Watt not quite sure what he's got himself into
Houston DE lends voice for episode of South Park, but he was a bit worried he'd be made fun of
The Associated Press
Saturday, December 13, 2014 – Print Edition, Page S7

J. J. Watt has moved from the football field to South Park. A cartoon version of Houston's defensive end appeared briefly on an episode of the Comedy Central show this week. He appears in the episode called (#)HappyHolograms as part of a Christmas special some of the characters on the show were involved with. He's depicted in his No. 99 jersey hugging a reindeer.

Watt said he wouldn't watch the show, but was a bit worried that they'd make fun of him. "I have never seen an