind, this is a pastoral endeavour.

Because of that profound ignorance, this will be the worst professional day of my life.

And I've sold encyclopedias door-to-door.

We've all booked to ride along with one of 56 competitors for their final practice session before the tournament begins on Friday. Most of these people paid $500 for the privilege, and so had the sense to bring helmets. We get on the boats at about 6:30 a.m.

We will not get off them for nine hours. That's non-negotiable.

I've booked in with Michael (Ike) Iaconelli - bass fishing's black hat. New Jersey-born and bred - a Yankee missionary in the Southern wilderness. Winner of the 2003 Classic.

Angler of the Year in 2006. GQ once chose him among the world's 10 Most Hated Athletes. That GQ took the time to notice a guy who fishes for a living tells you how big a personality he is in this cloistered world.

We meet on the dock in darkness. Someone introduces us, since I can't see him under his tip-to-tail suit of extreme-cold-weather gear.

"You going be okay?" Iaconelli wonders, seeing as I've dressed as if I'm going out to chop down a Christmas tree.

It's too late to chicken out, so ... yeah?

This will be the last time he worries about me. It won't be mine.

Sport has increasingly cosmopolitan feel

BASS - the Bass Anglers Sportsman Society - was born in the late 1960s. The first Classic was held in Nevada in 1971.

It's evolved from a secret society - at the outset, competitors were only told what lake they were fishing once they'd got on a plane - into a multibillion-dollar business. BASS claims more than 500,000 dues-paying members, who buy more than a billion dollars worth of boats alone in a given year. BASS and the Classic is the reason every suburban super-mall now houses a Bass Pro Shop.

Officials in this year's host city, Greenville, S.C., expect as many 50,000 people to attend daily weigh-ins, which play like rock concerts.

The sport is dominated by southerners, but it has an increasingly cosmopolitan feel.

"Every tournament I fish, I feel like I'm trying to figure out how to win the Classic. It's all that matters," says Texas-based Takahiro Omori, the most successful of several Japanese competing here. "At the end of your career, if you haven't won the Classic - even if you did 20 years - it doesn't mean much."

Omori won in 2004, and remains the only non-American to do so.

I ask Bobby Lane what makes a great bass fisherman. He's a 20-year veteran. His brother Chris won the Classic three years ago. He mishears the question, and thinks I've asked what makes a great "dock" fisherman.

He goes on for three minutes about floating docks, pole docks, ladder docks, heat variations, the vagaries of bait and casting tactics.

I wait until he finishes and then rephrase: "Try explaining this sport to someone who doesn't know anything about fishing."

Lane pauses.

"It's very hard for us to talk to someone like that."

"What's the secret?" says Skeet Reese, winner of the 2009 Classic. "Time in the water." How much time have you spent in the water?

"Oh, crap. There's a lot of days I was supposed to be in school that I was fishing instead. I honestly don't even know how to answer that."

BASS's biggest star is Kevin VanDam, a winner of four Classics. For the first time in a quarter-century, he missed qualifying this year. People around here talk about this failure in lowered voices, as though VanDam were sport fishing's Voldemort.

VanDam's the draw, but Reese, 45, may be BASS's ur-angler.

He's as big and fit as a linebacker, a master of many styles, from the generation of power fishermen. Slow anglers find a position and stay put. The power strategy is to hit as many locales as possible in a competition day. Always rushing and always plotting, it requires formidable mental and physical stamina.

"Tournament fishing and recreational fishing are two different worlds. People go out for fun. They get a bite. It's a great day relaxing," Reese says. "This is not for them. They'd hate this."

Like Lane, many of the competitors I talk to here approach the non-fishing types (i.e. me) with no small amount of caution. Some of the hangers-on are more aggressively insular.

While waiting to speak to someone, another guy wearing a media badge and carrying an expensive camera rig sidles up.

He eyes me up and down - everyone knows everyone else.

Outsiders are easy to spot.

"Who you with?" "A newspaper."

"What are you assholes doing here?" He laughs as he says it, but he's not joking.

Reese has a more meditative turn of mind.

He's tickled by the idea that someone might not take his job seriously.

"I suppose some people don't think this is a sport. Like, 'You fish?' Yeah, I fish. I fish my ass off.

I'd like to see someone do what we do for a week straight.

Up and down in the boat, up at 3 in the morning, fishing eight, 10 hours a day. There's nothing easy about this."

I know this to be true. I tell Reese I've spent a day on the water with Iaconelli.

"Oh, you're the lucky one!"

Reese crows, the Mississippi in his voice coming out. "I heard you had quite the experience."

You heard what now?

"Oh, yeah. They told me about you. Oh yeah, I heard about you ..." Reese says, and can't continue. He's laughing too hard.

That's what typifies this fish - the ability to find cover

Let's go back to the previous morning. Practice day. Cold as hell.

Iaconelli is 42, an angular man with a lupine smile and a thick, trim beard. He has a Mephistophelean look to him. He also has a reputation. The (fading) old guard complains about his televised fist-pumping and pouting, but I don't see a hint of friction or poor manners.

While we sit there waiting for our start time, Iaconelli banters easily with the guy in the boat alongside us - Lane.

As he leaves, Lane tosses Iaconelli a pair of heavy gloves that don't fit him: "You take 'em."

You don't give gifts to a hateable guy.

Later, I'll ask Lane about the rap on Iaconelli: "He has another side to him. Heck, we all do.

You just gotta watch out you don't trip it."

At 7:30 sharp, we're off. It's 0 C. We've been standing in a parking lot for most of two hours.

My feet are numb and, despite gloves, my hands are headed that way.

The field of play - Lake Hartwell - is enormous. It's 200 square kilometres, run through with inlets and islands. No Classic competitor is allowed near the lake after Jan 1. You're not even allowed to talk to locals past that date. Iaconelli's fished this water twice before in competition. He came down and scouted for five days in December. Every step he takes here is planned.

He's done long days of work at home with underwater mapping software, looking for the likeliest places bass will hide. That's what typifies this fish - the ability to find cover.

"Imagine you walk into a big, empty room and all there is in there is a chair. A bass would go over and stand by the chair," Iaconelli says.

Bass aren't big, but they're hard to trick, hard to catch and hard to reel in - the ultimate freshwater sport fish.

Iaconelli, a great lover of seafood, doesn't eat bass: "It's a little awkward eating your competition. It's like cannibalism."

He's already had three practice days, and found his primary hunting ground. Today he's moving to another region of the lake. In the morning, he's buoyant.

"Twenty of the guys in this field are already shot mentally, because of the cold," Iaconelli says.

He grew up fishing in the northeast. Cold doesn't bother him.

It's bothering the hell out of me, and we've just started.

Like Reese, Iaconelli is a power fisher. He plans 50 stops today.

Over his eight-hour window, that's less than 10 minutes a stop, not counting travel time.

So he sets off at what feels like a Star Wars-style jump into hyperspace.

How to describe going 120 kilometres an hour in a bass boat in freezing temperatures when you don't have a motorcycle helmet? Imagine driving down the highway without a windshield.

A bass boat is just barely a "boat."

It's a raft with a 250-horsepower engine attached. It sits about a foot out of the water. You're not wearing a seat belt (because there isn't one), you're bouncing two feet in the air and there's six inches of fibre-glass separating you from death.

"Unbearable" is a good word for it. I've got my tuque pulled down over my chin. I'm holding the hood of my jacket closed with clenched fists. Snot is rolling up my cheeks in rivers. I can't see anything, which is probably better, because even by the lunatic standard of this sport, Iaconelli is an infamously cavalier driver.

Before we left, someone took pity and gave me Vaseline to slather across my face. I will still end the day hideously wind burnt.

The lake is dotted with lavish summer homes. Iaconelli begins by finding an inlet and casting amongst the docks. The sun's just up. The lake's misting. About 60 feet from us, a fish breaks water.

What comes next is breathtaking. Iaconelli has his back turned to the leaping bass, but he's heard it. He wheels around, casts blind and lands his lure in the looniesized spot where a shallow ripple remains. A second later, he pulls the fish. It's magical to watch. It will be the last really good moment of the day.

Though much of our time is spent in relative torpor, another skill set of top anglers is a high tolerance for risk taking.

During tournaments, Iaconelli's watched a tornado form a few hundred metres from his boat on Tennessee's Old Hickory Lake.

He's cut through three-metrehigh waves on the Great Lakes.

He's fished through lightning strikes.

"A $100,000 cheque'll make you do a lot of shit you shouldn't do," he says.

Iaconelli knows where he's going to start on Friday - 25 km from the embarkation point, at a feeding shelf he's discovered and still hopes he has to himself.

"Dude, on a confidence scale of one to 10, I'm a 12. I've felt like this three times ahead of Classics. I won one of them and came second in the other."

This is Good Ike. Despite the fact he's working, he makes a real effort to school a greenhorn passenger. We talk about his life, education, philosophy, family. It's an easy conversation.

I'm trying to be solicitous, but I'm in mounting distress. The cold has got into me. I cannot feel my feet up to my ankles. All I can think is, "How am I getting off this boat?" I have a vision of trying to jump onto a rolling dock at day's end, landing in the water and drowning.

There's a portable propane heater tucked under the steering column. As casually as possible, I introduce it into conversation.

"I don't want to use it," Iaconelli says. "I want to get used to the conditions. I don't want to spoil my body."

Sweet Jesus, what I would give to spoil my body. I wait two more hours - until what I figure is just before the point that necessitates amputation - and ask if I can fire it up.

This is halfway through the day.

After that first catch, Iaconelli hasn't found anything. He's fishing purposefully, but his patience is thinning. There's more than a little Ahab to him, erect at the prow of the boat, throwing out cast after grim cast.

I spend the next while fiddling with the heater, which has a pilot light that needs to be tended through a mounting wind. The day started sunny. It's overcast now - darkening in every sense.

We're both working at something we care deeply about - him, fishing; me, staying alive - and doing so in silence. There are perhaps two hours remaining.

Iaconelli had two choices on the day. We're both beginning to feel things have gone wrong.

The first choice was to go back to where he will start the competition and expand beyond the dozen spots he's already identified. He ruled that out, worrying he'd draw a competitor to his ground, or come up empty and whittle away his confidence.

That led him to the second choice - come to a new area at mid-lake and either discover new options or eliminate the territory.

"Elimination is good. Whether we find anything here or not, this was the right choice," Iaconelli says. He doesn't sound convinced.

An hour later, he pulls the boat up in deep water, casts only four or five times, and gives up.

"You're getting quicker," I say.

"I'm getting frustrated," Iaconelli spits back.

It's the last exchange we'll have.

By the end, Iaconelli has gone from focused to frantic. Anglers are heavily penalized if they return late from the session. With 20 minutes left, we set off on a last kamikaze run across the open lake. The wind kicks up suddenly.

Choppy water has become tightly spaced, four-foot waves.

I've been really, truly scared maybe a half-dozen times in my life. The next few minutes - which feel like a few hundred - qualify.

Iaconelli is driving the boat diagonally through the prevailing wind. The engine is maxed out - once you start on this path you can't stop, or risk rolling. The boat's hitting the crest of the waves, launching five or six feet out of the water, then landing like a brick. Iaconelli has the steeringwheel console to brace himself against. Sitting alongside him, I've got nothing. Every time we skip, I float a foot in the air. The only thing keeping me in the boat is inertia. As we touch down again and again, I flop side to side. I'm one unlucky slip from going backward out of the craft. The heater at my feet is flying around. I've got a death grip on the railing. I'm moaning. Iaconelli probably can't hear me, and certainly doesn't care. After all, I got on his boat.

Twice, we're half-swamped. I'm soaked. I've brought along a waterproof backpack. The zipper's open a few inches. Everything inside the bag is drenched. Halfway through, I give up. When it ends, I don't feel relieved. I'm just surprised I've survived.

I look over at Iaconelli, wideeyed and panting. He pulls down his face mask.

"That was bad," he says.

He jumps up, grabs a rod, releases the troll motor and begins casting. Totally oblivious.

Three-hundred thousand bucks will make you do stuff you shouldn't do.

Ten minutes later, we're back at the dock. Iaconelli pops off the boat and stalks away. I have to call him back to thank him. The laidback guy I'd met in the morning is gone. Iaconelli's looking at me like I'm some sort of jinx. Who can blame him?

I trudge up to an idling media bus. I nearly weep when the warm air hits me. I sit down, dripping.

All the good ol' boys on board are trying to figure out if they're allowed to laugh.

"How was it with Ike?" one of the guys I'd met in the morning asks.

"Terrifying."

"Yeah, Ike, he's crazy out there.

He tell you about the time he crashed the boat? Ran it right up onto an island."

No. He did not tell me that.

Up to the bass

On Friday morning, bitter cold delays the beginning of the tournament.

Concern about ice on the dock pushes the launch until 9 a.m. At -11 C, it's the chilliest day in Classic history. At least it's not snowing. That weather is due Saturday.

General confusion reigns. Boats are frozen to their trailers, and get dumped into the water at speed, bumping one another. Two days ago, the ride-along marshals looked giddy as kids. Today, they move as if they're being frogmarched on a chain gang.

"They told me to bring along a survival bag," Metz says. We've already come close to tragedy. During Sunday's practice, Classic competitor David Walker spotted a local rec fisher who'd gone into the water, and saved the man's life.

I pass Reese. He's sitting up happily in his boat as if he's on a parade float, waiting to be dropped off.

"Who you going out with today?" Reese wonders archly, and winks.

Iaconelli comes down alone.

He's driving his own truck, already rushing. Someone wanders out onto the launch ramp - risky business - to do a filmed interview. Fishing's the point, but you can't fish without sponsors. Iaconelli turns his smile on, and then turns it off just as quickly.

The anthem kicks up. The first flotilla is led onto the lake by a guy in a GEICO lizard costume waving the American flag. A thousand fans in hunting camo hoot them out. It's a kitsch buffet before business begins.

"This is the most uncontrollable sport in the world," Reese told me. "You're dealing with a living creature."

Iaconelli's motor kicks in and he's off. Whether to glory or disappointment is up to the bass.

Follow me on Twitter:@cathalkelly

ABOUT THE BASS

Bassmaster Classic permitted varieties: Largemouth, smallmouth, and spotted, redeye or shoal bass will be counted.

Vitals: An average largemouth bass is roughly 20 inches in length and can weigh as much as five pounds. Smallmouth bass grow to 15 inches and tip the scales at about two pounds. The largest bass on record, caught in Japan in 2009, weighed in at 22.5 pounds and measured 29 inches. They live roughly 16 years.

Large or small: Largemouth bass are mostly green with a black stripe across the body and their mouth stretches far beyond the eye. Smallmouth bass are yellow to olive brown with many vertical dark stripes. Their mouth goes to the middle of the eye.

Habitat: Largemouth bass like calm lakes and ponds; smallmouth prefer flowing rivers and streams.

Why fish for bass: The predatory freshwater game fish is one of the most aggressive and can fight itself off a hook.

Pisces non grata: Smallmouth bass are considered invasive species in New Brunswick and British Columbia.

Strange fact: Bass don't have eyelids and their iris is fixed.

Stranger fact: Scientists believe the smallmouth bass is smarter.

Source: outdoorlife.com, canadafishing.ca, bassmaster.com, Pittsburgh Post Gazette

Associated Graphic

Dean Rojas took the lead on the first day of the Bassmaster Classic on Friday, with five fish weighing 21 pounds 2 ounces. Fifty-six competitors will be fishing for the next three days, hoping to win the sport's biggest tournament.

FRED LUM/THE GLOBE AND MAIL

Bass are some of the most aggressive fish.

DSAMS/GETTY IMAGES/ISTOCKPHOTO

With the sun yet to rise, Bassmaster competitors stop at a service centre on Friday before they launch their boats. The location for this year's tournament, South Carolina's Lake Hartwell, is massive, a 200-square-kilometre body of water that is run through with inlets and islands - and from Jan. 1 till now, competitors weren't even allowed near the lake.

FRED LUM/THE GLOBE AND MAIL

Professional angler Randy Howell holds the Bassmaster Classic champion's ring he won in 2014 on Lake Guntersville, Ala. The Bassmaster Classic is organized by BASS - the Bass Anglers Sportsman Society - and the first Classic was held on Lake Mead, Nev., in 1971.

PHOTOS BY FRED LUM/THE GLOBE AND MAIL

Professional fisherman Michael (Ike) Iaconelli is interviewed by members of the Japanese media. New Jersey-born-and-bred Iaconelli is bass fishing's black hat. He was winner of the 2003 Classic, named Angler of the Year in 2006 and was once on GQ magazine's 10 Most Hated Athletes list.

The field for the Classic launch their boats into Lake Hartwell on Friday, the day of the tournament's start. Prior to the competition, entrants get practice days out on the water. For some competitors, Lake Hartwell's cold was too much. For others, the days of practice provided good results.

Jacob Powroznik lands a bass during the first day of competition. The 56 competitors have three days to catch five bass a man per day, and the entrant with the most weight wins. The winner of the Classic also receives $300,000 (U.S.) and the unofficial title of best angler alive.

Fans gather at the Bon Secours Wellness Arena for the weigh-ins on Friday after the first day of competition. Tournament officials expect as many as 50,000 people to attend the daily weigh-ins.

HABS GM FEELING RIGHT AT HOME
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His French was rusty upon returning to Montreal, but this native son is now fully in his element as architect of a serious Cup contender, Sean Gordon writes.
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By SEAN GORDON
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Saturday, February 28, 2015 – Print Edition, Page S1


MONTREAL -- Factoids and minutiae stick in his mind like fridge magnets, carefully arrayed and available for consultation on a whim - uniform numbers, faces, names, anecdotes both funny and tragic.

Marc Bergevin remembers.

It's not clear how this came to be. It makes for a neat party trick, though.

"[Montreal Canadiens coach] Michel [Therrien] can't get over it - I remember every kid I played with when I was 12 years old. He'll throw out a name and I'll tell him, 'Sure, I played midget AAA with that guy.' You wore number 23, right Michel? [Habs assistant coach] Jean-Jacques [Daigneault] wore 15, [Pittsburgh Penguins legend] Mario [Lemieux] had 27 or 12, depending on the year," says Bergevin, the Habs' third-year general manager and one of hockey's most fascinating executives.

A prospect he might have seen play once, years ago, in some farflung European rink? Yeah, that rings a bell: Russian kid, defenceman, shoots left.

Recently, Bergevin ran into a minor-hockey teammate at Méchant Boeuf, a restaurant he's been known to frequent in Old Montreal. Bergevin hadn't seen the man in three decades, but he identified him by the number he wore at age 11.

"These things just leave a mark," he says. "But my sister will ask me where I left her key yesterday, and I won't know.

Don't ask me where I put down my wallet."

So it can be established Marc Bergevin has total recall of facts and figures, which is handy when your job is to outmanoeuvre smart hockey people and make snap decisions involving one or more of the thousands of professional and elite junior-aged hockey players in the world.

It's a job Bergevin is exceedingly good at and as the March 2 trade deadline approaches no one in hockey will be surprised if he lands another lunker.

From contract negotiations to trades to attracting free agents, the personable 49-year-old has emerged as perhaps the league's canniest wheeler-dealer - he garnered nominations for NHL executive of the year in both of his first two seasons.

Call it the Bergevin style, a combination of emotional intelligence, talent spotting, networking ability, blind luck (he is the first to admit this) and experience with the real-world pain and joy that can be wrung from 20 years as a marginal NHL player.

The Canadiens' recent run of success flows from the players and coaches, but it's no accident that the club's rise began with the hiring of their general manager after a 15th-place finish in 2012.

Bergevin draws considerable merriment from the fact he was well down the list of fan choices to take over from Pierre Gauthier in a Journal de Montréal poll in the spring of 2012. (Patrick Roy won by a landslide: "I was Marc Who?" he says.)

He's fine with being underestimated, but after nearly three years on the job, that's a pitfall his peers try to avoid. Bergevin's wardrobe choices suggest a bold, confident personality - he's a bit of a clothes horse - but he conducts his affairs with monkish discretion.

The contrasts don't end there.

At a time where front offices are increasingly populated by law school grads, math quants and MBA types, Bergevin is a go-withyour-gut autodidact. Hockey's a world of buttoned-down overachievers, while he's a mischievous, inveterate prankster - although now that he's the boss, he says, he has toned it down.

"It's part of why I wanted to bring him in. If I was going to have to deal with the stress level of the job, I wanted to have at least some fun," says Florida Panthers GM Dale Tallon, who gave Bergevin his first front-office job, in Chicago in 2005. "He has a way about him that gets people to open up. It's a good tool to have as a manager," Tallon adds.

Surrounded by big personalities and egos, Bergevin is generally happy to delegate authority. It's revealing that there have been few departures under his tenure - Gerard Gallant, who went to coach the Panthers, stands out.

Bergevin admits he warded off approaches last year for associate GM Rick Dudley and scouting director Trevor Timmins by giving them improved deals.

"Delegating only works if you have confidence in your staff," Bergevin says. "I saw how it works in Chicago, with Dale and Stan [Bowman]. You hire the right people and you empower them to do their jobs."

As he says this, Bergevin is reclining in a booth at a Starbucks near Montreal's Atwater Market. He's a regular, and why not? The place is surrounded by personal landmarks. Down the street is Dilallo Burger, partowned by Gilles Meloche (a former NHL goalie and hockey lifer who Bergevin has known for decades). Around the corner is the firehouse where his dad used to work. Several of his cousins live a couple of blocks away. His older brother lives in nearby VilleÉmard.

Bergevin grew up a few streets south, across the Lachine Canal - which his condo overlooks - in hardscrabble Pointe-SaintCharles, crammed into a threebedroom apartment with his parents, four older siblings and one of his grandfathers.

"It was so small you had to go outside to change your mind," he quips.

Bergevin made enough money as a player - and earns enough now as a GM - to live in a fancier part of town, but he chose to come back to the old neighbourhood.

"I'm comfortable here, I'm close to my roots," he says.

Familiarity, it turns out, is a major theme in his life.

Consider that he remains fast friends with Lemieux and Daigneault, both of whom grew up in the next parish over (the trio met when they were in grade school).

He also employs Clément Jodoin, his former midget AAA coach, and Therrien, who once lived with the same billet family in Chicoutimi (he was traded just as Bergevin arrived with the QMJHL's Saguenéens in 1982).

Dudley was his boss in Chicago, he played with Canadiens' frontoffice types such as Scott Mellanby, Martin Lapointe and Rob Ramage, as well as with several of the club's scouts. Not all the people in front office are close friends, but all are well known to him. One of his minor coups was hiring goalie coach Stéphane Waite away from the Blackhawks (his arrival coincided with goalie Carey Price's emergence as perhaps the league's best netminder).

Another thing you learn quickly about Marc Bergevin: He attends carefully to his relationships.

"He stays in touch," says Ron Stevenson, an octogenarian excop who coached Bergevin, Lemieux and Daigneault with the now-defunct Ville-Émard Hurricanes, a powerhouse peewee AA club, in the 1970s and 1980s.

The Hurricanes were a tightlyrun ship: Players wore their Sunday best to games (that's not where Bergevin's love of finery started; he says it came later, in Chicoutimi), and leaving a piece of equipment behind resulted in having to write out, "I will not forget my elbow pad at practice again" a couple of hundred times.

Bergevin recalls the period fondly. Stevenson and his wife were his guests at the Habs' first home playoff game under his tenure.

"Marc was just a nice kid, a very respectful kid ... not really exceptional in any way, but I will say he had a lot of guts. He would play hurt even then. Well, most of the time," says Stevenson with a laugh, relating an amusing anecdote about the day Bergevin needed a painkilling injection in a sore elbow at a tournament and vanished when the doctor left to fetch the needle and syringe.

Those established ties also explain the fabled Bergevin network, a tight web of connections.

The hockey world is small, so everyone has contacts, but even by that standard, Bergevin's Rolodex is impressive.

In two decades as an NHL player, Bergevin was a member of eight teams and shared a dressing room with just under 450 players, running the gamut from Atcheynum to Zalapski. He played with five of the six Sutter brothers and a Gretzky (Brent, not Wayne).

His former teammates are prominent in broadcasting (Ray Ferraro, Darren Pang), the player-agent world (Igor Larionov) and in coaching (Jack Capuano, Todd Richards and Gallant, among others). Several are in the Hall of Fame (Lemieux is at the head of the class).

As well, Bergevin played with at least nine current NHL general managers and three team presidents. He also played for and worked with a handful of other senior executives (including Tallon, his mentor in management, and Calgary's Brian Burke).

"I don't think there's a rink I can go to where I don't know anyone," Bergevin says.

Ex-teammates are not automatically bosom pals, but Bergevin is at least acquainted with all the league's power brokers. "He knows everybody, he's like the mayor of the league," says an official with a rival Eastern Conference team who isn't authorized to speak publicly.

NHL executives will typically do most of their business with the half-dozen other managers they know best in the league.

Bergevin is among a smaller number who keep regular contact with basically every team.

Player agent Pat Brisson, an omnipresent figure in NHL backrooms, says Bergevin's social skills are his principal edge.

"He understands people, he can find the deal points ... and he's plugged in at all levels of the game," says Brisson, a close friend who met Bergevin the day they were both drafted in the QMJHL. "He's good at studying people - it's not a strategy or anything like that, it's just how he is."

Bergevin's marquee trade as GM - acquiring coveted sniper Thomas Vanek from the New York Islanders at the trade deadline last season for a jaw-droppingly reasonable price - was done with Garth Snow, his former teammate in Pittsburgh. A few weeks later, he sealed the deal to sign 22-year-old Czech free agent Jiri Sekac, snapping him up despite the interest of more than a dozen other teams.

He has made some less-ballyhooed acquisitions that have nonetheless paid handsome dividends, such as defenceman Mike Weaver and winger Dale Weise.

He has also found takers for declining veterans with onerous contracts, such as Erik Cole, Josh Gorges, Travis Moen and, most recently, Rene Bourque.

This past week, he flipped Sekac, who wasn't a seamless fit in Montreal, to the Anaheim Ducks in exchange for Devante Smith-Pelly, a 22-year-old human bowling ball who is well-suited to playoff hockey. There had been rumblings of Sekac's availability - his being a healthy scratch was an obvious tip-off - but as usual nobody saw the transaction with Anaheim coming.

Bergevin even managed to get ahead of the market - only suckers pay retail on deadline day.

Bergevin's not perfect. He can be detail-oriented to a fault, and has been known to occasionally keep a very tight grip on the tiller. Not every move has paid off and, as he says, "nobody bats a thousand." The four-year contract extension to defenceman Alexei Emelin, that pays him $4.1-million (U.S.) a year, is starting to look a little too rich. Freeagent signings such as Douglas Murray and Daniel Brière didn't work out; neither did minor trades for defenceman Davis Drewiske and tough guy George Parros.

The jury is still out on last summer's key signing, defenceman Tom Gilbert (who has a year left at $2.8-million and has been playing third-pairing minutes with Emelin), and Bergevin doubtless would have preferred to spend a little less money on P.K. Subban's contract extension.

But in the aggregate, he has retained several core players at reasonable expense - the longterm deals for Price, Brendan Gallagher, Lars Eller and Max Pacioretty (a bargain so outrageous it prompted the Connecticut native to switch agents). He has managed the salary cap deftly, and trusted his scouting staff to pile up young talent.

Bergevin is fond of saying his team is a club in transition, but the fact is that with Price in net, Subban anchoring the blue line and Pacioretty scoring 40ish goals a year, the Habs' Stanley Cup window is easing open.

Youngsters Alex Galchenyuk - Bergevin's next big contract challenge - and Nathan Beaulieu are emerging, and there are enticing prospects in the pipeline (Nikita Scherbak, Michael McCarron and Charles Hudon).

So Bergevin has trade bait if he feels the itch to swing for the fences and acquire a couple of big-ticket players at the trading deadline at prohibitive cost (the Vanek experience was instructive).

"There are never any guarantees ... you can't target one or two players and say, 'Aha, they're going to get us over the hump.' There are seven or eight teams that have a serious shot this year," he says, noting that a bad early round match-up can derail even the most carefully laid plans.

That said, "if you have a good goalie, you have a chance," he says. "So you take [the risk], within reason. If over the course of 10 years you make the playoffs eight times, well that's eight chances. If you go for it all after three years and it doesn't work, you pay the price for the next four years."

That's not a scenario that interests Bergevin. He has a plan, and that plan is plainly to make the Canadiens a perennial contender. The team has become bigger, faster and younger under his stewardship, and he has shown the ability to adapt and to change his mind (exhibit A: the decisions to jettison Murray and Parros). "You have to stick with the plan, sure, but also you have to adjust," he says. "If you're on the highway and you see an accident up ahead, you get off and take an alternative route. You can't be stubborn - this, and only this - but you can't be swerving all over the road. You have to keep an open mind."

You also have to maintain your humanity.

Bergevin hasn't shied from making unpopular decisions (cutting veteran defenceman Francis Bouillon loose after training camp, trading fan-favourite Brière), and unsentimental ones (putting Allen, his former teammate, on waivers and sending him to the AHL).

"At the end of the day, I have to do what's best for the Canadiens. If I can help you without hurting the team, I will," he says.

"I would hate for it to ever become easy to make those decisions. At the same time, I'd make all of them again."

This is a man who knows what it feels like to be benched, banished to the minors and traded for a tub of Icy Hot. He also knows what it's like to win a gold medal in a Team Canada jersey, which he did at the 1994 world championships.

Asked whether it's more difficult to make a personnel decision than to suffer the consequences of one, Bergevin pauses. Then he launches into a story: "I'm in St. Louis and, in training camp, I get into a fight protecting a player named Scott Young. Broken thumb, pin, I think I was out for eight weeks. I was a regular, but they put this kid in the lineup, Bryce Salvador.

When I'm ready to come back, the team is something like 25-6, Bryce is young, he's good, I'm maybe 36 years old.

"I was doing the job, but it is what it is," he says. "So I wait, I don't know, 10, 12, 15 games, and then I decide to go see the GM. I told him, 'Trade me or play me,' and he said, 'For the Blues, the best thing is to keep you, we're going to need you.' And I got pretty mad. I said, 'You're selfish.' If I don't play, I won't have a job next year. I left, and that afternoon I got traded. He said, 'I've got nothing for you, but I owe it to you.' That was hard.

Today, I understand the situation way better."

His eyes get misty as he concludes the story. Separately, Brisson offered a complement to the tale, saying the late Blues GM Larry Pleau apparently cried on the day he traded Bergevin.

One suspects Bergevin, who can be stoic and even combative in news conference situations, is a man who works hard to contain his emotions.

He has embraced the NHL's analytics revolution after a fashion (the club has a small contingent of number-crunchers), but he is also a firm adherent of the "character" school. That's partly why he was willing to overhaul a lineup that fell two wins short of a Stanley Cup final berth last spring (10 players from that team, including Vanek and captain Brian Gionta, are now gone).

Asked how he defines character, Bergevin considers for a moment. "Competitiveness is important," he says. "I also saw this saying: 'If it's important to you, you'll find a way. If it's not, you'll find an excuse.' I don't want people who make excuses.

Be part of the solution."

It's an approach Bergevin says was inculcated by the main influences in his early years: Stevenson ("he gave me structure"), his father ("he was a firefighter for 30 years, never missed a day, never showed up late") and several of his rookie-year teammates (Bob Murray, Darryl Sutter and Steve Larmer).

Murray was his first defence partner and instilled professionalism. "He was pretty grumpy," Bergevin says with a laugh.

Larmer demonstrated you can be all business and still have fun.

Sutter, who has coached the L.A. Kings to two Stanley Cups in the past three years, showed him what a competitor looked like.

"I'll tell you a story," Bergevin begins. "I'm 19 years old, we're playing in Calgary, and we were up late in the game, I want to say by five goals. At a faceoff, a guy from our team makes a little joke and I smiled and laughed. I got back to the bench and [Sutter] just reamed me out. There's four minutes left, we're winning 7-2 or something, and he's like, 'I never want to see a smile on your face until after the final whistle ever again.' It got my attention. I told him that last year."

It's a nice yarn, and Bergevin is good at telling it.

This is no accident.

"Stories help you make a connection with people ... My Uncle Ben, he's dead now, he always told me stories. My dad too," he recalls. "He was an intelligent man, he knew history, I think he also read the [dictionary] from cover to cover, never saw a crossword puzzle he couldn't finish."

When Bergevin left the Saguenéens for the NHL, he spoke only basic English. When he came home 29 years later, he surprised himself with his poor command of French. Sitting in his new office after his introductory press conference on May 2, 2012, he thought, "My god, that was pathetic."

"I was embarrassed by the quality of my French," he says.

"But I'm way better now."

It's a surprisingly candid admission from a public figure.

Bergevin is recognized everywhere he goes here and is referenced more times in the local media than the Premier.

Then again, Bergevin intuitively understands his hometown market, and he's immersed in it in a different way than his immediate predecessors (Pierre Gauthier often commuted from Vermont for family reasons; Bob Gainey was a beloved franchise icon, but often gravitated to anglophone circles). Bergevin's proximity to the everyday fan may be an underrated strength.

So is the fact he is perfectly content to stay out of the spotlight.

"He doesn't need to be the centre of attention," says Brisson, "but he can become it pretty much whenever he wants."

It happens through humour, Brisson adds, and because of Bergevin's ability to relate to others. Those who know him best tell tales of the unlikely verbal gymnastics, mostly intentional malapropisms and neologisms - in both official languages - that highlight the unique and ever-expanding Bergevin-ese dialect.

"A few years back, he was here [in Los Angeles] scouting [Kings centre] Anze Kopitar, who was in his first or second year," recalls Brisson, "and he said to me, 'Yeah, I really like that Coppertone guy, hell of a player.' " You get the picture. Cellular phones become cellulite phones, nicknames take on qualifiers - thusly 'Berge,' as Bergevin is known to intimates, becomes 'Road-Berge' when travelling.

"I'm not doing it justice," Brisson says. "He's way funnier than I'm making it sound. He could be a comedian ... he could be a lot of things if he wanted."

That's doubtless true, but Bergevin's passion is for hockey. He still plays; in fact, one of his friends is gathering many of their childhood and junior teammates for an old boys' night at the Bell Centre next month. On a recent Sunday, he grabbed his skates and stick - brand new gear, perks of being the GM - and wandered over to the outdoor rink at Parc Vinet in Montreal's Saint-Henri neighbourhood.

As the kids and adults on the ice looked up in surprise (and, one suspects, awe), he joined the game. "It was," he says, "just about perfect."

He understands the Habs job won't be his forever.

"My tombstone isn't going to say, 'Marc Bergevin, general manager of the Canadiens.' It's going to say 'Marc Bergevin, father to Wes, Rhett and Elle,' " he says.

In the meantime, the Bergevin style will continue to be refined.

This will happen because of a simple truth: For the kid from Pointe-Saint-Charles, the game is its own reward.

Associated Graphic

Canadiens GM Marc Bergevin at the Bell Centre last month. In the three years back in his native Montreal, he has the Habs back in serious contention.

GRAHAM HUGHES FOR THE GLOBE AND MAIL

Canadiens GM Marc Bergevin, left, is shown arriving for a playoff game in Boston last year. Despite having a good playoff run in 2014, he wasn't shy about making big changes for this season.

BRUCE BENNETT/GETTY IMAGES

Tuesday, March 03, 2015

Correction

A Saturday Sports profile of Canadiens general manager Marc Bergevin incorrectly referred to the late Blues GM Larry Pleau. The story should have said former rather than late.

Bradley puts his stamp on revamped TFC squad
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By CATHAL KELLY
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Tuesday, February 24, 2015 – Print Edition, Page S1


TORONTO -- ckelly@globeandmail.com

The off-duty dress code of the modern soccer star is "Visitor From the Groovy Near Future."

Toronto FC's Michael Bradley (half-leather, half-cloth longsleeve T) and Benoît Cheyrou (heavy cardigan with brass buttons and epaulettes) show up for a recent interview looking like they're about to announce the band is getting back together.

Cheyrou, 33, is new to Major League Soccer but a long-standing commodity in European football. He's won trophies in France. He's a veteran of the Champions League. He's an old campaigner.

Bradley is six years younger.

He's rarely featured on a top European side. His reputation is based almost entirely on his international career. He has quality, but no professional luck.

They look trend-oriented, but both are old-school toughs. Reputations must be earned, and all that. Yet it's Bradley who commands the room.

He doesn't answer a question without long thought. He speaks in a whisper. He locks eyes - an almost non-existent habit for a pro. He is the closest talker I've ever known. Though not a tall man, he's capable of getting right on top of you.

I've felt the presence of many intimidating sporting alphas.

Bradley has half their size, and twice their charisma.

He's the captain now. He hasn't yet been on the job for a single game, but the title fits him better than any man in this town since Mats Sundin.

I ask Bradley to name a few of his mentors in the role.

He dances around the question for a bit. Who to insult by leaving them off?

"You'll laugh," he says after a while. "My dad's a coach [former USA manager Bob Bradley].

Growing up, we'd talk soccer every day. But it wasn't always soccer. He'd find examples from other sports to make his point.

"One of the leaders that he'd always talk about was Mark Messier - in terms of his ability to put his arms around everybody and take them where they needed to go."

I turn to Cheyrou, who's been watching Bradley talk with eerie intensity. The Frenchman's come accompanied by a translator, but doesn't need him. Still, he's brand new.

"You know Mark Messier?" I say, stupidly.

"Mark Messier. Canadian hockey shooter," Cheyrou says.

"You know him?!"

A shrug: "Of course."

Last year, Toronto FC went out and spent a lot of money - as it turned out, foolishly. The appetizer was Brazilian Gilberto, who's become an unperson. Jermain Defoe was the main course.

Bradley wasn't dessert. He was the boxed cake they hand you on the way out of the restaurant.

He was a happy surprise.

Toronto ended up with Bradley because it was the only team that could afford him, and because it was its turn.

He was hurt most of the year, and still won't talk about it.

Mostly, he was frustrated. The team was a mess - Defoe checking out early, a Cold War between the coach and general manager, everyone having given up by the end.

"We were too young and naïve.

There were too many little kids," Bradley says. "I felt very strongly after last season that we needed more men. More competitors.

More fighters. More winners. Last year, we had a good group, we got along. There were no problems, but we were lacking in those areas."

It's clear from the way he says it that Bradley puts a low emphasis on the idea of "getting along."

He went off in the summer to feature in America's frantic run at the World Cup in Brazil. It's a team full of straight-from-central-casting cult heroes. Bradley plays the role of midfield legbreaker. He's the hardest man on what might be top-flight international football's hardest team.

"We are proud people, and to have the opportunity to represent your country at the World Cup, to hear The Star-Spangled Banner, you understand in those moments how many kids would kill to be in that position. How lucky, how honoured, how proud that makes you."

We often think of Americans as jingoistic, but none of them talks like this any more unless they're being ironic or campaigning for public office. We've all had the earnestness wrung out of us, and not to our credit. Bradley is never ironic and doesn't need to campaign.

When he returned to thinking about his day job, he was given what amounts to veto power.

The team had specific holes to fill, including his central midfield partner. Manager Greg Vanney mentioned that Cheyrou might be available and interested.

The team has access to a proprietary video database of European games. Bradley was given a URL and a password. He disappeared for a while: "I spent days on this thing. There are games going back seven, eight, 10 years."

He watched entire matches, focused just on Cheyrou. What did he see?

"His football brain, his left foot, his ability to attack and defend.

We're different players, but we have similar qualities."

By "similar qualities," Bradley means that controlled viciousness that typifies great holding midfielders. Toronto FC has had a few decent players in the middle, not a one of whom had a true search-and-destroy mentality. Now it has two of them.

After doing his diligence, Bradley gave management his blessing. Within a week, Cheyrou was signed.

As Bradley's explaining all this, Cheyrou is lasered in on him. It's been a long day of interviews ahead of the opening of camp. If Cheyrou's bored, he doesn't look it.

You get why Bradley's here - he's home (sort of), and he's earning at least three times what he could make in Europe.

Cheyrou had to leave. He's making only $250,000 (U.S.). He can't really know what he's getting into. The only convincing he received from Toronto FC's coaching staff was a phone call.

He seems supremely unconcerned.

"Why I came here?" Cheyrou says. "[TFC GM] Tim Bezbatchenko, [MLSE CEO] Tim Leiweke, Greg Vanney and Michael Bradley. They are not clowns ..." He says the word in the French way - "clunes." He turns to his translator, who suggests an improvement.

"Yes, clowns. They are not clowns. They know MLS, and if they are here, I think I can trust them for the choice."

More than anything, this seems to be about Bradley, whom Cheyrou knows only by reputation.

"I know Michael on the pitch, and I am a very [once again looking at his translator] proud?

Proud to listen to what he's just said about me."

It's the kind of thing you say.

But Benoît Cheyrou - veteran of league cups and title races and the very highest calibre of European competition - really means it. Like, really. He's looking at Bradley as if he's the emotionless dad who just agreed to a hug.

You can't define leadership, but - like art and pornography - you know it when you see it.

This is it.

There are still things Cheyrou can teach the man in charge.

He's surely the more cunning player. He's also the more Gallic.

Since he took so much trouble to vet him, did Bradley contact Cheyrou through the negotiation process?

"No."

No?

"No, not at all."

Cheyrou interrupts: "We speak on the pitch, with the ball."

Bradley smiles delightedly: "That's exactly right. That's the only thing that counts."

Follow me on Twitter: @cathalkelly

Associated Graphic

Toronto FC midfielder Michael Bradley

REUTERS/USA TODAY SPORTS

THE STAR PICTURE THE STAR CATCHER AND THAT KNUCKLEBALL
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The Blue Jays' R.A. Dickey and Russell Martin are getting the hang of each other's playing styles, but it remains to be seen if that will improve the team's fortunes this season
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By ROBERT MACLEOD
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Thursday, February 26, 2015 – Print Edition, Page S1


DUNEDIN, FLA. -- You got the sense early on, after watching Toronto Blue Jays catcher Russell Martin get fitted with a microphone, that this was not going to be your average bullpen session.

The workout had not even officially started yet, and pitcher R.A.

Dickey was already waving to an unruly media mob to get the heck out of the way lest they be skulled by an errant throw.

Known simply as "a bullpen," it is normally one of the more mundane activities to transpire here at baseball's spring training.

It is a function where the pitcher and catcher basically get together for a game of catch, just like kids do every day. The main difference is the ball is being tossed around at warp speed.

While that is going on, members of the media have the opportunity to stand behind a fence and watch and chew the fat. Mostly chew the fat.

Every once in a while, some know-it-all will remark that Joe Blow's curveball is looking sharp, and then the conversation will shift back to where everyone should convene that night for dinner.

But here at the Bobby Mattick Training Center on Wednesday, where the Blue Jays are continuing their spring training, things were different. Things were serious.

Martin, the new catcher, was scheduled to get together with Dickey, the knuckleball specialist, for their first bullpen of spring training.

Normally, this is no big deal.

But given the fact that the unpredictable nature of the knuckleball makes it the most difficult pitch to catch, and the fact that Martin has had scant experience catching it before, this get-together took on a life of its own.

One who tried and failed miserably two years ago was J.P. Arencibia, the former Blue Jays starting catcher.

He was behind the plate for Dickey's regular-season debut with Toronto in the 2013 home opener against the Cleveland Indians.

Arencibia was rung up with his first passed ball in the first inning and would be charged with a total of three in a miserable outing. He would not catch Dickey again that season.

Whether or not Martin, Toronto's $82-million (U.S.) off-season acquisition, will be able to pair successfully with Dickey this season is one of the main storylines to be determined over the next six weeks of camp.

If Martin can't handle it, then the task will fall to Josh Thole, Dickey's personal catcher dating back to 2010.

Martin even agreed to wear a microphone for a television sports network that was recording the event for posterity.

Dickey and Martin had not even reached the bullpen area and were just playing catch and warming up in a nearby field, and the cameras were already rolling.

Several television cameras, photographers and a dozen or more reporters were all transfixed on the two players.

"I can't even catch a straight one," Martin remarked wryly when he dropped the first nonknuckleball toss that came his way from Dickey.

Things finally moved into the bullpen, which can accommodate eight sets of pitchers and catchers.

Dickey and Martin set up at one end. The mound beside them was left suspiciously vacant.

The first few throws from Dickey came with Martin in the standing position, before he got down in the catcher's crouch to begin the serious business.

As Dickey wound up to throw, reporters pressed their noses close to the chain-link fence to get a better look and the cameras whirred in unison when the ball was delivered.

The ball ended up in Martin's oversized mitt with a satisfying thud. He did it. He caught the floater.

And so it went over the next 15 minutes or so. Martin, with surprisingly little fumbling, proved that he and Dickey should have no problem forming a battery this season.

"Let me know exactly where you want me," Martin called out at one point, wanting to know precisely where he should set up behind the plate.

"I'll go back and forth on the speed now," said Dickey.

And then it was over. As Martin stood up and walked over to shake the pitcher's hand, Dickey gave his new teammate the thumbs-up.

Speaking with reporters afterward, Martin said he still has a lot to learn about catching a knuckleball but expressed confidence in his abilities.

Now all he needs to do is get a proper mitt. For Wednesday's session he was using Thole's oversized unit, which is sort of a cross between a catcher's mitt and a first-base glove.

"That one's super soft, has a lot of give to it, so you don't have to be perfect," Martin said. "To get a glove that soft it's going to take a little while. I'm definitely going to have to maybe throw it in the microwave or something, get some oil in that thing, wrap it with, like, a softball in there and sleep on it."

Dickey said he and Martin still have to perfect the mental aspect that comes with being a successful knuckleball pairing - and that will take a bit of time.

"I think the biggest thing is communication," Dickey said.

"He's got to learn me and I need to understand how he likes to work, set up, how he likes to work a game. He doesn't have much experience in the sequencing part of how to call a game with a knuckleballer. Like when you've seen eight knuckleballs in a row, is it time for a fastball, and can you inherently be able to call upon that in a moment without me having to shake [the pitch off]?" Dickey said those are the nuances that he and Martin will have to master.

"I think you guys saw it," Dickey said. "I think he might have missed one or two, which is really, really good having never caught it behind the plate."

HOW A KNUCKLEBALL THROWS YOU

When properly pitched, the floating knuckleball can break and veer in almost any direction. This makes its trajectory unpredictable to batters, catchers AND the pitcher who threw it.

THE GRIP AND RELEASE

Few pitchers actually grab the ball with their knuckles - they use their fingernails. Some, like R.A. Dickey, use two fingers instead of three.

This grip allows them to throw the ball more with very little top spin.

ROTATION

Ideally, the ball will only rotate one-quarter to one-half of a revolution between the pitcher and home plate. This slow rotation makes the ball unstable.

The fingernails of the index and middle fingers are pressed just below the seams of the ball.

THE BREAK

When the ball's stitches rotate into the airflow, it creates increased air pressure on one side of the ball, knocking it off course in the direction of the turbulence. The side this occurs on is almost impossible to predict.

When releasing the ball, the wrist stays stiff. It does not snap.

This prevents rotation of the ball.

Instead of throwing the ball, push it forward by extending the fingers straight out.

Associated Graphic

TRISH McALASTER / THE GLOBE AND MAIL SOURCE: WASHINGTON POST, NEW YORK TIMES

Blue Jays starting pitcher R.A. Dickey warms up in Dunedin, Fla., on Wednesday.

NATHAN DENETTE/THE CANADIAN PRESS

A national holiday built on 10 hours of talking
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By JAMES BRADSHAW
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Monday, March 2, 2015 – Print Edition, Page S1


The band is getting back together at TSN. Among the tricks the sports network used to sustain interest in the doldrums of last year's daylong NHL trade deadline broadcast were interludes where musician Lester McLean strummed a guitar and sang songs about players and deals. When Calgary Flames president Brian Burke beamed in for an interview, McLean serenaded the gruff executive.

"Oh, we've been watching and trust me, he's the highlight so far," Burke quipped to host James Duthie.

Hockey's trade deadline, set for 3 p.m. (all times ET) on Monday this year, is a broadcasting oddity. Over the past decade it has grown into an all-day spectacle with dozens of hosts, analysts, former players and executives minutely dissecting even the most minor swap of a spare defenceman for a minor-league forward. And its expansion can be traced, at least in part, to the singular way it pits the country's two biggest sports networks, Sportsnet and TSN, against each other in live competition.

There is undoubtedly an audience. But more often than not, the viewer's appetite for action has far exceeded what's on offer. General managers have been pulling the trigger earlier, sealing deals outside the pressure cooker of the deadline, and last-minute blockbusters are getting fewer and farther between. As a result, the appeal is increasingly in the unscripted moments when hosts take phone calls on-air or crack jokes off the cuff. It's drama, but delivered with a wink.

So McLean and his guitar will be back in studio again on Monday for another deadline-day marathon.

"It's almost become a parody of itself, and we realize that it's silly, but we still love it," Duthie said of the coverage. "I said to my bosses a couple of years ago, this is the only event that we hype more every year and it delivers less and less."

What began years ago as a series of updates interrupting regular programming morphed into an hour-long special, then grew to four hours, and kept expanding. Today, both Sportsnet and TSN have blocked off 10 straight hours of live coverage.

And they are throwing as much firepower as ever at the day, firm in the belief that it is circled in hard-core fans' calendars - "because TV made it that way," said Gord Cutler, senior vice-president of NHL production for Rogers Media, the parent company of Sportsnet.

They're not wrong. At any given moment on last year's deadline day, more than 300,000 people were watching the two networks on TV, and that's not counting those streaming the broadcast online to sneak a peek while at work. Most were aged 18 to 49 and, anecdotally, some even called in sick to stay home and watch. Four million viewers tuned in to the two broadcasts at some point to see 20 trades involving 38 players. And yes, Martin St. Louis was dealt, but for the most part a series of unknowns such as Calle Jarnkrok or Matt Taormina traded places.

"It basically became our equivalent of election night," said Mark Milliere, senior vice-president of production for TSN. "Like an election, we just kept adding analysts."

The first trade isn't usually sealed until around 11 a.m., but the networks both hit the air at 8 a.m., with radio shows setting the stage hours earlier. Each will have dozens of analysts and reporters at the ready, who will spend much of the day waiting, speculating and working the phones for any nugget of news.

The wisdom of wall-to-wall deadline coverage is up for debate. TSN has been the ratings leader by a wide margin for the past five years, drawing an average audience ranging from 187,000 to 256,000 viewers - three to four times Sportsnet's averages of between 60,000 and 97,000. The program has become so much a part of TSN's DNA that when it built its current studio in Agincourt, Ont., "very much in our mind was ... how will this look on trade deadline day?" Mr. Milliere said.

His rival seems more skeptical.

"I don't necessarily believe that the networks need to be on all day, but that's a legacy piece that's existed for the last number of years," Cutler said. "It's like a national holiday."

Still, the competitive fires are stoked again, this year more than usual, as Sportsnet looks to nar..

row the gap. After inking a 12year, $5.2-billion deal to become the NHL's national broadcast partner, it enters the day with a new studio, a larger and more loyal hockey audience and an expanded on-air roster.

"It's our first year where there wasn't that feeling of being the underdog," said host Daren Millard, who anchors Sportsnet's coverage on Monday. "There's a real renewed excitement about this trade deadline from our group as a team that, in a large part, has gone through a trade deadline themselves and been assembled in the last year."

The way the networks cover the deadline is also changing. More people are keeping tabs online and on smartphones - the 2014 edition was among the biggest days for digital traffic at both networks - and social media has become an influential intermediary. Teams and players now often break trades on Twitter, beating network insiders to the punch.

Once news is out, the social network is "sort of like the soundtrack to these moments," said Christopher Doyle, director of media partnerships for Twitter Canada. Last week's trade that sent struggling Maple Leaf forward David Clarkson to Columbus - an intriguing deal but hardly a kingmaker - generated 190 tweets a minute as interest peaked.

As a result, "the breaking of a trade has become less important to responding, to how you analyze the trade," Millard said.

The networks are still sometimes the first ones to tell a player he's been dealt, and the reactions can be deeply human.

"You do [have to] remember that lives get changed, that kids get pulled out of school and wives are crying, and it is tough on the players," Duthie said.

Household names such as Evander Kane and Jaromir Jagr changed clubs early this year, whittling TSN's list of the top trade bait to the likes of Jeff Petry and Zbynek Michalek. But even the remote potential that a star could be packing his bags for the right price - a Phil Kessel or Taylor Hall - can generate a thirst for hockey talk, which is currency to sports networks.

"The reality is, if we had no trades at all, we could still fill the 10 hours," Duthie said. "It's all about the possibilities, right?"

Sport need not fear change, because it isn't the sport that matters any more
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The new proposition to move the 2022 World Cup to winter - in Qatar! - is proof of the insanity
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By CATHAL KELLY
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Wednesday, February 25, 2015 – Print Edition, Page S1


ckelly@globeandmail.com

In another triumph for the entertainment business, they decided on Tuesday to ruin the World Cup. And no one cared.

One seriously wonders whether sport has reached a point where nothing can derail it. Despite our constant moaning about its many problems, is sport now too big to fail?

Given the way its officials carry themselves, that's certainly FIFA's take.

On Tuesday, world soccer's governing body lurched toward the end of a farcical four-year-long process, as a task force recommended the 2022 World Cup be moved to winter. Just this once.

There were five bids for that tournament. Four very good ones - the United States, Australia, Japan and South Korea - and one terrible one - Qatar.

FIFA's own investigative committee labelled the Qatar bid "high risk."

Of course, Qatar won in a walk.

There was a substantial problem. Summer temperatures were expected to hit up to 50 C on the scorching fields of play. That's hot enough to melt roads.

Leaning hard on the idea that the tiny, oil-rich country could fund Interstellar-level sci-fi vanity projects, it was suggested Qatar would "air condition" open-roofed stadiums. No one ever said exactly how.

We were left to believe that, with unlimited resources, there were unlimited possibilities.

It's a romantic notion. Even if they'd managed it, most people would've succumbed to heat exhaustion and death in the parking lot, but it sounded cool.

I'm going to miss seeing them try it. Well, almost.

Once the formality of a full executive committee vote is over in a few weeks' time, they'll play the 2022 World Cup in November and December. The tournament will be shortened, and run right up on top of Christmas. It'll be a disaster for most of the world's domestic leagues. The competitive consequences will spin out for years afterward.

In a rational market, customers would be outraged. Over low, constant heat, that outrage would eventually reduce to apathy. A chunk of them would move their attention and money elsewhere.

That isn't happening here.

Rather the opposite - the outrage is making people more interested in this event.

Qatar is a senseless boondoggle, built on shifty oil money and the bodies of itinerant workers.

In terrible conditions on World Cup-related construction projects, migrant labourers are dying at a rate of one a day, humanrights organizations say. Yet the conversation this morning is largely, "How does a shift to winter affect Country X's chances?" We're all happy to be led wherever they take us, however deep and dark, as long as it ends in the moist embrace of televised entertainment.

If the past 10 years in sport have a theme, it is this: The fan does not care what you do. He doesn't want your product any more. He needs it, compulsively.

Through its advertising, the NFL tries to sell the idea that it isn't religion or culture or shared experience that bind American families. It's football. The scary thing? It may be right.

That's what makes the NFL so resilient to scandal. It isn't a hobby for its viewers. It's a cornerstone of their very real lives. It's the same case for soccer over most of the rest of the world.

Once that's true, you can do just about anything. And by "just about," I mean "anything."

Kill the athletes. Kill the workers. Kill the idea that this is all on the up and up. Make the whole thing as unpalatable as possible. But wrap it in good-versus-bad storylines and high-end production, and we will keep coming back.

We'll complain. (We do love to be seen - chalky-handed and no need of a rope - climbing to the high moral ground.) But we won't really care. Not enough to turn off the game and pick up a book instead.

Reporters will still be there.

People will still come. Billions will still watch.

Why? Because sports - especially the major events - create a simulation of community. Social media have exponentially expanded that misperception: "I'm watching the big game with hundreds of my friends."

No, you're watching the big game alone with a computer in your lap. But it doesn't feel that way.

For those who control the game, this is a profound conceptual barrier to pass through, and it's ongoing.

The reason sports executives and the money men who back them aren't constantly tinkering with their product is the fear that if they make too many side-toside moves, the trailing customer loses his way.

Several sports - hockey and baseball leap immediately to mind - could use technical overhauls. You could make 10 suggestions off the top of your head that would make them far more compelling to watch.

Everyone hides behind heritage, and no one does anything for fear that sudden change costs you a quarter of your market share.

FIFA and the Qatar World Cup are proof you don't need to leave breadcrumbs for people to follow. If you're a major sport, you could dig a hole, get inside and pull the earth in on top of you. A few days later, you'd be discovered by fans.

That's neither good nor bad. It just is. Sport need not fear change, because it isn't the sport that matters any more.

The only purpose of the game is as a rallying point. It's where the masses converge. The finer details of the product on the field/diamond/ice are beside the point. When and where it happens doesn't matter. Who it hurts has no bearing on anything. All it need be is properly packaged.

In Rome, they gave people bread and circuses, because they needed both.

In the modern, developed world, we have bread, but it's the circus that keeps us together.

Follow me on Twitter: @cathalkelly

ONE WRONG MOVE, ONE RUINED SEASON
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The Blue Jays will be hard-pressed to find a replacement in the outfield after Victoria native Michael Saunders tears the meniscus in his left knee. Robert MacLeod reports from Dunedin, Fla.
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By ROBERT MACLEOD
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Friday, February 27, 2015 – Print Edition, Page S1


Michael Saunders, the auspicious Blue Jays' starting left fielder, made one wrong move on his field of dreams and left his season in ruins and his baseball club wanting in the outfield.

Saunders, the 28-year-old from Victoria, suffered an embarrassing knee injury Wednesday, when he stepped on an exposed sprinkler head in the outfield while catching balls. He tore the meniscus in his left knee and will require surgery that will likely keep him out of the lineup until July.

"We won't be using that outfield any more," Toronto manager John Gibbons intoned here on Thursday, referring to one of the baseball diamonds at the Bobby Mattick Training Center, where the Blue Jays conduct their spring training workouts.

The sorry saga has thrown the Blue Jays off their plans. Their starting outfield is suddenly Jose Bautista in right, with your best guess in centre and now in left.

Gibbons was asked to list the potential candidates he is now considering to play in left field during Saunders's absence.

"Just go through the roster," the manager said. "If it says outfield by his name, put his name in there."

Gibbons said one of the players the Blue Jays will consider using there is Danny Valencia, which would seem a bit of a stretch.

Valencia spent time at both first and third base last season but has yet to patrol the outfield during his five years in the majors.

Dig a little deeper and you'll find that Valencia played a little outfield in 2013 at the Triple-A level - four games in left and one game in right. That is the extent of his outfielding résumé.

Chris Colabello, who was selected off waivers from the Minnesota Twins by the Blue Jays in December, will also get a look, the manager says.

Colabello has 30 games of experience patrolling the outfield, all of them in right.

The leading candidate will likely be Kevin Pillar, who was battling rookie Dalton Pompey for the starting spot in centre. At the very least, the injury to Saunders means Pillar makes the team as the fourth outfielder.

Saunders was shagging fly balls on the field in question during an optional workout for position players on Wednesday morning. The first official workout for position players will take place on Friday.

He was in left field and casually loping to make a catch when he wrenched his left knee after stepping on the sprinkler head.

And he heard something pop.

"Just kind of lightly jogging after a ball and hit a sprinkler head and my foot got jammed," a dejected Saunders, propped up on crutches, said outside the Blue Jays clubhouse at Florida Auto Exchange Stadium.

"To be honest, I don't know exactly how it happened. It stopped me in my tracks and I heard a pop. I was almost scared to find out, so I just kind of did my best to get off the field and try to not draw any attention to myself until I saw the training staff."

The sprinkler heads are recessed into the ground and can be hard to see.

When he first learned of the injury, a disbelieving Alex Anthopoulos, the Blue Jays' general manager, headed over to the field for a first-hand inspection.

"Just wanted to see where it was," Anthopoulos said in an e-mail, adding that a grounds crew will take a look at the sprinkler system to ensure it is safe for the players.

"Just one of those things," Anthopoulos said earlier in the day in an interview. "Bad luck, tough loss, but we'll get through it. And he will be back."

Although Anthopoulos said he hopes to fill the opening in left internally, he didn't waste any time hitting the phones to see who might be available in a trade.

And he has a pretty good bargaining chip in catcher Dioner Navarro, who is unhappy in his role as backup catcher to Russell Martin and has requested a trade.

"I actually started making some calls [Wednesday night] with respect to seeing who else could be out there," Anthopoulos said. "There are some teams out there with some outfield depth.

"The one thing is if we do something it would be toward the end of spring. We'll see what we have here internally first. But we'll still be openminded about going outside."

The injury has devastated Saunders, who was excited about the prospect of playing in his native Canada after the Blue Jays obtained him from the Seattle Mariners in exchange for pitcher J.A. Happ during the offseason.

Saunders is a left-handed bat with some pop who hit .273 with the Mariners last season.

He also provides good speed on the basepaths.

Wednesday night "was really tough for me, especially when we got the prognosis," Saunders said. "Nobody's more excited to be here than me."

He believes the mental hurdles will be harder for him to overcome than the physical battle he will face recovering from knee surgery.

"I know I'm going to be okay," he said. "It could be worse. It's not an ACL [anterior cruciate ligament]. We double-checked on it, so that's a positive.

"My goal is to be in majorleague games by all-star break and hopefully sooner."

The Blue Jays' first game of the spring training schedule is Tuesday against the Pittsburgh Pirates in Dunedin. Gibbons said he is leaning toward Aaron Sanchez to make the start.

Associated Graphic

Jays outfielder Michael Saunders leaves the clubhouse at spring training in Dunedin, Fla., on Thursday. The 28-year-old was shagging balls Wednesday morning when he stepped on a sprinkler head and injured his knee.

NATHAN DENETTE/THE CANADIAN PRESS

The would-be star, toiling in obscurity
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By DAVID EBNER
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Friday, February 20, 2015 – Print Edition, Page S1


VANCOUVER -- As Andrew Wiggins became a teenage basketball phenomenon, there was another potential star by his side: Xavier Rathan-Mayes.

Among the many times they were on the court together, Wiggins and Rathan-Mayes helped lead Canada in summer, 2012, to a bronze at the under-18 FIBA Americas tournament, Wiggins sinking 15.2 points a game, Rathan-Mayes right behind at 14.8.

Their ascent in basketball, however, split the next summer, when Wiggins began his one year of college ball at the University of Kansas. Rathan-Mayes had to sit out his freshman season at Florida State University, ruled academically ineligible.

In a winter of exile, attending school but unable to practise with his teammates, Rathan-Mayes worked with a Florida State staffer to hone his body and game, in the gym several times a day, starting before dawn at 5 a.m. Wiggins starred at Kansas and was picked first in the NBA draft last June.

Wiggins is on his way to rookie of the year. Rathan-Mayes seeks basketball redemption.

"The tough times that I've gone through have made me a better person and a better player today," Rathan-Mayes said in a phone interview from Tallahassee, Fla., earlier this month.

Since he was a boy, RathanMayes was known as a big-talking ace shooter, but his game has been remade at Florida State. He plays point guard and leads the team in scoring and assists, thrust into the primary role after the team's best player, junior Aaron Thomas, was declared ineligible to play in December.

The process has been erratic.

Florida State is 15-12 in the difficult Atlantic Coast Conference but there's a shot to make a run and upend big names in their final four games, starting with a road trip on Sunday to conference rival University of Virginia, the country's No. 2-ranked team.

Contests against the best teams in college hoops have been both a showcase and a struggle. In a Jan. 24 game at the University of North Carolina, Rathan-Mayes poured in 35 points against the No. 15-ranked team as Florida State lost by four to the Tar Heels.

The 35 points were the most scored by a Canadian in the NCAA this season and the most scored against the Tar Heels in North Carolina in nearly nine years.

But on Feb. 9, at home against No. 4 Duke, Rathan-Mayes had one assist and five points on twoof-seven shooting in a threepoint loss.

"We definitely can put together a little resume to give ourselves a chance," said Rathan-Mayes of Florida State's long odds to make the NCAA tournament in March.

The team needs big-time upsets.

They also play host to No. 12 Louisville on Feb. 28. In one ESPN ranking, Florida State is 115th, winless in seven games against top 50 teams, even though they've been close.

While Rathan-Mayes disappeared from the attention of most people, CBC Sports cited him as an "under the radar freshman" last fall.

His coach, Leonard Hamilton, sees the confidence RathanMayes has long exuded. "He believes in himself almost [to] a fault," Hamilton told reporters after Rathan-Mayes hit a gamewinner against Georgia Tech last weekend. "He doesn't lack for confidence."

Tony McIntyre, co-founder of CIA Bounce, the elite Torontoarea club, remembers first seeing Rathan-Mayes around age 10, when Xavier played for Scarborough Blues and McIntyre's son, Tyler Ennis, played for Bounce.

"Great shooter," said McIntyre of his first impression. "On the court with the other team, he's a guy you wouldn't like. If he plays for you, he hits big shots and he talks a little bit - but he's a great kid."

For the 2010-11 high school season, Rathan-Mayes played basketball for a team in North Carolina run by Toronto's Ro Russell, connected with the Christian Faith Center Academy. Several players eventually ran into NCAA Division I eligibility problems, but others did not. Rathan-Mayes thereafter joined Wiggins at a prep school in West Virginia for his last two years of high school - and also joined CIA Bounce.

In a 2012 CBC the fifth estate documentary on Russell that investigated lax standards and questionable academics, RathanMayes was interviewed and said: "Basketball was everything.

That's all we did. School was there but it was basically basketball, nothing else."

Today, however, he expresses no outward ill will - the opposite, in fact. "I'm thankful," said the 20-year-old Rathan-Mayes. "Without those experiences, I don't think I'd be the man I am today."

Rathan-Mayes had known Wiggins since the boys were young - their fathers had both played at Florida State at different times - Mitch Wiggins and Tharon Mayes are two of the best players in school history - and were briefly on the Philadelphia 76ers together in the early 1990s. Both thereafter played in Europe. On CIA Bounce and national teams, the strong bond grew between Wiggins, Rathan-Mayes and Ennis, who was drafted No. 20 by Phoenix last June.

"Everyone has their own path," Rathan-Mayes said. "I'm proud of those guys. Those are my two best friends in the world. These are the things we always talked about as kids, to play in the NBA.

When we talk, I tell them hopefully one day I'll meet them there."

McIntyre has watched a player "rebrand" himself in a season on the sidelines, from shooter to point guard.

"His past experiences fuels him," McIntyre said. "He stuck with it. A lot of kids could have quit. His potential is endless."

Cerf's up
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The man who invented the Internet 40 years ago (sorry, Al Gore) on the future of technology
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By ALEC SCOTT
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Friday, February 27, 2015 – Print Edition, Page P13


He is this era's Alexander Graham Bell.

In the early 1970s, Vint Cerf, along with frequent collaborator Bob Kahn, wrote a paper sketching out a way that different computer networks might speak to one another. By 1975, a group working under Cerf at his alma mater, Stanford, had developed a language to enable the inter-network communication imagined in the paper--and, lo, the Transmission Control Protocol was born. The Internet couldn't exist without its lingua franca, the so-called TCP/IP.

It wasn't immediately popular.

Not until 1985--exactly 30 years ago this month--did a Boston tech company become the first to register a domain name on this new network of networks.

Only five other organizations sought a home there that entire first year. But, of course, soon enough it would experience explosive growth.

Now 71 years old, Cerf still influences tech's direction.

He is Google's Chief Internet Evangelist, and he consults with politicians and policymakers around the world on laws affecting the Net. But little in his storied career can compare to the first time the TCP/IP language helped computers attached to different networks to communicate across vast distances--it was something of a Bell moment.

"There was a van in the San Francisco Bay Area that sent, by radio, an electronic packet to the Arpanet," he recalls, speaking of a primitive wired network developed by scientists with U.S. military funds. "It went by satellite to Norway, then to University College, London, then back by satellite over the Atlantic, through the Arpanet's wires again, and then to computers at the University of Southern California. I mean, it just went from San Francisco to Los Angeles, but it crossed 100,000 miles to do so."

There's still some wonder in his voice. Interviewed in a relatively generic office in Google's Virginia campus, his white beard well trimmed, Cerf is nattily attired in a blue three-piece suit, a formality rare in slovenly tech circles.

He explains that he wasn't always so proper--he operated in the thick of the grubby, anarchic, forever-in-blue-jeans community that came up with many of the key aspects of what would become the Internet in the '70s and '80s. "We depended on input, on a real sense of collaboration," he says. "It was a bit...chaotic."

Then he moved to Washington, D.C. "When I left Stanford to join DARPA"--the Arpanet's administrator--"my wife (1) said I should wear a suit and found some for me at Saks Fifth Avenue. When I testified before Congress, the committee chair sent a note to our director thanking me for my testimony and saying, by the way, I was the bestdressed representative of DARPA they'd ever seen."

This adopted smoothness proved helpful when a competitor to TCP/ IP, the so-called Open Systems Interconnection, emerged.

OSI was popular in Europe--produced, the story goes, in a more orderly fashion by scientists working at the behest of bureaucrats. To many, the protocol felt more secure.

As DARPA's representative, Cerf had the unpleasant duty of attending OSI conferences, biting his tongue, cordially disagreeing that the upstart was all that. "I was the guy forever writing the counter-paper," he says. In those times, the soft-spoken Cerf persuaded many key people that TCP/IP had more going for it--more flexibility, fewer bugs--and the vogue for OSI soon faded.

For a top scientist, Cerf is adept at translating the complex into terms that even the technologically illiterate can assimilate. He makes the present seem comprehensible, the future not so scary.

"Some fairly notable people have worried that artificial intelligence is becoming a hazard to humanity," he says, addressing reported comments by the likes of scientist Stephen Hawking and Tesla founder Elon Musk. "But most AI is being used as a co-operative measure, not a coercive one.

Isaac Asimov's laws of robotics haven't been codified, it is true, but they are generally being observed." (Among other things, the laws articulated in the early sciencefiction author's work ban robots from harming humans.)

One example of humanmachine co-operation Cerf cites is the Google Glass--this, although his company recently decided to take its controversial wearable computer off the market. "The Glass brings computers into ordinary human discourse, with machines hearing and seeing what you are hearing and seeing, and becoming more of a party...participating in the conversation."

If he remains gee-whiz about tech's possibilities--"Imagine, the phone can take an image of a menu written in another language and translate it into yours"--he also grasps common worries. "I'm interested in the Internet of Things, and we have lots of smart-home technology--a Nest Thermostat, a sensor that gathers information about heating, humidity and lighting in each room of our house. (2) That said, the data collected about who's at home, where they are...could be abused by bad guys."

Talk of bad guys leads him to parse the Sony hack. "The issue is not only the information that was released, but the corporate information that was damaged and destroyed." A paradox: Google tries to make its software resistant to such invasions by releasing its coding to the public. "There's a bounty for those who find bugs or potential hazards." This openness, a collaboration with the many, not the few--these are holdovers from the Internet's early days.

What, precisely, does Google ask its "Internet Evangelist" to do? "I push for more Internet--the expansion of broadband, increased access in the developing world, maybe through drones, high-altitude balloons." Cerf has advocated hard for net neutrality, pushing (again before a congressional committee) to stop well-to-do corporations, like his employer, from getting better, faster service than small fry do.

Among Cerf's many awards is one named for Alan Turing, whose early computer helped break the Nazi Enigma code, thereby shortening the Second World War. A fictional version of Turing is, of course, the central character in The Imitation Game, one of this year's Oscar nominees. Cerf is offended at the liberties the filmmakers took with the science. Of course he is. "I felt that the movie under-explained the significance of Turing's work on computing. His postWorld War II contributions were technically as important and perhaps more pervasive than cracking [the code]."

Cerf once said of TCP/IP's early success, "To borrow a phrase, now the Internet could go where no network had gone before." (3) Did he ever think it would go this big, this quickly--this, well, boldly?

"No. So much about it has been surprising. The explosive adoption of the World Wide Web protocols. The growth of hacking, phishing and other hazards.

The hypergolic confluence of the smartphone and the Internet. Some of it, we imagined, yes, but much of it--no."

Growth in internet domain names 1985 6 1990 1,402 2000 21,023,720 2005 46,233,988 2010 91,724,762 2012 106,080,969 1

High-tech cochlear implants have enabled Cerf's artist wife, Sigrid, deaf from age 3, to hear again. Cerf, himself, has a hearing impairment and sits on the advisory board to gallaudet university, a school that has long served the deaf community.

2 Cerf is planning to put radiofrequency ID chips on the bottles in his extensive wine cellar, to enable a quick determination of which vintages are stored where.

3 cerf is part of an international committee of scientists seeking to expand the Internet's reach into the final frontier-space.

Geek Gods The Internet was a crowdsourced invention--a set of innovations extracted from the many by a few thought leaders. Here are five other Internet pioneers.

J.C.R. Licklider Two of this polyglot psychologist's papers changed the world: "Man-Computer Symbiosis" (1960) and "The Computer as Communication Device" (1968).

Bob Taylor A co-author of the latter paper, Taylor ran Xerox's Palo Alto Research Center from 1970 to 1983, a shop that contributed two of the Net's constituent parts, the ethernet and communicative desktops.

Jon Postel and Steve Crocker They initiated the Request for Comment process, a method for seeking input on bedevilling technical problems.

Tim Berners-Lee Working at CERN in 1989, Sir Tim implemented the first communication between a Hypertext Transfer Protocol client and server via the Internet-- which precipitated the development, in 1991, of the World Wide Web.

Associated Graphic

Vint Cerf models his trademark three-piece suit at Google's office in Reston, Virginia Tk caption

PHOTOGRAPH JOHN LOOMIS; (TOP) BRENDAN BURDEN

PHOTOGRAPHS (LEFT) JOHN LOOMIS; (LICKLIDER) COURTESY OF AIP EMILIO SEGRE VISUAL ARCHIVES; (TAYLOR) COMPUTERHISTORY.ORG; (POSTEL) IRENE FERTIK/USC NEWS SERVICE; (CROCKER) FLICKR/JOI ITO; (BERNERS-LEE) BROADIMAGE/REX

Gone in 60 years
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North American society was built around cars. But do services like Car2Go herald a future free of private ownership--and drivers?
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By IVOR TOSSELL
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Friday, February 27, 2015 – Print Edition, Page P20


If we want to look to the future of urban transportation, we could do worse than casting an eyeball on the little blue-and-white cars that are an increasingly familiar sight in North American downtowns.

Car2Go is just the latest in a string of car-sharing schemes, like Zipcar and AutoShare, that have turned up in cities in the past decade or so. But its business model is far different from its forebears, which basically just simplify the traditional process of renting a car. Car2Go is more like a taxi that you drive yourself--and the Daimler-owned service just ticked past the million-member mark globally, with thousands of its trademark Smart cars on roads across Canada.

The nature of car ownership is changing, thanks to a combination of factors: a renewed affinity for city living, the revival of public transit, the fact that today's cash-strapped young people simply can't afford to drive. The bottom line: The number of kilometres driven by youth through the early 2000s fell by 25%. Most alarmingly, at least for automakers, is that car purchases by people aged 18 to 34 fell almost 30% between 2007 and 2011.

Car2Go might just be part of a transition away from widespread private car ownership and toward a new form of mass transit. Whereas services like Zipcar allow members to rent cars by the hour and pick them up at designated parking spots--to which they must be returned afterwards--Car2Go's cars don't "live" anywhere. Each one is a freefloating node on a network. Customers use a smartphone app to track down the nearest one and are billed 41 cents for each minute of use. When they're done, they can simply park the car anywhere within a designated "home area" and walk away. (The exception is Toronto, where crowded streets mean the cars have to be picked up and dropped off in designated spots, which has crimped Car2Go's flexibility.) Every node on the network is identical and interchangeable. Daimler built the system on Smart cars, which it builds itself; that allows the company to use its own repair infrastructure, simplifying the process of maintaining the fleet.

The whole scheme would be impossible without cheap, widespread wireless networking and portable computing; a decade ago, the idea of renting cars that might be found who-knows-where would have been absurd. The cars also use their built-in networking to signal roving maintenance crews when they need cleaning (drivers can rate the cars' appearance), gas or repairs.

What Car2Go looks like, in the end, is less a way of renting a car on short notice, and more a fleet of drive-your-own taxis.

They melt into the urban environment, appearing when they're needed to drop you where you need to go, but otherwise occupying no fixed space, and existing in constant circulation.

It's a short hop from a taxi you drive yourself to a taxi that just plain drives itself. Picture it: Using an app, the customer places an order for an automated cab. The system either finds one parked nearby or queues up a lift from one that's dropping off a passenger in your vicinity. The self-driving car picks you up, verifies your identity (perhaps with the tap of a key card), and sets off, billing your credit card as you go.

All of the pieces of this puzzle are here in the form of Car2Go: the networked cars, the payment infrastructure, the roving maintenance, the fleet infrastructure that floats atop the city rather than carving out space in it. The only thing missing is the self-driving car itself--and that's on the way. Self-driving cars are already plying the highways of California, offering varying degrees of automation, from help staying in-lane to complete self-driving capabilities.

Google, one early leader in the industry, is promising that a self-driving car--though not necessarily its own--will be on the market by the end of the decade. Uber, the app-enabled taxi company, has already declared its interest in the technology--the move would do away with all drivers, not just cabbies. Mercedes itself has been testing a self-driving car technology it calls "Bertha," after Bertha Benz, Karl Benz's wife and an automotive pioneer in her own right (in fact, she was his very first investor).

Autonomous driving systems are still expensive and imperfect, and they still face both regulatory and technological hurdles. But when they do arrive, the automated-taxi market will be one of its first targets. Self-driven car share as we know it today will persist, but only as a cheaper, more obstinate option--the stick shift of urban driving. The question isn't whether millennials will end up buying cars. The question is whether, in 10 years' time, anyone will actually drive them.

Associated Graphic

ILLUSTRATION DAN MATUTINA

Saturday, February 28, 2015

THE ALBERTA OIL SQUEEZE
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As the crude price drop wreaks havoc on oil patch producers, suppliers are also feeling the pinch from shrinking sales and demands for price cuts
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By JEFF LEWIS, JEFFREY JONES
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Saturday, February 21, 2015 – Print Edition, Page B1


NISKU, ALTA., CALGARY -- The letters began showing up at Pat Wilson's central Alberta truck shop last month - demands from customers to cut rates in the face of rapidly sinking oil prices.

About 60 per cent of business at Mr. Wilson's Camex Equipment Sales & Rentals Inc. is tied to the battered energy sector, and clients are pressing for price breaks. In one case, Northwell Oilfield Hauling Inc. said it was under pressure from its own customer, Talisman Energy Inc., which was seeking "significant double-digit reductions" in costs, according to copies of the letters.

"For us to be able to accommodate their request, we require price breaks from our suppliers as well," Northwell informed Camex, which supplies trucks and other equipment for moving drilling rigs and had revenue of about $160-million last year.

The demands put Camex in a tough spot, since the company doesn't have much wiggle room as it is. So far Mr. Wilson isn't budging.

"We don't work off that big a margin," Mr. Wilson said. "If they want a 20-per-cent discount, we're not selling it."

The squeeze is on across the Alberta energy sector. Oil companies are slashing costs in a desperate bid to keep the province competitive in a global industry rapidly restructuring to cope with crude prices that have been cut in half in just six months.

For the Alberta oil industry, however, the stakes are higher than most. That's because a large portion of Alberta oil is among the highest-cost crude in the world.

Indeed, much of the Canadian oil patch was built to prosper with U.S. oil prices at $80 (U.S.) to $100 a barrel, or even higher. The question is - can Alberta bring costs down fast enough to stay globally competitive?

The early signs are worrisome. A recent study by TD Securities calculated that the average break-even crude price for the oil sands stands around $47 a barrel. With West Texas intermediate oil currently below $51 a barrel, that leaves little room to make any money. The longer crude prices languish around these levels, the more operations fall out of the money and add to the cost pressures facing Alberta oil companies and the array of supplier and service companies so crucial to the province's economy.

And it puts Alberta at the forefront of a predicament facing a number of higher-cost oil-producing regions as they seek to develop new sources of oil.

"The entire non-OPEC oil industry has been built on and spending on the presumption that oil prices would be $80 or better for the foreseeable future," says Randy Ollenberger, an analyst at BMO Nesbitt Burns Inc. "The challenge for many companies is that even if they have investment opportunities that generate investment returns at sub-$60 oil prices, most don't generate enough cash flow [currently] to fund those investments and their balance sheets have been structured for higher commodity prices. This is the biggest challenge facing the industry."

Anxiety rises

The growing tension on pricing between energy companies and suppliers in regions far from downtown Calgary's head office towers is revealing a deep anxiety in Alberta's dominant industry.

This week, the president of oil sands giant Canadian Natural Resources Ltd. warned that the industry is fast approaching a crisis as stubbornly high costs and sinking crude prices squeeze returns.

"The made-in-Fort McMurray cost structure must change," Canadian Natural's Steve Laut told business leaders in the northern Alberta oil sands centre. "It must change. It is not sustainable. And if we don't work together to make a change, the oil sands industry will fall head first into a death spiral."

What Alberta oil executives fear is an extended run of oil prices far below the triple-digit levels of recent years, as crude sloshes around in oversupplied markets in North America and overseas.

Much of that oil is produced at a far less cost than in Canada.

The TD Securities report shows why. Some producing projects generate returns below the $47 oil level, including Suncor Energy Inc.'s Millennium mining project and MEG Energy Corp.'s Christina Lake steam-assisted development. But others, such as Cenovus Energy Inc.'s Foster Creek venture and Syncrude Canada Ltd.'s plant, require prices above that level to remain in the black while also investing the sustaining capital required to maintain operations, according to TD.

And many new oil sands projects that Canadian energy companies have long been planning have high break-even thresholds.

Cenovus, MEG Energy and other major developers have deferred future expansions until commodity prices can support them. But other projects are plowing ahead, even though the current oil price wouldn't appear to justify them. The $13.5-billion Fort Hills project, being built by Suncor, Total SA and Teck Resources Ltd., for example, needs oil prices above $90 to recoup all its costs and provide a decent return on investment, according to BMO.

Companies proceeding with such projects are betting that over time oil prices will rebound and stay firm. Since they have already sunk huge sums of money into projects, on items such as steel structures, vessels and other long lead-time equipment, they are reluctant to pull the plug, even as markets languish.

"That would be a hard decision to make, because if you go at the oil sands the way you go at a shale oil play, then you shouldn't be in the oil sands," said Robert Skinner, an adviser to companies, governments and universities on energy strategy, and Total's onetime Canadian head. "You've got to be able to sustain the swings in price, and that is the history of development in the oil sands. And it's not for the financially light players."

Indeed, among the hardest hit have been small developers that had hoped to build one or two oil sands projects. Their troubles began long before oil prices sank as they struggled to deal with inflation in labour and materials costs that prompted cost overruns that required additional capital to pay for.

The skid in energy markets only worsened their predicaments.

Among that group, Southern Pacific Resource Corp. filed for creditor protection in January and Connacher Oil and Gas Ltd. was forced to recapitalize with a $1-billion (Canadian) debt-for-equity swap to deal with a looming cash crunch.

'The worst I've ever seen'

In locales like Nisku, a sprawling industrial hub south of Edmonton that serves the oil sands and other energy operations, the downturn is hitting hard.

"This is the worst I've ever seen it," Stephen Dodd, chief executive officer of Steelhead Fabrication Corp., said sitting at his office desk while a deep freeze lingered outside.

Mr. Dodd faces a grim year. Steelhead manufactures the jumbo steel framing that supports pipe used at steam-driven oil sands plants. It had about $7-million in revenue last year, but new business has dried up as producers scrap expansion plans. Customers are now asking for discounts of at least 25 per cent, which erases his profit.

Worse, an expected order of 30 new units recently fell through, shrinking the firm's backlog. The company has enough work to last until May. After that, his 27 employees face an uncertain future. "In six months, I'll be lucky to have four or five," the crestfallen Mr. Dodd said.

"Our No. 1 customer informed us the other day they would be no more in the next four months and we've been servicing them for 15 years, and that's 50 per cent of our business, gone, instantly."

Others are waiting for the axe to fall. "We only get paid for what we work. It's not like we're on salary," Ken Babyak, a long-time driller, said over a lunch at the Pipeline Alley Café in Nisku.

On a snow-covered road south of Edmonton, Rob Thiessen, owner of Little Robby's Pilot Car Service, eyes a flatbed truck carrying the steel skeleton of an oil sands plant.

The giant frame supports a tangle of pipes and valves designed to lift tar-like bitumen from underneath northern Alberta's boreal forests. Mr. Thiessen's business is marshalling loads of equipment hundreds of kilometres up a series of highways to production sites. The procession is a rare one these days; fewer are making their way north from this region as oil sands activity slows, cutting demand for Mr. Thiessen's services.

He charges $75 an hour for each truck that travels with the shipments. Sometimes they require up to four escorts. Competitors have cut rates. "But we try not to, because it's just too hard to get them back up afterwards," he said.

Outside the oil sands, oil and gas field activity has also slowed.

This week, 317 drilling rigs were operating in Western Canada, just 41 per cent of the industry's total fleet, according to the Canadian Association of Oilwell Drilling Contractors. That compares with 576 rigs, or 71 per cent of the fleet one year earlier.

Assuming an average of about 20 workers are tied to a rig, that translates into about 5,200 fewer rig workers in the field. As a result, companies that specialize in moving rigs from one drilling site to another have seen their businesses dwindle during what is normally the busiest season.

Family-owned K&C Oilfield Hauling Ltd. has already cut rates and shuttered a location in Lloydminster, Sask., amid the steep drop in field activity. What remains are fewer jobs for less pay.

"Put it this way: An $80,000 rig move you're offering for $40,000, and you're still not getting" business, said K&C's operations liaison Brad Herrle.

Cuts in drilling are affecting business at heavy crude oil operations in areas such as Lloydminster, says Brook Papau, vice-president of energy research at ITG Investment Research. But there are also fewer wells being drilled in some of the oil-shaletype plays that companies have had rich success with in recent years, including the Saskatchewan Bakken and Pembina Cardium. That's where debt-hobbled producers such as Lightstream Resources Ltd. and Penn West Petroleum Ltd. have severely curtailed activity.

One mitigating factor that could eventually bring rigs back to the field will be reductions in drilling costs as contractors reduce their rates to keep operating. Mr. Papau reckons the cost to drill and complete a multistage, hydraulically fractured well, the preferred technology in those regions, could fall by up to 20 per cent.

"If you believe in the higher end of that spectrum of cost reduction, you'll see some return to normalcy," he said. "Absent of the cost reduction, you're going to see a significant decline in activity."

Hoping for a price recovery

Some industry players and politicians still insist the downturn is a short-term correction. But several forecasts, as well as the longerterm futures market, currently call for crude to remain suppressed below $70 (U.S.) a barrel, which points to a much leaner Canadian oil industry than has been the case in recent boom years.

It was an abrupt shift. As recently as last June, the sector was riding a wave of high oil prices, attracting a surge of capital through equity issues and initial public offerings and plowing the money into drilling and acquisitions of assets and other companies. Earlier, many companies even reaped rewards from a big spike in natural gas markets as demand for the heating fuel skyrocketed due to last winter's polar vortex.

Cracks in the energy complex began to appear as the year wore on, though, as production of shale oil in the United States hit successive monthly records, reducing the need for imports from the Organization of Petroleum Exporting Countries and other suppliers. At the same time, economies in Europe and Asia began to look shaky, raising fears about energy demand. World oil prices started to slide.

By November, U.S. crude had fallen into the low $70s a barrel before Saudi Arabia and the other members of OPEC gathered and then refused to lower production to rescue prices while competitors such as the U.S., Canada and Russia pumped full out. The combination triggered a freefall that not all analysts are convinced has ended. The new reality for markets is that OPEC appears to have dug in to protect its market share at seemingly any cost.

Prices fell as low as $44 or so, but have recently crept back up modestly above the $50 mark.

Eventually, lower prices are bound to result in output declines in Canada and around the world, and increased demand for petroleum products as they become more affordable, says Garey Aitken, chief investment officer at Franklin Bissett Investment Management. "However, this can take time to play out and sentiment is currently very negative," he said.

In Alberta, which derives more than a fifth of its revenue from the energy sector, Premier Jim Prentice has warned of a $7-billion drop in revenues in the next budget, a shortfall he says requires an overall public spending reduction of 9 per cent. In recent days, he has announced the closing of three foreign offices and the government has raised the prospect of reinstating health care premiums for the first time in six years.

Last week, Canadian Imperial Bank of Commerce said the province is at risk of slipping into recession due to the massive drop in capital spending in the oil patch. Job losses that have been made public so far - by companies such as Suncor, Cenovus, and Trinidad Drilling Ltd. - number in the thousands.

The slowdown has quickly trickled down into real estate markets, with new house listings in Calgary jumping by almost 40 per cent in January versus the year before and sales down by 35 per cent to the lowest level in seven years.

Investors in energy shares have also been hurt, as the low oil price crimps the cash flow of oil producers. Since climbing to a recent high last June as crude prices hovered well above $100 a barrel, the S&P/TSX energy group is down about 32 per cent, after falling as much as 40 per cent in December.

For investors to recoup those losses, energy companies must first show they can transform themselves into leaner, lowercost players in the global arena without relying on a big rebound in crude prices.

Spread out across 52 acres of prairie about 20 minutes west of Edmonton, workers are putting the finishing touches on several steel modules bound for Canadian Natural's delayed Kirby oil sands expansion.

The industrial yard's owners, Supreme Modular Fabrication Inc.

and Fluor Corp., say it's possible to knock as much as 20 per cent off the cost of developing such projects by standardizing construction processes and improving labour efficiency with legions of skilled tradespeople anxious to get back to work.

It's one example of the kind of cost savings the energy industry will need to compete in the difficult new reality of lower oil prices.

As Steelhead Fabrication's Mr. Dodd says: "It's going to be a tough go for quite a while.

Associated Graphic

Pat Wilson, CEO and president of Camex Equipment in Nisku, Alta.: 'If they want a 20-per-cent discount, we're not selling it.'

AMBER BRACKEN FOR THE GLOBE AND MAIL

Workers stack pipe in the yard at Trinidad Drilling in Nisku, Alta.

PHOTOS BY AMBER BRACKEN FOR THE GLOBE AND MAIL

JOHN SOPINSKI/THE GLOBE AND MAIL SOURCES: TD SECURITIES INC.; CAPP; BLOOMBERG

A welder works in the shop at Steelhead Fabrication Corp. in Nisku.

Driller Ken Babyak in Nisku: 'We only get paid for what we work. It's not like we're on salary.'

A rig is set up in Precision Drilling's yard in Nisku, Alta.

Stephen Dodd, CEO of Steelhead Fabrication Corp. in Nisku, Alta.: 'This is the worst I've ever seen it.'

Oil plunge forces North Sea retreat
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By ERIC REGULY
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Saturday, February 28, 2015 – Print Edition, Page B1


ABERDEEN, SCOTLAND -- In a seaport city renowned for its stout, grey granite buildings, the new headquarters of EnQuest PLC stand out like a great white whale. Eight storeys of gleaming stone and glass, it's a veritable skyscraper by local standards and dominates a rundown waterfront area once filled with fish processing plants.

But the building is already a victim of oil's plunge, which is clobbering the North Sea oil industry and shredding thousands of jobs. In an effort to preserve capital, EnQuest, the biggest independent producer in the North Sea's British side, is selling the building even before it's occupied.

"The North Sea was struggling even at $100 [U.S.] oil," EnQuest chief executive officer Amjad Bseisu says from his London office. "I think we're in a defining moment for the North Sea. We could either see precipitous decline or the industry will have to reinvent itself."

In Aberdeen, Neil McCulloch, 44, president of EnQuest's North Sea operations, says there is no way the new office, which will be leased back after it's sold and house 500 local EnQuest employees, would have passed budget muster with Brent crude oil at $60 a barrel. "We would not build our new building today," he says.

The building was approved in 2013, when the North Sea, in spite of its relentless production decline, was buzzing with hope and activity. Oil was over $100 and new players with fancy technology, such as horizontal drilling, were squeezing torrents of oil out of old fields abandoned by the big companies. Wealth was washing through Aberdeen, a one-industry wonder where drilling-industry helicopters fill the skies, new shopping malls are stuffed with Italian fashion shops and Mercedes taxis are ubiquitous.

But it was a mirage, because the North Sea is one of the global industry's most expensive production areas.

The plunge in oil prices since last summer - down about 50 per cent - is especially damaging to North Sea producers because costs had been allowed to climb to outrageous levels.

Mr. McCulloch estimates that industry-wide operating and capital (or development) costs per barrel quadrupled over the past decade, but he has no easy explanation for the relentless rise.

Euan Mearns, the independent energy analyst and geologist in Aberdeen who writes the popular Energy Matters blog, thinks the recent North Sea boom was really a wages-and-employment boom disguised as an oil boom. "As the oil became more difficult to get at, it became more expensive," he says. "Costs soared and employment went up, partly because of aging infrastructure. More maintenance workers were required and there was a manpower shortage."

A report released Tuesday by Oil & Gas UK, the industry lobby group that has been pushing the Westminster government for a lighter tax and regulatory regime since prices collapsed last fall, highlights the cost gusher. In 2014, North Sea operating costs rose 8 per cent to £9.6-billion ($18.5-billion), equivalent to a record high of £18.50 a barrel.

The figure excludes capital costs, which could easily match or exceed the operating costs, depending on factors such as the geology of the field and its depth.

As a rule of thumb, North Sea operators need oil of $60 (U.S.) or more to break even, meaning the British sector as a whole is struggling to stay out of the red at current prices, even if disciplined oil companies can make money on some of the prolific fields (as fields deplete, costs rise).

The oil drop inflicted a lot of damage last year even though prices did not start to decline until June and did not fall off a cliff until November, when the Saudi Arabia-led Organization of Petroleum Exporting Countries refused to cut production to prop up prices. According to Oil & Gas UK, revenues in 2014 fell to £24billion, their lowest level since 1999. Add rising costs into the mix and the "basin," as it's called, last year recorded negative cash flow of £5.3-billion, the worst since the 1970s. Barring a snap-back in prices - unlikely given the Saudis' resolve to nab market share by choking off expensive production - 2015 is bound to be even more painful.

"The industry recognizes that its cost base is unsustainable," says Malcolm Webb, CEO of Oil & Gas UK. "Cost and efficiency improvements of up to 40 per cent are required to give this basin a viable future. This adjustment is now under way, but cost alone is not the answer."

The North Sea is not the gift that keeps on giving. Production began in the mid-1970s and rose sharply over the next two decades, financing Margaret Thatcher's British economic overhaul as manufacturing and mining gave way to oil and gas and banking. By the mid-1980s, total British production, almost all from the North Sea, hit 2.7 million barrels a day.

It later dipped, as prices fell, then rose again, reaching almost three million barrels a day at its 1999 peak. Foreign companies joined the oil rush, including some of the biggest Canadian industry names - Nexen, Suncor, Talisman Energy and Canadian Natural Resources. Since then, production has been riding the down escalator, dipping to 1.4 million barrels last year, though the figure could rise slightly as projects that were committed before the price collapse reach completion.

The output plunge is only part of the story. Capital spending was climbing relentlessly as more effort was made to try to slow the North Sea's decline. Expenditures went from £5.2-billion in 2008 to £14.8-billion in 2014, a lot of it due to project cost overruns. Operating costs also rose to scary levels, from £4.5-billion in 2004 to £7.8billion in 2012 and last year's £9.6billion.

Rising oil prices can hide a lot of spending sins. But when prices go into reverse they are fully exposed. Returns are now getting obliterated; "margin compression," to use the analysts' argot, is now under way. As a result, North Sea oil companies are whacking down costs as fast as they can while they pray the Saudis lose their nerve and cut production.

Gordon Mutch, owner of a wellmanagement business in Aberdeen called GDPM, says, "I don't know anyone looking to commit projects at these prices."

His friend Jo McGregor, director of McGregor Consultants, an agency that finds drilling and engineering professionals for oil projects worldwide, says Aberdeen has battled its way through several downturns, but that "this one feels different" because the price was rude enough to fall in the absence of a recession and OPEC, by not cutting output, is no longer following its once-predictable script. "People here are really scared," she says.

EnQuest, to take but one company, has cut its 2015 capital expenditures by 40 per cent, to about $600-million (U.S.) and has squeezed operating costs by 10 per cent, partly by insisting that its top 30 or so suppliers reduce their prices by 10 per cent to 15 per cent. Labour is next. The oil companies are pushing for a "3:3" contract, meaning the offshore drilling and production workers would work three weeks followed by three weeks off instead of the standard two weeks on, three weeks off, or 2:3. In effect, the new system would shave labour costs by 20 per cent.

Jake Molloy, regional organizer in Aberdeen for the National Union of Rail, Maritime and Transport Workers (RMT), says employment levels will plunge as projects are curtailed or cancelled and cost-cutting becomes the industry mantra. The cover of its February union bulletin features an the image of a man holding a bloody straight razor with the title "Death by 1000 cuts."

Of the 30,000 or so offshore workers in the British North Sea, he expects as many as 6,000 to disappear by the summer and fully third to be gone by the end of the year.

Mr. Molloy says a graphic image of the downturn can be found in Cromarty Firth, a natural harbour in the rugged Scottish coast about 200 kilometres northwest of Aberdeen. The firth is where idle mobile drilling rigs are taken.

Some are "warm stacked," meaning their crews are kept on board in anticipation of a quick return to work. Others are "cold stacked," meaning they are shut down before being sent to the great scrap heap in the sky.

Cromarty Firth is filling up with parked rigs and Mr. Molloy thinks half of the 38 North Sea rigs will eventually find their way there, never to emerge again. "This industry is going to shrink," he says. "The speed is incredible and if we get down to $30 oil, it could be terminal."

Associated Graphic

EnQuest, which owns Kittiwake Platform in the North Sea, has cut its 2015 capital expenditures by 40 per cent, and is looking at labour next.

CHARLIE FAWELL

Filling the data gap: Statscan's chief fights back
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By TAVIA GRANT
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Thursday, February 26, 2015 – Print Edition, Page B1


OTTAWA -- It's been a bumpy stretch for Canada's national statistical agency - and now, its chief statistician is firing back over what he says are misconceptions on everything from the quality of its labour force data to the usability of its national household survey.

In a wide-ranging interview with The Globe and Mail this week on income statistics, First Nations labour data, reliability of the national household survey (NHS) and priorities for the agency, Wayne Smith said the quality of Statistics Canada's data is as solid as ever. And despite budget constraints, the agency aims to enhance information-gathering in some areas such as wages, job openings, energy statistics and children's health.

"People somehow think - because they believe the massive budget cuts - that we're sitting here crying in our beer, paralyzed because we have no resources to do anything," Mr. Smith said in an interview at his Ottawa office. "That's far from the case. This is a very dynamic organization."

Statscan has long been regarded as one of the world's top statistical agencies. That reputation has been hurt - for some - amid concerns over the agency's independence and that the NHS is not as reliable as the cancelled mandatory long-form census.

Meantime, monthly jobs numbers are perceived to have become more volatile - a claim Statscan refutes. And last summer, the agency had to make a major correction to its July jobs numbers .

Since 2008-09, "we're down by $32-million" in net terms, he said, adding that the cut is less severe than it seems because it no longer has to pay for some services. Like other government departments, it is facing a budget freeze in the next two years (outside of census spending).

But cost recovery - or funding the agency gets from outside clients to conduct surveys - appears to be improving. "Relative to where we were, we're in a more positive trajectory."

One of the agency's biggest efforts this year is a large new survey on job vacancies and wages - areas that have long been seen as knowledge gaps in labour market information. Statistics Canada received $14-million from the federal government last year to conduct the mandatory business survey, which will have a sample of 100,000 locations.

The job vacancy component will look at which occupations have job openings in particular regions and the portion of vacancies that are difficult to fill. This release will be quarterly, starting in the fall. The wage component will be released annually, starting next year. It will look at starting hourly wages and wage levels offered to fill vacant positions. The purpose is to give a "general sense to workers of where promising job opportunities are available."

Other priorities for the agency are more regular releases on financial security("Wealth is becoming more and more important in terms of understanding well-being," he said) and on GDP by city. It's looking to enhance business innovation and energy stats.

Without more resources or financial partners, expanding in some areas may mean scaling back in others. "We would have to reallocate resources away from existing statistical programs," he said.

Low-income trends and income distribution are a data gap the agency intends to fill. Currently, 2012 data on low-income trends are not comparable to prior years, while the agency has cautioned about long-term comparisons on income trends in the national household survey.

For now, he said insights into long-term income trends won't be published as a full-time series until later this year - likely after the next federal election.

"Because of various changes in the statistical system, we're temporarily not able to make the kinds of comparisons that we would like to. We will have resolved this problem by the fall of this year," though it could take until November or December.

This lag is a concern to those trying to analyze income trends.

"It's very disappointing to say the least, that we're not going to have the numbers for a more consistent data series on so many important questions before a federal election - there's so much attention to what's happening to the middle class, is inequality increasing, is child poverty increasing, are income gaps between generations increasing - especially the income-inequality issue," said Andrew Jackson, senior policy adviser at the Broadbent Institute.

"I have some sympathy for Statscan in terms of whether they have the resources to put into this ... and I'm glad they're trying to fix the holes, but it's kind of ludicrous that we look at a lot of key questions and we don't really know what's happened since 2011."

Some economists are concerned over the future reliability of the labour force survey (LFS), saying the cancellation of the long-form census makes it more difficult to compile representative samples of the population (the NHS had lower response rates than the long form). Mr. Smith said the LFS sample redesign - now under way - will be based on the short-form census, the new national household survey and tax data.

"The data is very robust for the purpose of the sample redesign. I'm not concerned about it at all, in terms of it having any negative impact."

He said other Statscan surveys won't become less reliable as a result of the change to the NHS.

The agency has no plans to emulate the United States in releasing its payrolls data on the same day as its labour force survey, Mr. Smith said, despite calls from many economists to line up the publication dates.

Instead, the survey of employment, payrolls and hours will still be published with a twomonth lag. Economists have long called for a speedier release date of payrolls data to help them analyze the current labour market and longer-term trends.

Moving the survey to a more timely release date would cost millions more, and potentially leave it more subject to revisions, said Mr. Smith.

"Given the additional cost to the Canadian taxpayer and the additional burden on Canadian businesses in providing the data, I'm looking at it and I'm not seeing anything that would justify it in terms of a better understanding of the current labour market ... I would not be recommending it."

Associated Graphic

Statscan's Wayne Smith doesn't recommend releasing payrolls data on the same day as the labour force survey due to costs.

SEAN KILPATRICK/THE CANADIAN PRESS

Smartwatch maker raises $1-million in less than an hour
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By SHANE DINGMAN
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Wednesday, February 25, 2015 – Print Edition, Page B1


The Canadian entrepreneur who kicked off the modern smartwatch frenzy three years ago has made a triumphant return to the humble crowdfunding platform that launched his company.

It took 49 minutes for Pebble Technology Corp. to set its latest Kickstarter record on Tuesday. In less than an hour, the smartwatch company that hand-made its first devices in a Waterloo, Ont., garage raised $1-million (U.S.) to fund its latest wearable computer, the Pebble Time.

"This is beyond our wildest dream," Vancouver-born Eric Migicovsky, chief executive and founder of Pebble, said in a phone interview. The campaign started at 9:44 a.m. ET, and by 5:30 p.m. had blown past $6.1million with more than 29,500 backers each pledging enough to get one or more of the new watches.

This latest Pebble smartwatch features significant hardware and software updates over the original, and early pledges can earn a $40 or $20 discount on the expected retail price of $199.

Back in April, 2012, Mr. Migicovsky made his first bit of crowdfunding history with a $10.2-million blockbuster campaign for the first Pebble. At the time, he says "We were five guys sitting in a living room here in Palo Alto."

Pebble and Kickstarter have been joined at the hip ever since. This time, however, Pebble faces competition from much larger competitors. Tech giants including LG Corp., Samsung Electronics Co. Ltd., Motorola and Microsoft Corp. have all launched smartwatches in the last year. Apple will soon join them.

The Pebble Time, in development since 2013, has two notable upgrades. The first is a 64-colour e-paper screen that replaces the old black-and-white display, and a microphone has been added for input and quick responses to messages. (It's also thinner, and the watchband is easier to replace.)

The second overhaul reboots the Pebble operating system with a concept that swims against the tide of competitors such as Apple or those using Google Inc.'s Android software: "Apps are not the right way to interact with information on the watch," Mr. Migicovsky said.

The Pebble has about 6,500 custom-made apps and watchfaces (about one-third of which are apps), but the new interface changes their functionality and encourages users to no longer open them one by one.

"If you've got a news app, a sports app, a stocks app, a travel app, you're constantly going in an out of these apps every single second just to find more information - and that's kind of annoying.

"This is a watch. You're not supposed to be spending a lot of time on it."

A new feature called timeline still uses data from apps, but it extracts those bits that are relevant and puts them into a browsable stream that updates throughout the day. Owners can add those parts of their digital lives they want on their wrist using Pebble's companion smartphone app on iOS and Android.

From weather and traffic in the morning or evening, say, or stock market close or open data, even calendar events and reminders.

About 1.2 billion traditional watches are sold every year, and about 23 per cent of those are digital (from the likes of Casio and Timex) according to Gartner wearable computing research director Angela McIntyre.

She estimates five million smartwatches were sold in 2014, against maybe 20 million fitness bands and another 18 million high-end sports watches.

At this point, Pebble could be in the top two or three smartwatch sellers worldwide, Ms. McIntyre says, but as smartwatches eat into existing watch and wristband categories, 2015 could belong to Apple.

"It was strategic on Apple's part to pre-announce in the fall, to put in consumers' minds that something even better was coming," she says. Ms. McIntyre estimates smartwatch sales could top 40 million in 2015, with the Apple Watch accounting for half that figure.

Not everyone celebrated Pebble's return to Kickstarter. A number of news outlets bemoaned Pebble, a well-funded company (it raised $15-million in 2013 and has 130 employees) that just sold its millionth smartwatch in January, using a platform intended for independent dreamers looking for their big break.

"We're a place for creative projects that are in all stages of development. Lots of creators use Kickstarter even though they could get their work out to the public in some other way," says David Gallagher, director of communications for Kickstarter.

Mr. Migicovsky said he was proud to offer his new watch to Kickstarter fans first. "That's the community that got us to where we are today," he said. "We want to do right by our community, so we decided to go back to them and ask them what they thought of our new watch."

On the plus side, experience means this Kickstarter campaign is unlikely to be dogged by delays common to the platform.

"There's no one more ready than us for a big-ass Kickstarter project," Mr. Migicovsky said, adding the first Pebble Time watches will begin arriving in May.

Associated Graphic

Pebble's Eric Migicovsky: 'This is beyond our wildest dream.'

The new Pebble Time will have a 64-colour e-paper screen and a microphone.

In many Canadian cities, unsold condos are stacking up
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By TAMSIN MCMAHON
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Tuesday, February 24, 2015 – Print Edition, Page B1


When the federal government tightened mortgage rules in 2012, overheated condo markets in Toronto and Vancouver were widely seen as the main target.

But little more than two years later, it's many smaller cities that are bearing the brunt of stricter regulations.

Winnipeg, Montreal and Moncton are grappling with a surplus of unsold condo units driven by a surge in new construction and a dwindling supply of first-time buyers in the wake of Ottawa's decision in June, 2012, to limit mortgage insurance to amortization periods of 25 years or less from 30 years.

While deep-pocketed investors in Toronto and Vancouver stepped in to fill the void, the picture has been different in smaller markets where condo sales are driven largely by firsttime buyers.

"It definitely had an effect on first-time buyers," said Paul Cardinal, manager of market analysis for the Quebec Federation of Real Estate Boards.

"What's not really intuitive is that you would have thought the most expensive markets would have been impacted more than the less expensive market, but that's not necessarily the case."

The downturn has been most painful in Quebec, where the boom in condo construction started in 2011 and 2012 as young buyers, armed with cheap mortgages, flocked to the housing market.

Roughly a third of Quebec buyers had taken out mortgages with 30-year amortizations - and that number rose to 40 per cent in Montreal, Mr. Cardinal said. He calculated that the change was the equivalent of raising interest rates by one percentage point.

Similar problems have plagued markets such as Moncton and Halifax, according to a recent housing market forecast from Re/Max. In Regina and Saskatoon, the number of unsold housing units hit a 30-year high, Canadian Mortgage and Housing Corporation said, the majority of them condos.

Winnipeg has also seen a surge of new condo construction since 2012 as builders rushed to cater to new immigrants under Manitoba's provincial nominee program and retirees looking to downsize and spend their winters down south.

Last year was the first time in 30 years that the city saw more multifamily units under construction than single-family homes. The level of unsold inventory has been rising, as have rental vacancy rates, sparking concerns about overbuilding.

"That's something we're keeping an eye on," said Dianne Himbeault, CMHC senior market analyst. "At this point levels are above the five-year average in terms of completed an unoccupied units."

Montreal in particular has been grappling with a glut of unsold condos for the past two years as builders haven't scaled back their plans in the wake of softening demand. The city had a backlog of nearly 3,000 unsold condos last year, yet condo starts in Montreal rose 19 per cent, defying analyst expectations for a slowdown in new construction.

There are now nearly 20 condo sellers for every one buyer in Quebec City and downtown Montreal, well above the long-term average, said Hélène Bégin, chief economist at Desjardins Group.

In Gatineau, near Ottawa, condo prices have fallen 14 per cent, as stricter rules and federal government job cuts have sapped the confidence of new buyers.

Yet despite a rising stockpile of unsold units, prices in Montreal's condo market haven't fallen, rising 1 per cent last year, in large part because developers are choosing instead of offer generous incentives instead of price breaks. "Instead of taking $10,000 or $20,000 off the price, they're offering to furnish it with the whole washer, dryer, dishwasher, stove and fridge," said Realtor Mike Abatzidis of Re/Max Du Cartier.

Desjardins' Ms. Bégin expects to see a slowdown in new construction this year if the city is to avoid a serious downturn in its condo market. "If we don't, the adjustment will be just more painful," she said.

Not everyone agrees. In downtown Montreal, a joint venture backed by Chinese investors recently broke ground on one of the city's most ambitious condo projects, a two-phase, 800-unit project known as YUL Condominiums.

"This is a world-class city which is still not seen as a condo market," said Steve Di Fruscia, CEO of Tianco Group, the Vancouverbased company developing the project with Montreal's Brivia Group. "It's just a question of time to get the local community out of the rental market and into [condos]."

So far the project is 50-per-cent sold, but Mr. Di Fruscia says he confident the city's glut of unsold condo inventory is merely the short-term growing pains of a city whose condo market is still developing.

"We are very bullish on Montreal," he said. "We think it's a great time to plant seeds. We are very hungry for some more real estate in the city."

14% Increase in time condos spent on the market in Quebec in 2014, the second straight year with a 14-per-cent gain.

20:1 Ratio of condo sellers to buyers in Quebec City and downtown Montreal.

19% Increase in condo starts in Montreal in 2014.

Associated Graphic

Montreal is among the cities hardest hit by a downturn in the condo market.

CHRISTINNE MUSCHI FOR THE GLOBE AND MAIL

What's next for SNC
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Speaking to The Globe and Mail on Oct. 7, SNC-Lavalin chief executive Robert Card said he would be 'deeply concerned' if the company was charged with a crime because it would severely hurt the business. And 'if the company can't do business, you really only have two choices. You are going to ... cease to exist entirely, or you are going to be owned by somebody else.'
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By RICHARD BLACKWELL, JANET MCFARLAND, NICOLAS VAN PRAET
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Friday, February 20, 2015 – Print Edition, Page B1


RCMP charges against SNC-Lavalin Group Inc. threaten to severely hurt the company's business - even if it is not convicted.

The construction and engineering firm said Thursday that the charges - stemming from alleged bribes to Libyan officials, and alleged fraud related to a project in Libya - are without merit.

While the allegations have not been proven in court, they are "very damaging for SNC's reputation," said Brenda Swick, a lawyer at McCarthy Tétrault in Toronto who specializes in international trade and government contracting. And if SNC is eventually convicted, it will lose lucrative Canadian government contracts as a result of anti-corruption regulations that Ms. Swick said are "probably the most draconian regime in the world."

SNC president and chief executive Robert Card told The Globe and Mail's editorial board last October that criminal charges would be deeply troubling, and could result in the "dismemberment" of the company, or possibly a sale to a foreign owner.

Just being charged would be so harmful to its reputation that all SNC's government business would be at risk, Mr. Card said.

"We operate on image," he said at the time. "Imagine you are a government official and you are getting ready to award a big contract to a company and they have been charged. You have two other companies that haven't been charged bidding for it ..." Behind closed doors at SNC's Montreal headquarters, Mr. Card is said to have suggested the company could move its headquarters if it falls out of favour in Canada.

"He's said several times that a company like SNC could operate from anywhere in the world, that there's many places that would welcome a company like ours," said one source who asked not to be named. Directors on SNC-Lavalin's board would be against moving the company, the person said. The company was not immediately available for comment.

In a press release Thursday, SNC played down the impact of the charges saying, "there is no change to the company's right and ability to bid or work on any public or private projects."

SNC relies heavily on government contracts for infrastructure and construction projects around the world.

While it operates in more than 40 countries, it earned 66 per cent of its revenue in Canada in 2013, and has many major projects under way for the federal government. SNC's infrastructure investment division specializes in partnering with governments and private companies to work on airports, bridges, public buildings, highways, transit systems and power or water facilities.

Ottawa tightened its anti-corruption bidding rules last year in a move that raised the ire of business groups who argue the regulations go far beyond similar standards in other countries. Under the rules, companies are subject to a 10-year ban on bidding on federal government contracts if they have been convicted of an array of offences, including bribery of a foreign public official.

The ban would also apply if a company pleads guilty and gains a conditional or absolute discharge.

There is little leeway to escape the ban, although the government can make exceptions if work is in "the public interest" in situations such as emergencies or matters of national security, or when there is no other supplier who can provide the goods or services.

While the debarment can't happen formally until there is a conviction, Ms. Swick said, in the meantime just the laying of a charge "has a very, very bad reputational impact." And with some government contracts, she said, the officials making the decisions may have the discretion to reject bidders who are under investigation or who have been charged.

Even SNC's government contracts that are already in place could be at risk. The rules allow the government to cancel an existing contract if a conviction occurs after it was awarded, although it has the right to continue an existing contract with extra "oversight and monitoring measures."

Among its largest projects, SNC is part of the Rideau Transit Group building Ottawa's new Confederation light-rapid transit line, and it is working on a major construction project at CFB Trenton to design new aircraft hangars. The firm is part of a consortium bidding for the federal contract to build Montreal's new Champlain Bridge, one of the largest contracts in Quebec history, worth as much as $5-billion. The winning bidder is expected to be announced at the end of April. Many will be watching the outcome of that process for evidence that SNC continues to hold the esteem of Ottawa or has fallen out of favour.

Some analysts who cover SNC are sanguine about the RCMP charges. Leon Aghazarian of National Bank Financial said he didn't see them as "material" since "we don't feel that new information has come to light here." Maxim Sytchev of Dundee Capital Markets said the market will treat the charges as "yet another cloud over the company's head" but it won't likely alter the penalties SNC will eventually pay for its transgressions. Any penalty less than $300-million "would be viewed positively by the market," he said.

SNC-Lavalin (SNC) Close: $40.63, down $3.08

Falling dollar staves off threat of deflation
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By DAVID PARKINSON
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Friday, February 27, 2015 – Print Edition, Page B1


Slumping oil continues to take a deep bite out of Canadian consumer prices, but the latest inflation report suggests the fall of the Canadian dollar is cushioning the blow and keeping deflation worries at bay.

Statistics Canada reported Thursday that its consumer price index rose 1 per cent from a year earlier in January, the slowest pace since November, 2013, and down sharply from 1.5 per cent in December. On a month-to-month basis, the CPI fell 0.2 per cent in January from December.

The decline was again led by a sharp drop in gasoline prices, which fell 12.4 per cent month over month and 26.9 per cent year over year.

However, the core inflation rate, which excludes the eight most volatile components of total CPI, including gasoline and other fuels, held steady at 2.2 per cent, evidence that the energy price slump still isn't having a deep impact on the country's broader inflation picture. Economists suggested the fall of the Canadian dollar, in response to oil's plunge, may be feeding broader inflation and mitigating the impact of tumbling fuel prices by raising the cost of imported goods.

"Aside from gasoline, there were few signs of weakness in Canadian price trends last month. In fact, the lower loonie's wingprints were all over this report," Bank of Montreal chief economist Douglas Porter said in a research note.

After peaking at 2.4 per cent in October, Canada's inflation rate has been in rapid retreat, driven by the sharp decline in the price of oil. But the core inflation rate, considered a better indicator of broader inflationary pressures in the overall economy, has remained relatively steady and slightly above the Bank of Canada's 2-percent inflation target, the central bank's key determinant for interest rate policy.

Several sectors with heavy import components are showing significant upturns in their inflation, evidence of the impact of the weaker Canadian currency. The big contributor was food, with prices up 4.6 per cent year over year and 1.2 per cent in January alone.

That increase was due mainly to big spikes in the prices of fresh fruit (up 6.6 per cent month over month) and fresh vegetables (up 5.2 per cent), both of which are almost entirely dependent on imports in the winter months. The cost of motor vehicles rose 0.6 per cent in the month, their fourth straight month-to-month increase.

Mr. Porter noted that clothing and footwear prices, "after declining almost consistently over the past decade" thanks to a strong dollar and cheap overseas manufacturing, were up 2.1 per cent year over year.

Over all, seven of the eight major segments within CPI posted year-over-year gains in January. The only segment down from a year earlier is transportation (which includes gasoline), off 5.3 per cent.

On a month-over-month basis, unadjusted for seasonality, five of the eight segments showed gains, led by the jump in food prices.

The only declines were in transportation, down 2 per cent; and recreation, education and reading, off 0.5 per cent. Prices for all energy components of the index fell 6.2 per cent in the month.

Excluding food and energy - two big and volatile components heading in opposite directions - CPI was up 0.2 per cent month over month and 1.9 per cent year over year.

Despite the continued slide of overall inflation, the January numbers were stronger than economists had expected, strengthening the market's new expectation that the Bank of Canada will hold steady on its key interest rate at its monetary policy decision next Wednesday.

When the week began, financial markets were pricing in about a 75-per-cent likelihood the central bank would follow up its surprise January rate cut, of one-quarter of a percentage-point, with a similar decrease next week.

But following a speech Tuesday from Bank of Canada Governor Stephen Poloz, who hinted strongly at a wait-and-see stance for the March rate decision, the markets are now pricing in only a 20-per-cent chance the central bank will cut again on Wednesday. January's stable core inflation helped solidify that view.

"The steady performance in the core measure should allay concerns at the Bank of Canada about inflation expectations becoming unmoored," Dawn Desjardins, assistant chief economist at Royal Bank of Canada, said in a research note.

And Canadian Imperial Bank of Commerce economist Nick Exarhos said the weaker currency should continue to prop up the core inflation number over the next several months.

"Our analysis suggests that pass-through from the currency gradually feeds through to readings on core, with the year-onyear impact peaking 12 months after the shock," he said in a research report. "We don't expect the [core] trend to soften materially from here."

Rise of the tech titans
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The Nasdaq has breached the 5,000 mark for the first time in 15 years. Meanwhile, the faces behind the sector's giants are gaining more than ever
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By TIM SHUFELT
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Tuesday, March 3, 2015 – Print Edition, Page B1


By most measures of wealth and power, the tech sector is one in ascendancy, having assumed a level of influence in the global market and economy not seen since the last tech boom.

On Monday, the technology concentrated Nasdaq composite stock index breached a level once associated with the excesses of the dot-com bubble, as the benchmark broke through the 5,000 mark, capping a comeback many once thought impossible.

There are important differences distinguishing now from the late-1990s, however, with the valuations of the latest era more supported by solid earnings growth.

Also on Monday, Forbes released its annual list of the world's richest people, showing an increasing representation of tech-based billionaires.

Seven of the world's 15 wealthiest self-made billionaires made their fortunes through tech companies, Forbes said. The 15 richest people in tech are together worth $426-billion (U.S.), which represents an 11.6-per-cent increase in wealth over last year.

Meanwhile, this year so far has seen a spike in tech-sector deal making, highlighted by the $16.1billion acquisition of Freescale Semiconductor Ltd. by NXP Semiconductors NV announced Monday. The deal brought transactions in the sector to $52.6-billion so far in 2015, the highest level since 2000, according to Thomson Reuters.

Some of the hottest stories in tech of late have translated into the accumulation of vast riches and advancement in the Forbes rankings.

Alibaba Group Holding Ltd. co-founder Jack Ma doubled his net worth to $22.7-billion with his company's record initial public offering, landing China's richest man the 33rd spot on the list.

Snapchat Inc. co-founder Evan Spiegel made the list for the first time with $1.5-billion. Newcomers also included Uber's cofounders, Travis Kalanick and Garrett Camp, both worth $5.3billion.

In Canada, the rise of the tech billionaires stands out among the mainstay Thomson, Weston, Pattison and Irving families. Joseph Tsai, vice-chairman of Alibaba, saw his wealth jump to $5.9-billion after the IPO - good enough for the fifth spot among Canadians. Uber's Mr. Camp is Canadian, as is PokerStars founder Mark Scheinberg, who found himself on the list for the first time.

Yet their wealth pales in comparison with the highest echelon of tech billionaires. Here are the top five: .

Bill Gates

Once again, Mr. Gates was named by Forbes as the world's richest person, a title he has claimed for 16 out of the past 21 years. While Microsoft Corp. gave him his fortune, he has been paring back his stake, having sold off one-third of his remaining shares over the past year. Still, his net worth rose by more than $3-billion last year. While Microsoft is far removed from its glory days, and its share price well off its 1999 peak, the stock has surged amid a new emphasis on cloud computing and mobile devices, in addition to the persistent demand for the company's Office, Windows and Exchange products.

Larry Ellison

Having founded Oracle Corp. in 1977, Mr. Ellison only stepped down as CEO last September, remaining with the company as chairman and chief technology officer. The tech mainstay has struggled in recent years to generate sales growth and attract new customers. Mr. Ellison talked down the cloud in the early days of the shift to that technology, but the tech giant has since abandoned that bias.

Jeff Bezos

As founder and CEO of Amazon.com, Jeff Bezos built the bestknown retailer in the world by singularly focusing on growth at the expense of profit. Investors accepted the fact as Amazon built its shipping network, and expanded into cloud computing, consumer electronics and original entertainment content. Slowing growth began to weigh on the stock in 2014. But the stock has rallied this year after a stronger earnings report.

Mark Zuckerberg

With 1.4 billion active users worldwide, the sheer reach of Facebook has allowed the company to silence some doubts raised in its early days as a public company. The increased use of mobile ads pushed revenue up by almost 60 per cent last year. With $33.4-billion in personal wealth, Mr. Zuckerberg is the world's richest person under the age of 40.

Larry Page

Utter domination in the online search market has vaulted Google Inc. into the highest ranks of global technology, with a 65-percent market share, according to Forbes. Meanwhile, the company's Android operating system has allowed Google to maintain its stature amid the shift to mobile computing. But Google's stock produced unimpressive returns in 2014.

Associated Graphic

Bill Gates, Microsoft $79.2-billion

Larry Ellison, Oracle $54.3-billion

Jeff Bezos, Amazon $34.8-billion

Mark Zuckerberg, Facebook $33.4-billion

Larry Page, Google $29.7-billion

Jack Ma, Alibaba $22.7-billion

Ottawa's road map to prosperity remains a work in progress
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By BARRIE MCKENNA
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Monday, March 2, 2015 – Print Edition, Page B1


OTTAWA -- bmckenna@globeandmail.com

For a Prime Minister not fond of consultation, Ottawa's 2008 review of Canadian competitiveness remains an aberration.

Compete to Win, the final report of the government's Competition Policy Review Panel, was the product of more than a year of work, 155 briefs, meetings with 150 groups and individuals across the country, and 20 specially commissioned studies.

The report went far beyond competition rules, laying out a comprehensive road map for boosting Canada's economic performance in a globalized world.

Stephen Harper embraced many of the panel's recommendations. He lowered business taxes, aggressively pursued free trade deals and modernized laws on competition, intellectual property and copyright.

Nearly seven years later, however, the report's toughest and most ambitious ideas remain unfinished business, including allowing bank mergers, opening the telecommunications and airline industries to full foreign competition and breaking down trade walls between provinces.

University of Western Ontario Ivey Business School professor Paul Boothe rates the government's progress as "mixed." In a new study for the Canadian Council of Chief Executives, Prof.

Boothe breaks down the competition panel report's 65 recommendations into 78 policy options. Of those, just 23 have been fully implemented. Another 32 remain undone and 23 are partially adopted.

"Much remains to be done if we are to compete to win," Prof. Boothe lamented in the study, being released Monday.

This isn't just about missing check marks on an unfinished agenda. Many of the fundamental problems identified by the panel, headed by former BCE Inc. chief executive L.R. (Red) Wilson, continue to hobble the Canadian economy. Some have worsened - most notably, manufacturers and other exporters are struggling to find a place in global supply chains.

The ultimate goal is to raise Canadian living standards. And that's as relevant as ever.

The recent plunge in the price of oil and other commodities has exposed troubling weaknesses in Canada's economic model. There are too many internal inconsistencies, vital sectors with little or no competition, and a tax system skewed toward income rather than consumption. Alberta's current budget struggles are a prime example of why that's misguided. And why not let municipalities levy sales taxes to fund their pressing infrastructure needs, rather than forcing them to serially beg Ottawa and the provinces for cash?

The vast majority of Canada's industries are open to full competition, domestic and foreign.

That's not the case in airlines, telecommunications and a clutch of other sectors, such as dairy and poultry. The result is that Canadians pay more than they should to eat, to fly and for TV, Internet and mobile phone services - costs that the government rarely bothers to justify.

Prof. Boothe said the government's foreign investment review regime is "in a state of disarray" after its 2012 decision to okay Chinese state-owned CNOOC Ltd.'s takeover of oil and gas producer Nexen Inc., while closing the door on future deals. The policy has created "substantial confusion" and discouraged investment in Canada, he said.

"We cannot afford to be branded as 'closed for business' by the big international capital pools, including those with government backing," he said.

Another key recommendation of the 2008 Wilson report was the creation of an Australianstyle competition council - an independent and non-partisan body dedicated to prodding government to make more coherent economic policy decisions. Mr. Harper would be wise to put it back on his agenda.

With just months to go before the next election, none of the major parties has well-developed economic platforms. That's unfortunate.

The Conservatives seem uninterested in having a serious debate about the country's economic challenges. When the recovery was going well, the government was eager to talk about its "jobs and growth" record at every turn. Now that the economy has stalled, it's doing everything it can to change the subject, preferring instead to fight crime, communism and terrorism.

NDP Leader Thomas Mulcair has vowed to reinstate higher business taxes, while offering targeted relief to small businesses and manufacturers.

The Liberals, under Leader Justin Trudeau, say they will make infrastructure spending the central pillar of their economic policy, but have so far offered scant details.

All three leaders could start by dusting off a copy of Compete to Win.

INVESTIGATION SMALL ISLAND, BIG BET
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If the plan worked out, it was supposed to transform the birthplace of Confederation into the centre of a lucrative online gambling business in Canada. The five-year saga unfolded largely in secret, until it unravelled in securities court. Robyn Doolittle and Jane Taber report from Charlottetown
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By ROBYN DOOLITTLE, JANE TABER
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Saturday, February 28, 2015 – Print Edition, Page A12


John Shane MacEachern worked in finance. His wife was PEI's deputy minister of tourism. Jeff Trainor was a manager at a golf club, and his wife worked parttime at an investment firm in town. The couples lived next door to each other and had kids around the same age. They saw each other nearly every day.

So when Mr. MacEachern learned about a big money-making opportunity, he told the Trainors about it.

Mr. MacEachern was brought in by his pal Paul Jenkins, who'd gotten involved via his cousin, Garth Jenkins, who was dating the cousin of one of the main players, a man named Paul Maines.

The tip making its way around Charlottetown went like this: A U.S.-based tech firm wanted to open some sort of global banking platform on the island and the province was supposedly interested. If things played out the way boosters envisioned, a big payday was awaiting everyone involved.

Mr. Trainor wired $10,000 to Capital Markets Technologies. He was one of 36 islanders to invest a combined $701,030 in CMT.

Even those close to power got in on the gold rush. A Charlottetown lawyer - one of then-premier Robert Ghiz's close confidants - invested $10,000, then later advised the government during a phase of the proposed deal. PEI's conflict of interest commissioner put in $15,000. The premier's chief of staff also had an interest: Records show his wife invested in a dormant shell company that CMT was trying to buy.

The money flowed despite the fact that only a handful of CMT's investors knew the full plan behind the financial hub. Most had no idea that years before CMT landed on the island, the province had been trying to get into the online gambling business. The banking platform, it turned out, was to host an eGaming operation that the province hoped would generate as much as $85-million a year.

The strange saga of how Canada's tiniest province tried to become an international gambling centre played out largely in secret over the past five years.

From its clandestine beginnings to its unravelling in a securities court - the first formal securities case in the island's history - PEI's foray into eGaming has laid bare the overlapping world of business, politics and personal investment in a province of just 145,000 people, where six degrees of separation is more like two, nearly everyone knows someone in power and government operates with minimal scrutiny.

The fact that the plan was illegal - and had elsewhere been used by the Mafia - is one of this story's more mundane details.

The Plan

Barely 50 families live in Scotchfort, a sparse reserve in rural PEI that's bordered by blueberry fields and the Hillsborough River.

It's located about a half-hour's drive northeast from Charlottetown along the Veterans Memorial Highway, tucked behind a gas station and an auto-marine repair shop. Besides the Abegweit First Nation band office, there's not much else in the area.

There would have been, though, if things had gone as planned. This was the proposed ground zero for the gaming hub's servers. Locating the system on aboriginal land was key and here's why: In September, 2008, thenfinance minister Wes Sheridan released a report on the province's gaming strategy. He warned that the rapid growth of unregulated online gambling could threaten PEI's gaming revenue from its racetrack/casino and lotteries - "unless actions are taken." But the problem had no obvious solution. PEI was too small to launch a local eGaming operation. It would have to attract users from outside the island - and that was against the law.

In Canada, individual provinces are free to license online gambling, but only within their own jurisdictions. Trying to launch anything on a national or international scale violates the Criminal Code.

So while PEI had eGaming on its radar, it had no idea how to get in the market. That is, until Sept. 21, 2009, when the man who represents the island's 13,000 aboriginal residents walked into the finance minister's office with a proposal.

Many of the province's aboriginal residents live in poverty, without proper housing or clean drinking water. Elsewhere in Canada, First Nations supplement their resources with on-reserve casinos, but this wasn't a viable option given PEI's size. If a casino was built on Lennox Island, chances are the only people who'd use it would be those living on the reserve.

Native leaders needed to be creative. "Through our research we found out there was a void, if you will, in terms of the regulation of online gaming," said Don MacKenzie, the executive director and legal counsel for the Mi'kmaq Confederacy of Prince Edward Island.

There was already Canadian precedent in Quebec. For nearly 15 years, the Kahnawake reserve outside Montreal has been running an online gambling business without consequence by asserting its right to self-govern. Quebec police spent months investigating the operation in 2001, but ultimately the decision was made to sidestep a thorny debate about aboriginal sovereignty.

Mobsters had also found fertile ground for online gambling on native reserves. When the RCMP arrested more than 90 Montrealbased Mafiosi in 2006 - a probe police called "one of the most important police operations in the history of Canada" - the force released documents that showed organized crime had turned to Kahnawake to maintain the servers for its illegal sports-betting operations.

In PEI, officials knew the plan was provocative, but the province was game - provided it could be studied quietly.

Work started slowly. In the early days, the meetings were limited to Mr. MacKenzie, Mr. Sheridan and his deputy minister Paul Jelley (who has since died).

Initial discussions focused on the basics: How does the money get collected and distributed? What kind of security would be needed? How do you ensure the games are fair? And then, of course, there was the problem of the Criminal Code.

By February, 2010, the trio realized the job was too big to manage in-house. A respected Charlottetown law firm, McInnes Cooper, was hired to stickhandle the file, adding two lawyers and a business consultant to the roster.

This group would later become known as "the gaming committee."

It had a budget of just under a million dollars, but opted to manage the money in an unorthodox way. Instead of having a line item for eGaming research on the books, the province funded the work with a $950,000 loan paid to the Mi'kmaq Confederacy.

The loan was to be repaid out of any future profits from online gambling. If eGaming never materialized, the Mi'kmaq weren't liable. (Later, the finance minister would declare the government spent no money on eGaming.)

The committee typically met a few times a month, most often at McInnes Cooper's Charlottetown office. It became obvious early on that no one on PEI had the technical skills to build a virtual Las Vegas. They would need to find an industry expert.

What the committee didn't know was that on the other side of the ocean, a company called Simplex was looking to expand into North America. Simplex ran a "global transaction platform" in the United Kingdom, a place where high volumes of money could quickly be exchanged on a secure connection - technology typically used by banks.

Nor did the gaming committee know that, on a cloudy March afternoon in 2010, an executive with one of Simplex's primary shareholders was sitting in a Charlottetown pub, just around the corner from McInnes Cooper.

The Pitch

It was supposed to be a casual get-to-know-you lunch at the Pilot House. Paul Maines was protective of his cousin and wanted to meet her new boyfriend, Garth Jenkins, but Mr. Jenkins was a businessman and so was Mr. Maines, so the conversation quickly turned to business.

Mr. Maines primarily worked out of Toronto, but his family was from PEI. He had a summer house on the island. He's essentially a professional deal maker: He parachutes into companies, fixes them up, then goes on his way.

His latest venture involved a U.S.-based tech company called Capital Markets Technologies.

CMT incorporated in Florida in 1995 and was now based in Chicago. It was also on its fifth name, leaving behind RLN Realty Associates, Fintech Group, Gentech Pharma and Netmaximizer.com.

When the company was active, it specialized in e-commerce and operated on the penny stock circuit.

By the time Mr. Maines hooked up with CMT in 2009, it was in disarray, both financially and staff-wise. It did have one very valuable asset, however: a roughly 30-per-cent stake in Simplex, an accredited SWIFT provider, meaning it had a licence to operate on a high-level financial network.

Mr. Maines, a former broker with Morgan Stanley, doesn't look the part of Bay Street schmoozer. He typically prefers T-shirts to ties. Standing 6-foot-4, the 47-year-old looks more like the football player he once was - for the Saskatchewan Roughriders in the early 1990s.

Mr. Maines had also come through some controversy. In 2001, he was terminated from Morgan Stanley for violating firm financing policy. More than two years later, the New York Stock Exchange learned that - before he left the securities industry - Mr. Maines was alleged to have moved clients' money around without their knowledge and to have provided "fictitious" statements to hide the transfers.

These customers were his soonto-be ex-wife's relatives. A stockexchange report summarizing the case doesn't say where the money was going. Mr. Maines was sanctioned for not co-operating with the investigation; the allegations weren't pursued.

"At the time I was young and did not have the assets to fight a U.S. lawsuit," Mr. Maines said.

"This is just an exchange. It's just a club. It's not a regulatory body.

However, in hindsight, it looks very bad on Google and it's something I've had to deal with through my professional life. ... I wish I would have went down and explained."

The meeting at the Pilot House set things in motion. Mr. Jenkins was excited about what CMT was doing and wanted to get involved. His girlfriend (soon-tobe wife) had shares in the company. Mr. Jenkins got in touch with his cousin, Paul, a pharmacist and wealthy entrepreneur who had connections with government.

The pair met up a few months later at a pancake house in Charlottetown and Garth Jenkins told Paul about CMT. By July, Mr. Maines, the Jenkinses and Simplex CEO Philip Walsh were exchanging regular e-mails about how to bring Simplex's technology to North America.

PEI's size and location made it an ideal outpost. It was an hour closer to Europe than Quebec and Ontario and just a short flight from New York. The province's tiny population meant government was correspondingly small and nimble. Big decisions could be made quickly. Operating costs were low and PEI offered lucrative incentive programs - including a 25-per-cent labour cost rebate for new companies.

According to both Mr. Maines and CMT's lawyer Gary Jessop - who at the time was a partner with Blake, Cassels & Graydon in Ottawa - Paul Jenkins suggested CMT would have an easier time doing business on the island if it had a local connection. He recommended setting up a PEI subsidiary of which he would be president.

Records show that, in August, Garth Jenkins invested $50,000 in CMT through a family business, as did his father. Shortly after, Paul Jenkins put in $100,000. On Sept. 10, a numbered company - 7645686, a wholly owned subsidiary of CMT - was incorporated with Paul Jenkins as the sole director. (The evidence - corporation documents, more than a dozen e-mails obtained by The Globe and Mail, interviews with those involved - suggests Paul Jenkins is the person who brought CMT, Simplex and the PEI government together. When things fell apart, according to an affidavit filed during a securities hearing, he would claim he had nothing to do with the company.)

The business operated as Financial Market Technologies, or FMT. When CMT's credibility was later questioned, islanders eyed the different names - Simplex, CMT, FMT and 7645686 - and wondered whether the company was trying to hide something in all those layers. It didn't help that the way CMT went about raising money was also convoluted.

After the Jenkinses came on board, CMT - which people on the island knew as FMT - began promoting itself.

CMT was no longer a publicly traded company, so it didn't have shares to sell. Instead, investors signed "convertible loan" agreements. This meant people would lend CMT money (at 12-per-cent interest) with the understanding that once the company went public those loans would be converted into shares. CMT was looking to do what's called a reverse takeover with a cheap listed shell company. It's a legal shortcut to the stock market - and the company had a target in mind.

That was Revolution Technologies, a Toronto-based technology outfit that had bounced around for decades. Originally set up in British Columbia in 1979 as a mineral and gas company, it was at the moment a business in name only.

With the stock market problem on its way to being solved, CMT ramped up its effort to woo government. In January, 2011, according to an affidavit filed in securities court, Paul Jenkins asked Mr. Maines to help the premier's chief of staff recruit new companies to PEI using his Bay Street "business network." Mr.

Maines said Mr. Ghiz's chief of staff, Chris LeClair, promised him that CMT would be rewarded. "As a result, I was debriefed on a 'gaming file,' " Mr. Maines said in his affidavit. For Mr. Maines, it was an aha moment: The global transaction hub could easily include an eGaming branch.

(One of the firms Mr. Maines says he helped bring to PEI was Virgin Gaming, which the company's CEO, Rob Segal, confirmed. Virgin - which now goes by WorldGaming.com - moved its servers and a call centre to the island.)

Meanwhile, in early 2011, Paul Jenkins pitched the financialservice centre to Brad Mix at Innovation PEI, the province's economic development branch.

He introduced the Simplex crew to Mr. LeClair, the premier's chief of staff - who happened to be a personal friend. With things in motion, CMT's subsidiary bought $4,000 worth of tickets to the Annual Leader's fundraiser at the posh Delta Prince Edward.

"Financial Market Technologies is moving to PEI shortly. In support of the government they have spoken for 4 Premiers Dinners Tickets," Mr. Jenkins wrote in an e-mail to Liberal Party executive director Mark O'Halloran.

The day after the dinner, April 21, 2011, Paul Jenkins made a $30,000 investment in Revolution Technologies, the shell company that CMT was planning to buy. Mr. Jenkins had already bought 100,000 shares in RevTech for $15,001.27.

By the books, the stock was nearly worthless. Shares were cheap. If the company's fortunes changed, though, Mr. Jenkins' investments could be worth a small fortune. Others wanted in.

A week after the premier's gala, RevTech's lawyer, Colin James, received a fax from the chief of staff's wife, Christine DaPrat. She wanted to make a $1,500 investment in RevTech. This document, which was obtained by The Globe, was sent to Mr. LeClair and Ms. DaPrat for comment.

In an e-mail to The Globe, Mr. LeClair said they made the investment "because we heard it was a company that could be used for a variety of purposes, including financial services." He added that "it was a small sum of money that we invested into a debenture, perhaps mistakenly on our part, without a lot of due diligence. ... However, in the event that any investment in any company ever posed a potential conflict of interest to me, we would have forfeited any potential benefit."

Asked if he's ever worked on a file before that intersected with his private life, Mr. LeClair said, "There were no files that I can think of, but in a small place it is always a consideration."

PEI has legislation governing conflict of interest for elected officials as well as cabinet ministers, but there's nothing that covers the behaviour of political staff, explained conflict of interest commissioner Neil Robinson - who was also one of CMT's investors. Mr. Robinson gave $15,000 to the company in August, 2012. (There is no suggestion he was involved in any of the negotiations.)

"I asked specifically, 'Was government involved?' and I was told, 'No, it's going to be financed through the company.' That to me seemed to be enough," Mr. Robinson explained, adding that if at some point a complaint is raised, "obviously I would be recusing myself."

By spring, 2011, CMT's business with the government was expanding. The province was actively talking with CMT and Simplex about using the latter's technology to develop a loyalty card program. In May, the deputy minister of tourism, Melissa MacEachern, sent Mr. Maines an e-mail about the card - the plan was to offer discounts at participating restaurants, shops and sightseeing attractions. (Ms. MacEachern, mentioned at the beginning of this story as the wife of the man who told the Trainors about the deal, had since divorced John Shane MacEachern.)

This was also the month that the company and the gaming committee officially connected.

The three-day meet and greet was organized by Paul Jenkins.

According to an itinerary he prepared, the festivities began on a Wednesday with evening drinks at the historic Great George hotel followed by surf and turf. Over the next two days there would be rounds of golf, steak dinners and meetings with Innovation PEI.

On Friday, May 20, Simplex would make a formal presentation to the gaming committee.

Once back in London, Simplex's CEO, Mr. Walsh, sent a formal follow-up e-mail to McInnes Cooper with a preliminary outline of how things could go forward. Mr. Sheridan replied the same day: "I look forward to a good read this evening and as well to the possibility of a strong win-win situation that could develop from a financial relationship."

The chief of staff, Mr. LeClair, also wrote to Mr. Walsh: "Philip, it was a real pleasure meeting you. I really hope that business materializes and that we have occasion to welcome you (and your wife, child and soon to be child) to PEI."

Talks continued throughout the summer. The list of investors grew. On July 28, 2011, local lawyer Bill Dow, Mr. Ghiz's former campaign manager and a friend of 25 years, wired $10,000 to CMT.

And finally in September, Simplex reported back with a 41-page road map that would see the birthplace of Confederation transformed. The report included a 36-week timeline, plus revenue estimates and legal hurdles - including a detailed section about how the Kahnawake reserve was operating without government interference by declaring itself a "sovereign" nation.

In a telephone interview, Mr. Walsh said they came up with two paths forward. Plan A was to regulate eGaming at a provincial level and recruit other provinces to join the PEI hub; provinces would receive a cut of the revenue. If that didn't work, Plan B was to base the centre on Mi'kmaq territory, using the Kahnawake model; the constitutionally entrenched treaty rights of First Nations would "supersede" the Criminal Code, said the Mi'kmaq's Mr. MacKenzie. And unlike the situation in Quebec, PEI's centre would be done in partnership with the government, adding a layer of legitimacy that would appeal to large gaming companies.

Mr. MacKenzie stressed that PEI wasn't planning to open an online casino of its own, but to collect licensing fees from established gaming outfits. "I think it's important to recognize that ... we were not in the gaming business," he said. "We were trying to get involved in the regulation of gaming business." It was really about public safety, he added.

PEI's global transaction platform could have been up and running by the end of 2012, if everything went according to plan.

But, of course, nothing went according to plan. In fact, the undoing of PEI's eGaming project was well under way.

The Unravelling Around 35,000 people live in the capital of PEI. On any given night in Charlottetown, the province's power brokers are likely sitting in one of half a dozen restaurants or bars, all within walking distance of each other.

Out-of-towners stick out. Even people who live on the island but weren't born there are labelled "come from aways." So when Mr.

Maines began showing up with guys speaking in English accents, people noticed. One of their favourite spots was the Gahan House brewery. Eddie Francis, the manager at the restaurant, got to know Mr. Maines and the Simplex crew so well that he started working for them as a consultant on the loyalty card program.

It was also around this time in 2011 that Mr. Maines became acquainted with a man named Mark Rodd, president of Rodd Hotels and Resorts.

Mr. Rodd met Mr. Maines through a mutual friend. It turned out the two men were practically neighbours, their cottages on the island about a kilometre apart. Soon Mr. Rodd got to know the men from Simplex and got excited about bringing a financial hub to PEI. In September, 2011, he invested $50,000 in CMT.

He met with his financial adviser, Yousef Hashmi at ScotiaMcLeod, and told Mr. Hashmi to wire the money to CMT's lawyer.

To Mr. Rodd's annoyance, Mr. Hashmi tried to talk him out of it.

"It appeared to me he didn't want to move the money out of ScotiaMcLeod," Mr. Rodd said.

"He was asking me questions I was uncomfortable with. He wanted to know what CMT does.

'Well what's their business?' and it's like, I'm not there to tell him about CMT. I just want him to move my money." Eventually, he did.

After that meeting, whispers started to circulate in Charlottetown that CMT was bad news.

When word got to Mr. Francis at the Gahan House that Mr. Hashmi was possibly the source, he offered to visit the ScotiaMc- Leod adviser, whom he knew socially, to set the record straight. Mr. Maines came along. The conversation quickly went sideways.

"Yousef suggested that any company 'going public' through a Reverse Takeover [which is what CMT was planning to do with Rev- Tech] was considered a scam," Mr. Francis said in an affidavit. Mr. Maines challenged Mr. Hashmi on this, but it was useless. He didn't want to hear anything about what CMT was doing, Mr. Francis added in an interview.

The meeting lasted 10 minutes. Once they left, Mr. Hashmi - who declined to be interviewed for this story - made two phone calls: one to his branch manager, Eddie Curran, and another to the finance minister, Mr. Sheridan. Shortly after speaking with Mr. Hashmi, the finance minister sent the CEO of Simplex, Mr. Walsh, a furious BlackBerry message.

"Paul Maines has been distributing the Simplex report for the province on our project around to perspective investors on behalf of FMT!! I can't believe first that Paul has the report, which was for our eyes only and secondly that he has left copies of this report in offices around Charlottetown! One 'wrong' office and this whole project is in total jeopardy!" He added, "I would never have believed that a member of your team would jeopardize our two year project."

Mr. Walsh calmed Mr. Sheridan down, but the damage was done now that ScotiaMcLeod was involved. That same fall, Scotia's Mr. Curran did a financial portfolio review for one of his part-time staff members - Kelli Trainor. That's when he noticed that the Trainors had a $10,000 stake in CMT, and Mr. Curran didn't like it. He told her he'd been hearing negative things about the company.

After their meeting, Mr. Curran began pressing Ms. Trainor for information about CMT, but she was firm: This had nothing to do with ScotiaMcLeod, and they were comfortable with their investment. This went on for months, until some time in late 2011, when the branch manager told Ms. Trainor that one of his clients, a woman about to retire, was planning to invest her life savings in CMT. He was "awfully concerned" and hoped to give the woman some informed advice.

This time, Ms. Trainor obliged. On Jan. 3, 2012, she had her husband send over all the paperwork they had about CMT to her boss. Nine months later, the branch manager would use the information Ms. Trainor provided to complain to PEI's securities commission about CMT.

Meanwhile, things were progressing rapidly on the gaming file, to a point where "we could officially move forward and start the regulatory process," recalled the Mi'kmaq's Mr. MacKenzie. Around the end of February, 2012, he said, all the players were summoned to a meeting. There were about 15 people in all, including various deputy ministers and officials from the Justice Department.

"The provincial government backed out," Mr. MacKenzie said. After two-and-a-half years of study, the government determined that Plan A - bringing other provinces aboard - was unrealistic, and Plan B - going it alone on aboriginal land - was too legally thorny to proceed. Mr. MacKenzie and the Mi'kmaq's involvement stopped here.

Prince Edward Island was not going to become an international online gaming hub after all - but the story was hardly over. The province was still interested in pushing ahead with the broader global transaction platform and loyalty card program. But now it had a new problem, one that's as much a part of island culture as potatoes and Anne of Green Gables - gossip.

By the spring of 2012, rumours were circulating that CMT was a scam. Someone ran Mr. Maines's name through a Google search and found the New York Stock Exchange allegations.

The business had a "brand" problem, Mr. Maines said, so it changed the numbered company's name to Trinity Bay Technologies. This was the company with which Innovation PEI signed a 60-day memorandum of understanding to work on bringing a "financial services centre" to PEI.

Charlottetown lawyer - and CMT investor - Bill Dow advised Innovation PEI on the agreement. The deal with Trinity Bay Technologies/ 7645686 was finalized on July 6, 2012.

In an e-mail to The Globe, Mr. Dow said that "I have practised law in good standing with the Law Society of PEI for over 23 years.... Any suggestions of wrongdoing, especially in my profession, are hurtful and extremely damaging to my firm and me."

Mr. Dow said he initially didn't realize that the numbered company and CMT were related. Once he noticed the "potential conflict," he closed the file "and no invoice was rendered." The MOU didn't stand a chance anyway.

In August, 2012, Mr. Curran organized a securities seminar for ScotiaMcLeod employees. The discussion, which was led by government lawyer Steven Dowling, focused on financial institutions' "gatekeeper" obligations, which requires officials to report suspicious activity. Less than two weeks later, Mr. Curran phoned Mr. Dowling about CMT, triggering an investigation.

That same week, the MOU between the province and CMT was set to expire. Deputy minister Ms. MacEachern extended it for 30 days. Almost immediately after, she learned about the investigation. Word had it that CMT had stolen a sick woman's money.

When CMT's lawyer, Mr. Jessop, showed up that fall to discuss the deal, Innovation PEI's lawyer, Mr. Dow, told him everything was on hold pending the investigation by the superintendent of securities, according to an affidavit filed by Mr. Jessop.

Mr. Jessop said it was around this time that Mr. Dow told him he had "forgotten" about his $10,000 investment in CMT. He wanted to see if he could get out of the deal in light of his work with Innovation PEI. (Mr. Dow was given his money back.) The securities probe pressed on.

Paul Jenkins told Mr. Dowling he had no idea how he'd become a director with CMT's subsidiary. By this point, Mr. Jenkins was working on a new business with government involving a seniors' long-term care facility. He did not respond to repeated interview requests from The Globe. In January, 2013, Mr. Dowling reached out to Mark Rodd. The hotelier was furious. He e-mailed Mr. Hashmi at ScotiaMcLeod, demanding to know how Mr. Dowling knew about his investment. Scotiabank's compliance officer John De Pompa replied. He told Mr. Rodd the firm had received a request from PEI's superintendent of securities and they were legally obligated to co-operate. He assured Mr. Rodd "a complaint was not initiated by our office."

However, in an interview, a Scotiabank spokesperson acknowledged Mr. Curran was the instigator, but said there is a "whistleblower" element to the gatekeeper obligations, which require confidentiality. Also, it was not a formal complaint, just a tipoff.

Nevertheless, word got around on PEI that Mr. Rodd, Kelli Trainor and another person - a mystery woman with cancer, the story went - had gone to the regulator. Mr. Rodd and Ms. Trainor confirm they heard this rumour, although neither is sure how it started. When the official securities hearing notice was filed on Feb. 14, 2013, there was no mention of a woman with cancer - she doesn't exist - or swindled investors.

Rather, CMT stood accused of not registering to sell stocks on the island. Later, the securities office tacked on allegations that six of the company's 36 PEI investors were not "accredited," meaning they weren't wealthy enough to make a risky financial investment. The case was docket 001, the first formal securities case in PEI's history. In 2008, the province revamped its act and this is the first case since then. Prior to that, securities issues were handled in the court system.

CMT initially tried to fight the allegations. It argued that because they were dealing with convertible loans, not shares, the company was not required to register with the province. On the accredited investor claim, CMT said each investor had signed a form declaring he met the qualifications. The company argued it had no reason to suspect anyone wasn't being truthful.

But in the end, CMT decided it wasn't worth fighting. It agreed to pay a $10,000 fine for late filing and selling to unaccredited investors, plus $5,000 in fees. Ontario's regulator issued a reciprocal order, which is common, since a handful of CMT's 45 investors lived in Ontario.

CMT's litigation lawyer, Mary Biggar, said it was a "relatively minor infraction in the context." Added lawyer Mr. Jessop: "It was a business decision, made at the time, to settle it and move on." Between the legal bills and lack of money coming in, CMT sold its shares of Simplex to Bottomline Technologies in August, 2013. After the sale, the company held a meeting for investors: Anyone who wanted their money back got it - with 12-per-cent interest. Some, including Mr. Rodd, chose to keep their money with the company.

Mr. Maines said he has "retained counsel to review all of our legal options" with regards to Scotiabank and the government of PEI. Mr. LeClair, who left the premier's office in October, 2011, said that because of potential litigation, he is limited in what he can say about his involvement with CMT. The securities probe was the first time many people on the island had heard about PEI's eGaming pipe dream and the connection with CMT. When news hit local media, government officials scrambled to distance themselves from the company at the centre of the securities storm.

On May 1, 2013, Mr. Sheridan was asked in the House how much the government paid for the Simplex blueprint for online gaming. "It is very clear that the government of Prince Edward Island has not paid any money for a report from Simplex," he replied.

CMT hired a private investigator to put together a report about the company's business dealings on the island. Those findings were tabled in the legislature last November.

In a December interview with The Globe, the finance minister said he had no idea CMT and Simplex were connected. "I to this day do not know that Paul Maines and Philip Walsh had a business relationship. And he wasn't part of any of our work," Mr. Sheridan said.

Mr. Sheridan resigned a few weeks after the interview. Premier Ghiz resigned the day before CMT's investigator released his report, saying he wanted to spend more time with his family. On numerous occasions, a government spokesperson told The Globe, both Mr. Ghiz and Mr. Sheridan have said their decisions to leave public office have nothing to do with the proposed deal.

The Globe reached out to all 36 PEI investors with CMT. Nine agreed to be interviewed. Gary Evans, a lawyer on the island, is frustrated about what happened.

In his view, the doomed gambling scheme hijacked a lucrative business opportunity not only for investors but for the province - a province that relies on more than $600-million in federal transfer payments to survive. A financial hub could have changed PEI, he said.

"The industry that would have developed around that technology would have been a vital economic lifeline," Mr. Evans said. Mr. Evans hasn't given up. He left his money with the company.

Associated Graphic

Philip Walsh, Simplex

CEO SIMULOCITY

Melissa MacEachern, former deputy minister of tourism

UPEI

Paul Maines, executive with Capital Markets Technologies

CHRISTOPHER LUNA FOR THE GLOBE AND MAIL

Wes Sheridan, former PEI finance minister

ADRIAN WYLD/THE CANADIAN PRESS

Jeff Trainor, golf club manager

Tuesday, March 03, 2015

Correction

A Saturday feature on a proposed online gambling business in Prince Edward Island incorrectly said the island has 13,000 aboriginal residents. In fact, the number is approximately 1,300.

THE DEEP
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Canada's nuclear waste will be deadly for 400,000 years. What town would like the honour of hosting the high-tech hole where it will be buried? Quite a few, when they're poor and the rewards are rich
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By CHARLES WILKINS
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Friday, February 27, 2015 – Print Edition, Page P54


WITH HIS WIFE, FRAN, TONY MCQUAIL OPERATES A LUSH ORGANIC FARM NEAR LUCKNOW, ONTARIO, WITHIN HAILING DISTANCE OF BRUCE POWER, THE WORLD'S LARGEST NUCLEAR POWER FACILITY. THE PLANT'S GROUNDS, ON THE SHORES OF LAKE HURON, ARE ALSO THE PLACE WHERE NEARLY HALF OF CANADA'S NUCLEAR FUEL WASTE IS "TEMPORARILY" STORED. "WHAT THEY'VE DONE," MCQUAIL SAYS, "WOULD BE LIKE ME PILING UP DECADES' WORTH OF MY OPERATION'S WASTE, WHICH IS TO SAY SHIT, AND LEAVING IT OUT BY THE ROAD.

"If I piled any quantity of shit out there and left it with no disposal plan, I'd be shut down and condemned within weeks. And here's an industry with the capacity for global devastation, with no permanent plan for their garbage, the most dangerous stuff on Earth, and they're allowed to keep producing it indefinitely."

There is in fact a plan for that waste. A federally mandated body, the Nuclear Waste Management Organization (NWMO), wants to bury it in what the nuclear industry calls a Deep Geological Repository, or DGR. First, though, the organization must complete its quest--in effect, a competition, although the NWMO doesn't see it that way--to find a municipality that will serve as a "willing host" for the repository.

Among the contenders for the distinction are the municipalities of Huron-Kinloss, South Bruce and Central Huron, all of them close neighbours to Fran and Tony McQuail.

If it doesn't seem like a competition any municipality would want to win, consider that spending on the project will likely run as high as $24 billion. And, the construction phase aside, the jobs involved are not the sort that will last only until another, perhaps cheaper, location is found.

According to the NWMO's plan, 400,000 years or more will pass between the point at which the waste is buried and the happy day when any sort of safety sticker is likely to be affixed to the vast toxic grave.

One morning in october, 1957, the principal of Keyes Public School in Deep River, Ontario, came into our Grade 5 classroom and declared that we, the children of the town, had "nothing to be afraid of." We were to pay no attention to rumours that the reactors at nearby Chalk River would be among the Soviet Union's first targets should the Cold War suddenly heat up.

Because we had older siblings ever willing to heighten our appreciation of reality, we already knew that if the reactors got hit, the explosion would be the equivalent of a thousand, maybe a million, H-bombs. We knew, too, that Deep River was located exactly seven miles from the reactors because that was the minimum distance at which human life would be spared if the plant ever got hit.

Mercifully, the missiles never came. And the plant never blew.

Others did: Three Mile Island (1979), Chernobyl (1986), Fukushima (2011).

Most of the reactor stories we heard as kids turned out to be fables. Yet more than half a century later, they remain bristling little allegories not just of the risks of splitting the atom but of the doggedness of those who continue to tell us we have "nothing to fear" from an industry that in 1945 said hello to humanity by incinerating 80,000 citizens of Hiroshima.

Meanwhile, I, like millions of Ontarians, have become a complacent beneficiary of the many rewards of nuclear power. While just 15% of the electricity produced in Canada as a whole is of atomic origin, Ontario's 18 reactors supply nearly 60% of that province's electricity.

So accustomed have we become to such power, we have largely stopped thinking about its uncomfortable truths: For example, that Canada's signature nuclear technology, the CANDU reactor, seeded proliferation of atomic weapons in Pakistan and India. Or that the supposedly world-beating CANDU turned out to be a financial white elephant: The CANDU's creator, Atomic Energy of Canada Ltd., devoured billions in subsidies before the CANDU technology was finally sold for a pittance to scandal-plagued engineering firm SNC Lavalin.

Nuclear power is said to be cheap--but only if one doesn't count costs that either have been offloaded or are yet to be fully funded, such as accident liability, waste management and the debts incurred in reactor construction. Moreover, the industry has a history of wild cost overruns: The bill for creating Ontario's Darlington facility during the 1980s climbed from a projected $3.9 billion to more than $14 billion.

Increasingly these days, nuclear power is also said to be green, in that it releases next to no carbon into the atmosphere. "If it messes up," scoffs Tony McQuail, "it's about as green as Chernobyl."

A part from the three rural municipalities near McQuail's farm, the towns in the running for the DGR are a kind of necklace of economically stressed communities strung across Northern Ontario's broad Precambrian shoulders, with just one candidate further west in Saskatchewan. To get even an inkling of the scale of what would be involved in the transformation of one of these places should it be chosen for the DGR, one would do well to visit the Bruce Power complex, a bit north of Kincardine, Ontario. There, eight CANDUs boil away around the clock, kicking out 6,300 megawatts of power and occupying nearly half of the company's 4,250 staff. It is a place that on a morning in midsummer presents as a vast and hazy torment, an impenetrable dreamscape that has somehow fetched up on the wide beaches of Lake Huron. The place is, among other things, miles of chain-link crowned with razor wire; towering brick reactor buildings without windows; and a cat's cradle of power lines that, viewed from below, reinvent the sky as a crazy-quilt of triangles and parallelograms and scimitars. It is security personnel with side arms, flak jackets and glowering faces.

So testy are the guards that when a visitor is momentarily confused by signs indicating where he should park to have his vehicle inspected, a young sentry with forearms the size of bazookas advances on him, intoning the earnest advice that "this is a place where you have to be able to read signs"--then, more jocularly, "I wouldn't want to have to kill you."

"Oh, go ahead," says the visitor, coming close to getting himself kicked off the premises.

The same sprawling grounds are home to the Western Waste Management Facility, where Ontario Power Generation stores much of its share of the 48,000 tonnes of waste that have accumulated in Canada during the past 65 years and that the company and other nuclear-power producers hope will eventually be lowered into the national DGR.

The ever-accumulating tonnage, which in the wrong hands could provide payloads for thousands of atomic bombs, is entombed in a thousand snow-white containers (a half-inch of steel atop reinforced concrete), each the size of, say, a Lincoln Navigator set on end and weighing 70 tonnes. The air in the facility is Floridian; the light is polar; the floor glistens. "You can eat off it," jokes the director of the place, Lise Morton, a most amiable host, who notes that the containers are (perhaps not surprisingly) "warm to the touch."

In 2002, Ottawa passed the Nuclear Fuel Waste Act, which obliged key Canadian atomic energy producers, such as Bruce Power and Ontario Power Generation, to create the Nuclear Waste Management Organization and develop a permanent waste disposal strategy.

The NWMO, founded that same year, takes pains to equate itself with openness, honesty and the public interest-ideals assertively declared on its website. But it is at heart an industry body, not a public one: Eight of the nine members of its board come straight from nuclear production companies.

The $24-billion cost of a deep repository-to be paid by the producers (hence ultimately their customers) out of a fund that now stands at less than $3 billion-sounds like a lot for the existing quantity of nuclear-fuel waste in the country. NWMO spokesman Mike Krizanc visualizes Canada's 48,000-tonne waste pile as "enough to cover six NHL-sized hockey rinks to the top of the boards."

The discrepancy is explained by toxicity. According to Gordon Edwards, a mathematician who has critiqued the nuclear industry for decades as president of the Canadian Coalition for Nuclear Responsibility, irradiated-that is, used-nuclear fuel is "millions of times more radioactive and deadly than when the unirradiated fuel was placed in the reactors." Studies have connected the various isotopes contained in the waste to cancer, immune system damage and genetic mutation. Those six hockey rinks are enough, say nuclear detractors, that if the waste is buried in the wrong place, or in the wrong way, it could ruin our water, render the landscape useless for agriculture, or, in a darker scenario, render it useless for human habitation.

In 2005, after a low-profile consultation with 18,000 Canadians (roughly one in 2,000 of us), the NWMO decided that a deep repository was the answer to its mission.

According to the plan, Canada's 2.4 million spent fuel bundles, each the size of a fire log, will be placed in closefitting steel containers, which in turn will be encased in containers of copper, reputed to be impervious to corrosion; then into a kind of igloo of Bentonite clay, which swells when wet, sealing off the entire package from corrosive elements.

Then into the deep dark hole.

The DGR would be big enough, says one Bruce Power worker, "to hold the equivalent of half a dozen soccer stadiums-to have its own street names, its own economy, its own weather."

To choose that town, the NWMO is applying what Mike Krizanc calls a "multistep engagement" during which a municipality is assessed first for its social and political suitability for the role. At subsequent stages, it is subjected to more intensive scrutiny and to "education"-some would say "re-education"-during which it must continue to show its commitment to the cause. At a point when that commitment is considered stable, core samples of the underlying rock are, or will be, taken to determine geological suitability-in other words, whether the town sits on rock stable enough to be drilled and dynamited and deracinated for 20 years or more as construction inches deeper into the planet. The site must then, for 4,000 centuries, be impervious to water penetration, fluctuating ground pressure, earthquakes, climate change, terrorism and human error.

"Finally," says Eugene Bourgeois, whose idyllic property lies within a kilometre of the Bruce Power reactors, "it has to be impervious to the potential ignorance or delinquency of people, perhaps 'peopleoids,' more than a quarter-million years from now"-which is to say, peopleoids who likely will have no notion even of the languages in which the safety code and signage of the DGR were written.

At the same time, the site can't be too remote. It must be serviced by roads and rail, so that waste can be brought in, and must have a sufficient population that the thousands of folks who will build the facility and the hundreds who will be employed there long-term will have a place to live.

There are 11 rural and wilderness municipalities vying for the DGR, survivors of an original roster of 22. The aspirants include veteran northern encampments such as Hornepayne, Ontario, where, as Brennain Lloyd of the environmental education group Northwatch describes it, there is "a really fierce desire" on the part of at least a few municipal administrators to "bring the nuke dump to town."

And Schreiber, a struggling railway town on the north shore of Lake Superior. And Ignace, another struggler, in the boreal wilds to the west. And, to the east, Manitouwadge.

And Creighton, Saskatchewan, directly across the Manitoba border from Flin Flon (Creighton is a town described by a former resident as "having had its fiscal balls to the wall for half a century").

And Blind River, Ontario, on the north shore of Lake Huron, where survival has for years depended on the uncertain flow of traffic along the Trans-Canada Highway.

And Elliot Lake, some 50 kilometres north of Lake Huron, where uranium mining was the sustaining industry during the 1950s and '60s but which these days survives on the pensions of retirees who moved to the town to take advantage of discount housing left over from the boom years.

"What makes it all so attractive to competing municipalities is, of course, the money," says Tony McQuail.

While billions of dollars will flow directly through the chosen town over a period of four or five decades, Lloyd suggests that most of the money is likely to end up in the pockets of big-city consultants and other outside beneficiaries.

Mainly, the price tag will buy decades' worth of infrastructure and construction costs, as well as maintenance, monitoring and employment training. It will also pay for the transportation of the waste to the spanking new DGR, which will, by the time it opens, have been a reality for its "willing host" for a quarter of a century or more.

Finishing just the first phase of the preliminary assessment brings $400,000 of NWMO money to candidate towns, so they can "build sustainability and well-being." It has been speculated that some towns had no intention of staying in the process beyond the early payout.

While some towns applied to participate of their own volition, others were, according to Lloyd of Northwatch, courted by the NWMO. "What bothers me most about the process," says Lloyd, "is the 'siloing' that the NWMO practises on the municipal politicians they choose to target.

"They approach them not in the context of their communities, where the politicians are immediately answerable to their constituencies, but at municipal conferences and conventions where they're away from home, isolated, perhaps a little unsure of themselves. They wine and dine them and softtalk them about the unimaginable benefits that could accrue to their towns should they consider hosting the DGR.

"Then they fly them to Toronto and put them up in the best hotels and take them up to the Bruce Power site, or other nuclear generating stations, and show them what of course appears to be secure and flawless waste storage. The politicians are just snowed-they're made to feel like important players. They take this dream of hope and prosperity and safe science back to their communities and in effect go to work for the NWMO."

The NWMO's Krizanc refutes Lloyd's version of the process. All 22 municipalities asked to be vetted; "The NWMO did not initiate any of these contacts," he said in an e-mail. As for the meetings and tours that ensued, "In no instance were these activities kept secret. In fact, the NWMO encouraged participants to issue news releases following their visits."

Municipal leaders have found that constituents' input can be passionate. Mayor Mark Figliomeni of Schreiber, for one, is a beacon of moderation. "Right now," he says, "the other councillors and I are just listening and learning-as much from those who hate the idea as from those who'd love to see the thing built here." Figliomeni acknowledges "how difficult it is to ignore that a project such as the deep repository could mean jobs and prosperity for several generations to come. Meanwhile, it's just as hard to ignore the uncertainties. They definitely concern us."

Should the DGR be awarded to a community further west than Schreiber, Figliomeni is equally concerned about having nuclear waste transported regularly along the Trans-Canada Highway, in effect his town's main street, for decades to come.

Other northern councils-at Ear Falls, at Nipigon, at Wawa-have been more divided over the DGR and so were eliminated early, or withdrew, from the process. Similarly, Brockton, near the site of Bruce Power, was cut late in 2014 after its residents elected a largely anti-DGR council. (The NWMO says Brockton's assessment simply didn't pan out.)

The aboriginal communities of Pinehouse and English River, Saskatchewan, were dropped from the process when community debate over land and water issues, as well as a growing distrust of the NWMO, became irresolvable.

While Pinehouse was still in the running, three community leaders, including a cousin of the mayor, received money from the NWMO. Offended tribal elders formed the Committee for Future Generations and initiated what they called the 7,000 Generations Walk Against Nuclear Waste, which saw participants trudge nearly 1,000 kilometres from Pinehouse to the legislature in Regina.

Krizanc says payments to candidate communities were limited to reimbursing them for expenses-up to $75,000 over a 12-month period. "Pinehouse, like all other participating communities, employed a part-time staff person to co-ordinate the village's activities with the NWMO," he said in an e-mail. "Most communities have only spent a portion of the funding available to them."

No local DGR debate has been harder fought than the 30-month marathon of psychological and ground warfare that unfolded in Saugeen Shores, one of several contestant municipalities in Bruce County, between 2011 and 2014. The county is the capital of nuclear activity in Ontario, home to Bruce Power, which provides the best jobs in the area and thereby pours millions of dollars into the local economy.

There, a zealous and well-organized grassroots organization called Save Our Saugeen Shores (or SOS) fought not just the NWMO and local politicians favourable to the deep repository but also a largely nuclear-friendly citizenry that perceived a DGR to be the will of the atomic establishment and more specifically of Bruce Power. "Places like Port Elgin and Southampton [the biggest population centres in the municipality] would be ghost towns if it weren't for Bruce Power," says an employee of the company.

As in many such battles, the success of SOS hinged on an outraged but initially unschooled cell of activists that included, among others, a onetime school principal named Pat Gibbons, who for months pored over scientific treatises and academic studies and conveyed what he learned to anybody who cared to know. And a pair of cottage-owners who spent weeks helping refine press releases and presentation papers. Perhaps most significantly, it included a retired high school teacher named Cheryl Grace, who, for a year and a half, with the avidity of an owl, monitored the conduct of the Saugeen Shores municipal council (she has, herself, since been elected to council).

Gibbons and Grace eventually discovered that members of the local council had been meeting behind the scenes with the NWMO and Ontario Power Generation, despite the NWMO's stated dedication to openness. In Grace's view, the politicians involved had become allies of the organization.

SOS papered the municipality with protest signs, canvassed homes (sometimes with near-violent consequences), brought speakers to town, held seminars and fundraisers.

The NWMO's Krizanc recently declared SOS's message to be nothing more than the "spreading of misinformation." In an e-mail, he added, "The NWMO has never met 'behind the scenes' with Saugeen Shores municipal council."

Which is technically correct. The meetings that vexed SOS were of a body called the DGR Community Consultation Advisory Group, created by OPG to inform local mayors, who collectively also constitute Bruce County council; the NWMO completed the group's membership. Since these meetings had enough mayors present to form quorum for a council meeting, a later investigation by the authorities concluded that they "were also meetings of Bruce County council" and thus the Municipal Act-which mandates transparency-had been violated.

Understandably, much of the debate in Saugeen Shores centred on the appropriateness of using an unproven technology to bury toxic waste next to Lake Huron. Pat Gibbons calls it "a complete mystery" how the NWMO can predict that the Great Lakes shoreline, or any part of the lakes, will be stable geologically for 400,000 years, when the Great Lakes have only been around for 10,000 years, going back to the retreat of the Wisconsin glacier. "Besides, why would anybody put a nuclear dump in limestone, soft sedimentary rock, beside water?"

The NWMO responded by pointing to geological research indicating that the limestone has not shifted in 400 million years. But ecologists such as Molly Mulloy answer that isostatic rebound around the Great Lakes-the upward "bounce" of the Earth's crust as the Wisconsin melted-is ongoing today and is in large part responsible for the gradual decline of Great Lakes water levels over the ages.

The NWMO might more obviously have pointed out what everybody else could see plainly: that placing the DGR adjacent to Bruce Power would mean a large portion of the country's nuclear waste would have to be transferred just a few kilometres for burial.

SOS loyalists were at first stupefied, then rejoiced cautiously, when, in mid-January, 2014, word came down that the NWMO had eliminated Saugeen Shores from the competition. "At first we thought someone was playing a joke on us," says Cheryl Grace. The organization's explanation for the sudden reversal was that geological analysis showed the local stone was not suitable for a DGR.

"Strangely," says Grace, "they'd used the same studies a year earlier to determine that our geology was suitable."

More recently, an NWMO representative let slip that Saugeen Shores was turned down less for geological reasons than because the municipality could no longer be considered a potentially "willing host."

The battle in Saugeen Shores threw light on the sometimes confusing mix of public- and private-sector interests in the Canadian nuclear industry. While Bruce Power, a private-sector entity, was perceived by many as a central player in the debate, the company has never had any role in nuclear waste disposal, which is the responsibility of Ontario Power Generation, a branch of the provincial government.

When Bruce Power was hived off from OPG by the Mike Harris government in 2001, the new company-currently a consortium consisting mainly of TransCanada Corp. and an arm of OMERS, the pension fund of the Ontario municipal employees-signed a lease for the nuclear plant's physical assets, which are all still owned by Ontario Power Generation. The fuel waste is among those assets; Bruce Power pays OPG to store it.

"The profits at Bruce now go to corporations," says longtime nuclear critic Tom Adams, "but the residual liability in the event that more cash is needed will be borne by future taxpayers and therefore consumers-that is what concerns me."

The cozy arrangement speaks to the power of a wellfunded, often secretive, nuclear establishment spanning the public, private and regulatory sectors, and the odds faced by the other side-namely a dogged, often fragmented army of volunteers.

It is a lingering and painful irony for the Saugeen Shores activists that their Bruce County neighbours, the municipalities of Huron-Kinloss and South Bruce, are still in the competition to host the deep repository, as is Central Huron in the next county.

A more disquieting irony is that a second DGR-intended to hold "low- and intermediate-level" waste (as opposed to the "high-level" waste that will go into the national DGR)-has for half a dozen years been in quiet planning by Ontario Power Generation just a few hundred metres from the Bruce Power reactors.

"Low-level" waste includes items of daily use around reactors-contaminated gloves, clothing, mops, tools and so on-whereas "intermediate-level" waste is items more densely contaminated, in particular the interiors of decommissioned reactors.

The decision on whether or not the low- and intermediate-level DGR will be built depends on the recommendations of a Joint Review Panel named by the federal government in co-operation with the Canadian Nuclear Safety Commission and chaired by Stella Swanson, a radiation ecologist from Calgary. The panel is expected to deliver its recommendations to Ottawa in May.

The panel's hearings, held in Kincardine and Saugeen Shores, opened on a raw note in 2013 when officers of the Ontario Provincial Police visited the homes of activists who had signed up to address the panel and informed them that they had nothing to worry about in going before the review and would be fully protected despite their views.

"It was a kind of reverse bullying," says Cheryl Grace, "nothing more than a show of force-a 'we know who you are' sort of thing." The dissidents were never able to determine exactly who engaged the police.

In the face of OPG and NWMO arguments that the limestone beneath the Bruce Power site is ideal for such a DGR-that the science is incontestable, that the planned containment of waste is unbreachable, that the limestone beneath the lake is impenetrable-one presenter after another rose before the panel, pointing out, among other things, that over the course of centuries the gradual seepage of heat from the radioactive waste would be enough to alter the character and stability of the surrounding rock, thereby making it vulnerable to fracture; that the integrity of the copper and clay containers in which the waste would be stored couldn't possibly be guaranteed for 400,000 years; that years of blasting and rock removal would in itself alter the integrity of the surrounding geological structure and perhaps even the reactors nearby.

Gordon Edwards of the Canadian Council for Nuclear Responsibility reminded the panel that "geology is not a predictive science," and argued that it was preposterous to assume that the limestone along Lake Huron's shores would not undergo changes during the millenniums to come.

One of the more dramatic moments occurred when a former OPG employee, a nuclear chemist named Frank Greening, stepped to the podium and declared that the company had used inaccurate mathematics to characterize the toxicity of the contents to be stored in the deep repository. OPG data, he said, had been largely computer-generated, when empirical data, much of it collected by Greening himself during his years on staff, showed that OPG's assessment of toxic isotopes had, in one case, been misrepresented by a factor of 600. "It's completely unacceptable," he said. "In my time at OPG, I discovered other such miscalculations. If people can't get their figures straight, how can they possibly be trusted with a life-and-death project such as a DGR?"

The ultimate DGR skeptic may be the Saugeen First Nation, which claims a kind of veto right over construction, based partly on historic treaty terms, and partly on a long-standing promise from Ontario Power Generation and the NWMO that the facility would not be built without native consent.

"Which at this point we can't give," said Randall Kahgee, a former Saugeen chief, in addressing an SOS seminar in 2013. "Water is life. The First Nations in these parts and elsewhere on the Great Lakes have depended on it for thousands of years. At this point, we're not going to do anything that would potentially condemn it forever."

At the moment, the u.s., Japan and europe are also grappling with the challenge of nuclear middens, in particular the deep repository option and the how-to of putting waste underground. "What the NWMO won't tell you is that there isn't a single functioning DGR for fuel waste anywhere in the world," says Brennain Lloyd.

"So this is entirely unsubstantiated technology." The U.S. government's test deep repository in New Mexico-which is not for fuel waste but waste from the U.S. nuclear-weapons program-was closed to further stockpiling after a 2014 underground fire, which was followed by a leak of radioactivity into the surrounding area. Lloyd adds that two DGRs for low- and intermediate-level waste in Germany have been permanently closed because of radiation leaks-the sort of thing the NWMO and OPG insist will never happen in Canada. "We wouldn't even be considering a DGR if our engineering had any questions at all about such a facility," says OPG spokesman Neal Kelly. "And we certainly wouldn't locate it where the geology wasn't entirely stable."

As Mike Krizanc sees it, Canada has "higher standards for safety than pretty much any country in the world."

Of course, the reactors at Fukushima and Chernobyl were also once perceived to be operating under impeccable national standards.

While he has no particular empathy for the NWMO, Charles Rhodes, a Toronto-area nuclear engineer and consultant, agrees with the organization at least to the point where he sees no alternative to a DGR in Canada. "However, it absolutely has to be built above the water table," says Rhodes, "which means in a mountain somewhere-high, dry, secure, accessible-whereas the NWMO seems determined to dig down into bedrock, beneath the water table, where of course water will eventually get in and create a catastrophe."

Like Rhodes, nuclear critic Tom Adams is not convinced that 400,000 years of storage could possibly be free of unforeseen disaster. "Statistical probability alone pretty much guarantees that at some point something will go wrong."

Asked if he thought there would ever be a deep repository in Canada, for any level of atomic waste, Adams reflected for a moment and said simply, "No."

If he is correct-if the Joint Review Panel turns down Ontario Power Generation's plan for the low/medium-level site, and the NWMO is unable to manifest its dream of a national DGR-what then?

For Peter Ottensmeyer, the answer is clear. The professor emeritus in medical biophysics at the University of Toronto argues that when our CANDU reactors have taken everything they can from the uranium they consume, they've used up a little less than 1% of the fuel's fissionable capacity. "What you have is this so-called waste that, in more efficient, fast-neutron reactors could become fuel again."

In Ottensmeyer's and Rhodes's view, if spent CANDU fuel were passed three times through an ideal fast-neutron reactor, each pass would consume nearly a third of the waste's fissionable isotopes, leaving the waste all but neutralized.

Ottensmeyer says that one commercial fast-neutron reactor, the PRISM, based on the EBR-II reactor that operated for decades in Idaho, could reduce CANDU waste to a level of radioactivity that would require just 300 years of storage, instead of 400,000 or more. The neutralized fuel waste alone would supply Canada with a projected 4,000 years of atomic power.

"There's a lot of pie-in-the-sky out there," says Tom Adams, who believes that the key question facing the nuclear establishment is perhaps less about waste and DGRs and theoretical reactors than about what he calls "the serious existential crisis facing the future of the industry." For one thing, the country's reactors are aging. Most are in the last 30 years of their life expectancy.

Ten in Ontario, at Darlington and Bruce Power, are scheduled for costly and disruptive refurbishments. OPG announced recently that the Pickering plant will be shut down by 2020.

Meanwhile, no more reactors will be built until the wastedisposal problem is solved. "Which may take decades," says Adams. "Under the circumstances, it's very difficult to imagine the nuclear program moving forward."

Industry personnel may themselves be facing entropy. Last summer, a senior Bruce Power employee declared that the industry's aging personnel are "simply incapable of handling a megaproject of this size. There just isn't sufficient expertise. Most of us are working under enormous pressure all the time." The result, he said, is many cases of stress leave. The company responds that it recorded no long-term disability claims stemming from stress in 2013 and 2014.

Ironically, whatever the fate of the DGR, Canada's nuclear waste seems positioned to keep our atomic industry active and debt-ridden well beyond the current debate. If things go according to plan, the waste will deliver a version of eternal life to a Canadian town that 500 years from now may have no memory of the historic industry that is the foundation of its economy. If things go awry, as detractors are certain they will, the town may well have no memory at all.

To see a multimedia version of this story, visit tgam.ca/r

HOW SPENT NUCLEAR FUEL WILL BE STORED

1. 108 used nuclear fuel bundles fit in each basket 2. each copper container holds three baskets, which are surrounded by steel 3. containers will be encased in clay in the tunnels of the repository. each container holds 324 used fuel bundles 4. the tunnels will be located in a repository at the bottom of 500to 1,000-metre deep shafts

Associated Graphic

PHOTOGRAPHS BY PHILIP CHEUNG

THE WESTERN WASTE MANAGEMENT FACILITY IS HOME TO NOT JUST SPENT FUEL BUT ALSO TO LOWER-RADIATION WASTE--SUCH AS RESINS AND FILTERS--THAT IS LOWERED INTO THE IN-GROUND STEEL-LINED CONTAINERS SEEN ABOVE

MONITORING IS CONSTANT AT THE STORAGE FACILITY. A CONTAMINATION METER (TOP LEFT) IS PUT TO WORK (TOP RIGHT). BELOW LEFT, METAL IS REMOVED FROM BAGS OF WASTE PRIOR TO INCINERATION. STAFF ARE OFTEN CHECKED DURING THE WORKDAY (BOTTOM RIGHT)

LOW- AND INTERMEDIATE-LEVEL RADIOACTIVE MATERIAL IS SORTED AT THE WASTE MANAGEMENT FACILITY. THIS CATEGORY OF WASTE IS TO GET ITS OWN DEEP GEOLOGICAL REPOSITORY--NEAR THE BRUCE REACTOR, ACCORDING TO PLANS

I always return, but I cannot stay
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As co-operative communities enjoy a resurgence, an urbanite raised in a remote Alaska collective ponders the profound tug of home
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By EMRYS ELLER
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Saturday, February 28, 2015 – Print Edition, Page F1


I have journeyed home to Alaska for the past 12 summers. When I fly in late June near the solstice, sunset can last from JFK in New York to Ted Stevens International in Anchorage - it's almost as though the planet has paused for 14 hours.

I return to help build. The Barn, which stands in a clearing roughly the size of a ballpark, is a 1,300-square-metre rectangle that rises above the surrounding forest of spruce peppered with cottonwoods. I have spent much of the past two summers helping to stuff its timber-frame skeleton with straw and clay, tamping the muddy mix down into the walls with a huge wooden spatula.

It feels like cramming raw spaghetti and dirt sauce into lasagna pans. We repeat the process from the three-inch-thick floorboards to the roof's eve, 10 metres overhead.

Last summer, we'd begun the plaster - the walls' outer skin - with an even muddier blend that includes sand and requires the straw be chopped. It feels like ashen cake frosting. As I stomp out to the building site, my childhood friend David says, "She resembles an ark, doesn't she?" He would know, having spent years at sea as captain of a yacht.

Now he has come home to stay, and hopes to raise a family with Ariana, his Canadian fiancée.

David and I grew up in this intentional community - commune is the outdated term - three hours from Anchorage. For a long time, most people assumed that the wackos who build their own houses and teach their own children were stoned or brainwashed or both, too far gone to know even who among them had fathered whom. Fuelled by pop culture and the few collectives that make the 6 o'clock news, these stereotypes could scare outsiders. Their fear in turn bred fear among the feared, who then withdrew further. Until recently, most collectives hunkered down and shaded themselves from the public eye.

But now the movement is undergoing a resurgence.

Created to foster sustainable communal living, the Global Ecovillage Network marks its 20th anniversary this year and has seen its membership triple in the past decade, to nearly 1,000 communities. And even that is likely just a fraction of the actual number of ecovillages, urban cooperatives, agricultural parishes and other collectives. New settlements sprout up all the time, and many others are emerging after decades of hermitic existence.

Our community is one of them. Today, it consists of about 45 people, and many are members of the original four families who set out 30 years ago from Boston on a journey that saw them cross the continent in an attempt to leave the modern world behind.

When my parents and the three other founding couples bought this land two years later, there was nothing but evergreens and muskeg on it. Now, 10 log cabins are spread around "the block," a D-shaped loop at the centre of our 80 hectares. Also on the block is a two-hectare grain field, a garden the size of a football field with dozens of raised beds, and several greenhouses. Next to the Barn, beside the volleyball court and soccer field, stands the heart of the settlement - the Longhouse, a T-shaped building made of logs and covering more than 1,000 square metres.

It's good to go back, to be away from office deadlines - occupied instead with mud and power tools.

Each time I come home - and I do still consider it home - I look at this place, these people, and wonder: "What if I don't board the plane back to New York?

Would I be happier if I just left city life for good?"

A father's troubled past

This crisp morning, my father is using a crowbar to rip out lath that hasn't been installed properly above the windows on the Barn's west wall.

"A little 'unbuilding' to start the day, Dad?" The joke is that we build to unbuild to rebuild it right.

"Measure twice, cut twice," he shoots back.

Dad is often on the site by 6 a.m. and rarely reaches the Longhouse before a chef blows the conch for dinner. (Mom sometimes finds mud and bits of hay in their bed.) He has had a hand in building everything: the cabins, sheds for tools, the sawmill and the central wood-burning heater, the blade-sharpening shack, the plumbing house, the slab-wood fences, the open-air storage units, the treehouse and dozens of birdhouses - even a hill for sledding made of scaffold and plywood.

To spearhead the Barn, he learned straw-clay building - a modern version of an ancient technique. His enthusiasm for the project, by far his biggest, makes him a de facto boss, but he'd be annoyed if someone called him that. Seeing him now - cracked boots dangling off scaffolding; long johns hoisted well past his bellybutton - it's hard to imagine how different his childhood was.

Dad grew up in Europe and in Yonkers, outside New York, the only son of an international banker and a journalist-turnedhousewife. He could relate to neither his stern immigrant father nor the community - "never mind Catholicism and the snobbery of the affluent class," he says one afternoon.

We have put down our tools for the day and are sharing a beer in the cab of a Ford F-450 dump truck - which makes a pickup look like a golf cart. The worst of it, he says, was "the grind of school and Daddy beating you if you told the truth of what you learned that day: nothing."

I've heard these stories for years, but now my father can laugh off the paralyzing multiplication drills my grandfather administered or the regular paddling Dad received at a Jesuit boarding school in England.

The day he dropped out of St. George's, a prep school for New England's elite, his mother feared the worst. She told him to pack up and leave before the patriarch's commuter train arrived that evening.

Grandfather eventually calmed down, and arranged for Dad to attend Georgetown University - where he "majored in drugs and minored in women." But when he dropped out again, his father couldn't forgive him. Only years later, after my grandfather was gone, did my family and my grandmother reunite.

Hearing these stories, I'm surprised at how funny - and philosophical - my father has become.

Now, he understands his own father's heavy-handedness: "The changes in the air in the sixties made him very nervous," he says.

"My failing grades were a symbol to him of losing everything good and worthy in American life."

Dad has worked hard to create this other life. It's not the kind of work most people think of as productive, the kind that involves time clocks and annual performance reviews. The truth is: He hasn't earned a wage since I was in diapers.

A nomadic existence

After leaving home, Dad found work as a roadie with a travelling women's acrobatic troupe, only to be fired when the ladies began fighting over his attentions. A series of grim gigs followed. He worked for Boston's only livewire electrical company (which repaired circuits without turning off the power - at least one employee a year was severely burned or killed) and as a landscaper (he and a co-worker regularly drank a case of beer on the drive home). He was borderline suicidal, and self-medicating with alcohol. "There was nothing worth sticking around for," he told me.

Then, in 1981, he met my mother. She worked in the warehouse of a distributor of organic cotton futons, and he handled deliveries.

One day, he gave her and a friend a ride home, circling the city to drop off the friend first, then talking Mom into going for tofu sandwiches.

Born in Colombia, she had travelled around with her mother and, at 17, had clear, walnut eyes as well as a clear sense of what she wanted out of life: to create a village. A few months later, on a windy beach outside Boston, my father proposed. They wandered a bit but, four years later, were back in the city with three children and renting a large house with other countercultural couples in the Jamaica Plain district.

Many like-minded people moved through the crowded house on Asticou Road. Some stayed. Among them was a voluble and flamboyant man - like the others in this piece, he has asked that I not give his name - who had become so alienated while growing up near San Francisco that he once spent hours in a field waiting to be picked up by extraterrestrials. His grades had been good early on, but he felt he was being trained to work against his classmates. "School was the lines of the play we learn to be able to fit into society," he tells me one afternoon last June, seated on a couch in the Longhouse.

Even so, he followed his future wife to college, where he studied literature and biology. After graduating, he and his wife moved to Boston and met those who were to found our community.

The couple started a family and ran a vegan bakery, but then sold the business, and he wound up just wandering around Boston.

Some days, he'd ride the subway for hours, watching commuters come and go, in thrall, as he puts it, to money and power and reputation - "things that didn't interest me." He ended up collecting welfare and, before long, a mental-disability allowance from the federal government.

Another founder had her own troubled history. After dropping out of college, she had become an Aspen ski bum, and considered herself lost and purposeless. All she wanted to do was "go somewhere warm and drink."

I run into her in the Longhouse movie room on this visit home, the sun lighting up her greying red hair. The community's threadbare beginnings make her laugh today, and she can't quite believe they made it to Alaska. "I wanted to think a different way," she says, a trace of Minnesota still in her voice. "I didn't want the thinking that my mother had or my father had - or anybody that I knew had." Among other things, she insisted that her kids not go to school, to her "a colossal waste of time."

From the start, the parents refused to exercise much control over their children. Early on, this led to conflict with the world around them. Our neighbours in Boston called child-protection agencies many times and for many reasons - the seven-yearold boy in home-sewn clothes who shoplifted a Snickers bar; the toddler who shoved a fork into an electrical outlet, mangling his thumb. My mother - who still had the baby face and high voice of a girl - fed us seaweed soup on the porch, pushing the blue-collar Irish around us out of their comfort zone.

The founders were staunchly vegan, a diet many doctors at the time thought of as borderline child abuse. Whenever a physician told Mom that I had low iron, or scolded her to feed her kids milk, she was unable to sleep, afraid the state would take us from her.

Up the Alaska-Canada Highway

In October, 1985, when I was 3, the founders left the unwelcoming cityscape and headed west. We spent that winter in northern California at a vacant summer camp, but had to leave come June when the kids returned. Three months later, we were living in a campground on the outskirts of Seattle; landlords slammed doors in our faces when they saw all the children. Winter was coming again, but the founders decided to keep going north - to Alaska.

They knew no one in the "last frontier."

The former ski bum was younger than I am now, and had five kids. I ask if she had ever had second thoughts. "I was afraid to go, and I was afraid to stay," she replies. "I knew this was the only shot we had - as individuals, and certainly as a group."

In September, 1986, they drove up the Alaska-Canada Highway through British Columbia and Yukon in search of a place to put down roots, come what may.

"There were no leaders and no followers, no vertical relationships," she says. They weren't even particularly fond of one another. But they shared a dream: to begin a new society and to use "nature as a picture of what life could be."

After they reached Anchorage, the men scouted for land from Hope to Homer, Fairbanks to Valdez. On the brackish south Alaskan shore, they found five level acres several miles from the nearest paved road. For $300 down, the owner threw in a path, which he bulldozed 100 metres into the woods.

The men put up tepees. "When I walked in, there was a dirt floor and a fire pit," the ex-Aspenite recalls. It was home, and far off the highway.

The last frontier has long offered solitude and an opportunity to moult. It also has oil, which offers some financial security even for those who don't own oil fields - in the form of the Permanent Fund Dividend (PFD), a state-issued cheque, usually for about $1,000, given annually to every resident. The founders didn't know about the dividend before heading north, but it proved indispensable. In Alaska, a state with many idealists and loners, they found both a homeland and a means to build.

Just two years earlier, people who lived far away and spoke a different language had done much the same.

The Canadian connection

An exceptionally lean man pours grape-sized onions into pails in a field that is edged by swaying oaks and by maples that every year bleed sap into tubes and buckets. This is Quebec's Eastern Townships and another home for dreamers - La Cité Écologique, where my friend David's fiancée grew up. (The two met on GreenSingles.com, a dating site for ecologically minded people.)

It began as a summer camp whose kids didn't want to return home to public school. Humouring them, the camp counsellor, Ariana's father, conspired with his charges to sway their parents; before winter struck, some 30 families had quit jobs, and pooled enough money to purchase a large parcel of land a few hours east of Montreal. Some 30 years later, it ranks as one of the oldest of Canada's ecovillages.

La Cité runs several green businesses: an organic farm, a factory that makes bamboo and hemp workout clothes, and an import company that hocks spiritual knick-knacks. But at the heart of the community beats a public school which, combined with La Cité's businesses, offers a practical education much like the hands-on learning I got in Alaska.

The spirit here is similar to that of my childhood. The intimacy of family - of shared meals, classrooms and electrical bills - extends to dozens beyond family lines.

In the field, the lanky farmer waves his hands and tries valiantly to communicate to me in broken English - three bulbs, three inches into the ground, over an acre. The whole community repeats this routine of bulbs and dirt. Kids chase each another.

Grandparents tell stories and laugh. Later, we drink beer and play volleyball before heading to the communal kitchen to make late-night pizzas.

David and Ariana went back and forth on deciding which community to make their home, but settled on Alaska in the end.

She had already been lamenting the decision to let La Cité residents start their own businesses (as long as they make a financial contribution to the community as a whole). The individualism, she says, has created haves and have-nots. "Our goal ... was to keep the young people," Ariana says - too many were leaving to seek their fortunes. "It's good in a way, but it just makes the community more materialistic."

Historically, many intentional communities have disbanded because of disagreements about money. But some have avoided the financial pitfalls of their early hippie predecessors.

Intentional communities are each unique, but a certain earnest idealism, a hope for what the world could be, and a determination to play a part in its transition, shines through every communard I've ever met. My mother says one has to be both desperate and visionary to start down her path.

Winter in a tepee

It still hadn't snowed a month after we arrived in the woods in the fall of 1987, but each morning we cracked the frozen puddles in the paths between the tepees. One afternoon at a diner in town, Evan Macik heard a few founders discussing how to survive the winter. A logger who yells even when his chainsaw is off, he claimed that building with logs was the easiest thing in the world. He brought them to see a cabin that, he said, a one-armed homesteader had put up in three days.

They gave Mr. Macik half of their first PFD payments to bring them some logs, only to discover that, when he said September, he really meant March.

"So - winter in Alaska with two layers of cotton between us?" one founder asked.

"Well, we'll see," another replied.

That Christmas, after waking my two younger sisters and baby brother to unwrap presents, I stepped outside. More than two metres of snow would fall that winter - almost seven feet. Snow berms around our tepee village towered over my head. I had decided to show my haul - a dump truck and some action figures from the Salvation Army - to my best friend, whose tepee, maybe 30 feet away, glowed like a lampshade in the still-dark morning. But I was not welcome; his family wasn't celebrating Christmas (the founders wavered on such traditions; some years we observed Thanksgiving and Easter, other years full moons and solstices).

"Go home," said the man of the tent. I scurried away in Mom's Arctic army boots - but slipped where seepage from a faucet had turned the path into a rink. Hearing me scream, my father jumped out with a hatchet and flashlight, ready to wrestle a winter bear in his red one-piece pyjamas.

As he picked me up, he said, "Oopsie." I hurt myself a lot as we ran through the woods like feral children; Oopsie would be my nickname for a decade.

A month after my spill, we were hiding under heavy sleeping bags at the back of the tepee, playing cards, when Dad said, "War." We had both slapped down jacks, so I dealt my last three cards and then waited for him to do the same. But he didn't move, even when I said, "Hurry up, Dad."

Instead, he just stared at the tepee wall.

Like all the founders, Dad has been officially diagnosed with a mental-health disorder - in his case, paranoid schizophrenia. As well as payments from the state oil fund, they receive monthly disability cheques. A community motivated in more or less equal parts by an inability to function in the outside world and a determination to get away from it ended up living off its avails.

Finally, the spell broke, Dad flipped over the six of hearts - and won. "Let's go again," he said.

A is for adzuki

The following spring, Mr. Macik delivered the logs he had promised six months earlier. We kids helped our mothers debark them with drawknives - steel blades as long as my six-year-old arm, with perpendicular handles attached to either end.

The men stacked courses as if playing with giant Lincoln Logs.

We built six cabins that year, chipping off ice to finish the one for the last family - who moved in on Dec. 22. A few sheets of plastic tarp covered the windows to shield us from minus-30 cold.

Within weeks, one woman had delivered her sixth child. And then Mom's fifth - my brother Alex - came along. The mothers set futons at the foot of barrel stoves and nursed newborns under duvets. The temperature didn't break zero for another month.

That winter, Mom began teaching us how to read. She was 25, had spent most of her adult life pregnant or nursing, and kept her most prized (inanimate) possessions in a manila envelope above the sewing machine. The day the schooling started, she brought it down and showed us poems she had written as a teenager, as well as our first primer, A is for Adzuki, which as a precocious 12-year-old she had written with her mother.

"A is for adzuki, small and red," she read aloud. "B is for burdock ..." I caught on quickly. In that first year, I remember painstakingly sounding out brand names.

I was just as happy taking 20 minutes to master the word "Mitsubishi" as I was using the company's laser-disc player to watch Star Wars.

My parents taught us what they felt was needed, but they didn't insist we learn much beyond arithmetic and basic English usage. Instead, they talked - discussing everything with each other, with us, and with the other families - building new values from the ground up. We were rarely made to study if we didn't want to. Because I loved to read, I read a lot; others didn't.

But we all pretty much absorbed the same life skills. By 12, I could fell, limb and buck a spruce tree with a chainsaw; raise a tepee; fertilize, weed and harvest a greenhouse; balance a communal budget and pay bills; drive a tractor; sew a pair of pants; change a diaper; mill rough-cut lumber, sand it down and build a table; place a wholesale food order for 40 people; can a gallon of salmonberries; and return a snot-nosed toddler to the right home down an icy road on a pitch-black winter afternoon.

Kids were given spending money. But when your parents are not only the gastronomic Gestapo but also poor, the snack options at the supermarket are limited.

We were not allowed sugar, animal products or any chemicalsounding ingredients, so I always made a beeline to the bulk section for healthy (and cheap) peanuts and raisins.

Somehow, despite our poverty, the elders scraped together enough cash or air miles to send teenagers abroad to see foreign cultures as a part of our education. With the same friends, I both hiked the nearby Chugach Mountains and wandered the distant alleyways and hillsides of Katmandu, Santiago, Phnom Penh and Lisbon. We came back with stories about hairy bus rides through steep mountain passes and about poverty like we'd never imagined.

The founders had faith that we'd pick up all we needed to thrive in their universe. They were less concerned, however, with our success "out in the world." Each of us met the local board of education's basic threshold for homeschooling outcomes, but I suspect some would have needed remedial classes to get into college. I found my way there at 22. The discipline and structure of school were exactly what I needed after a lifetime of running in the woods.

How babies are born

On July 4, 1991, I was nine and getting ready to head down to the beach to watch the Independence Day fireworks when my mother's water broke. Her sixth child was on its way.

That evening, while most of the community watched the fireworks, our family stayed home, anxious to see if it was a boy or a girl. Dad hovered nearby but after an hour went outside and started levelling the gravel driveway. He could never stand still for long.

When the baby's head finally crowned, I ran to let him know, and he said, "Great - come tell me when you see its chin."

Mom instructed us to get ready.

Katie, then seven, fetched a large bowl with warm water. I ran to the sewing machine for scissors and rubbing alcohol from the medicine cabinet. Soon after Dad came inside, Lauden was born.

He was round and pinkish, like midnight sunlight shining on the cabin's peeled log exterior.

Since giving birth to me at 18 in a fourth-floor walkup in San Francisco, Mom has had no serious problems with home births. Only one child, her 10th, has arrived in a hospital - she wanted to show her daughters that wherever they decided to give birth was perfectly fine.

She didn't enjoy the experience, though. The next time her water broke, on a sunny June day, she huddled on the muskeg behind our house, alone. She was 37 and, apart from the baby bump, as skinny as the young, northern spruce all around her.

Without people fussing, she could relax completely for the easiest and least painful of her 13 deliveries. Afterward, she walked out of the woods. On one arm was a stack of bowls abandoned by berry-picking kids; on the other was a newborn in a blanket.

Communality, and quiet

The Longhouse, as the heart of the community, is a source of laughter, clanking pots and pans, and guitar chords. A home theatre occupies one wing of the ground floor. The other is the kitchen, where crews prepare communal meals using a woodfired stove and two gas ranges. The three sinks are commercialgrade stainless steel and the counters have butcher-block tops.

The building's loft houses the office, library and sewing area, while wooden shelves and calico dividers partition the basement into small dens for sleep and privacy. You learn to use headphones or just tune out neighbours' tiffs and nocturnal noises.

Every morning, residents of all ages gather in the movie room, many clutching mugs of steaming tea. Daily meetings are how the community finds common ground, explores issues and makes decisions. They begin with silence - sometimes 20 seconds, sometimes 20 minutes - until someone chooses to start the conversation. No subject is deemed too mundane or personal. People may discuss carpooling and composting schedules, or a personal glimpse into infinity.

One morning on my visit home last summer, a founder and I are sitting in the cabin where he raised eight kids after his wife passed away. Half of them now live outside the state; the others live at the Longhouse, where two of his girls have started families of their own. In the centre of the cabin is a drawing table with architectural plans for a serpentine staircase he's building in the Barn. His bookshelf is lined with titles on mathematical theory and Eastern philosophy. Tacked to a corkboard is a question, each letter scissored from a half-sheet of paper: "What then?" "Really early on in life, I became aware that it all had to be one thing," he says. "That whatever it is that made all this, is it."

He grew up in a Boston bedroom community he calls "absolutely average" - white, Irish-Catholic, traditional. He felt stymied, and by 1965, after a year of studying architecture, had dropped out of Notre Dame, "fundamentally interested in something other than what my so-called talents could point to."

He recognized kindred spirits in the group that had gathered in Boston. They didn't want simply to "talk about this stuff in coffee shops," or "practise one thing but preach another."

As we talk, a moose and two brick-red calves come to snack from the birdfeeder outside his window. "You can have these wonderful, highfalutin ideas, but how to have that actually become your experience requires quietness," he says, after shooting a few photos. "The quietness of how reality is, like the quietness of the woods."

Building more than a barn

A few days later, I sit with Dad in the dump truck, talking about the early days. "Those were crude times," he says. "We were very trial and error-ish."

Sometimes, I feel like I was raised a lab rat. But there's little doubt that, had they not gone to Alaska, my father would probably be dead by the bottle and Mom would be a miserable suburbanite, dependent on antidepressants to stave off the deep sense of alienation she felt as a girl.

They and their companions had to build a refuge.

And their building has never stopped. Once the massive Barn is finally finished, it will house a raft of services: shops devoted to carpentry, welding and mechanics; an art studio with a pottery wheel and kiln; a space for yoga and dance; and a rock-climbing wall (if my brothers get their way).

But the Barn's greatest value, I believe, has come from its construction - which has allowed members of the second generation to claim the community, physically and emotionally, as their own.

More than half of my peers have stayed and started families: They refuse to trade the deep sense of belonging for a career and the hectic pace of modern life. They will not end up leaving home.

Connor, 19, with a tangle of red hair, is the eighth of my 12 younger siblings. He has never lived anywhere else, and plans - as I still did at his age - to raise his family right where he is. But more than me, Connor is enamoured with many aspects of the simple life - he has a penchant for fermenting and farming.

Only one of his seven older siblings currently lives at home. The rest of us are scattered across the lower 48. But we return. If we didn't, Mom's heart would crack, again and again.

A new beginning

A week after we finished the Longhouse in 2002, I moved to Seattle with three other young people from the community. We were going to become a big rock band. Over the ensuing years, I drifted out of bar bands and into college classrooms. I moved to Texas and then New York.

At times, especially since landing in New York in 2010, I've had to balance school with as many as four jobs. As my father did in his 20s, I have worked a series of lowpaying gigs: assistant carpenter, nanny for a little boy with two moms, pedicab driver, personal vegan chef, administrative assistant, and the thankless gamut of restaurant and bar work. But I've managed to return home for at least a few weeks every summer for the job I've enjoyed most: sloshing muddy spaghetti.

If my parents could write this story, it would end with me tiring of New York, and, like my friend David, going home for good.

I have one tattoo etched on each of my arms - a heart for my mother; a hammer for my father.

When I first showed them to Mom five years ago, she scowled.

"Just don't cover your whole body - that's gross." Then, with a hint of a smile, she asked to see the heart again.

Despite her protests, I see that I need to get six more tattoos - one for every founder. They don't always agree with my decision to embrace what they left behind, but each is like a parent to me.

Still, when I go home each summer, for me the dream I shared with my extended family has faded a little more.

Nowadays, I live in a community of eight million strangers. As I enter my building, one of them exits the elevator. The Dogman has buzzed hair the colour of rain clouds and wears a sleeveless shirt that looks like it would better fit his young twins - who both have hair like their father's.

Only three dogs pull the Dogman along today, each with a toothier snout and nastier snarl than the last. I smile and say hello, holding the door open. He nods. He's as strange as anyone I grew up with in Alaska, but I don't know the Dogman's name, and he doesn't know mine.

Perhaps one day someone will introduce us.

Emrys Eller is a student at the City University of New York Graduate School of Journalism.

The Banff Centre inspring creativity

Every summer, the Banff Centre - the arts, culture and education incubator - offers a handful of established non-fiction writers the opportunity to spend a month-long residency developing a feature story under the guidance of faculty mentors. The program encourages writers to explore new ideas in journalism and to experiment with creating a piece that might otherwise be difficult to complete. This is part of an occasional series in which The Globe and Mail partners with the centre to publish a selection of those stories.

Associated Graphic

ROB DOBI FOR THE GLOBE AND MAIL

ROB DOBI FOR THE GLOBE AND MAIL

Tuesday, March 03, 2015

Correction

A concluding paragraph in a Saturday Focus feature on Alaska incorrectly said The Globe and Mail partners with the Banff Centre to publish a selection of stories [such as the one in Focus]. In fact, although The Globe frequently publishes stories written in Banff's Literary Journalism program, the Literary Journalism program is independent and has no prearranged publishing partnerships.


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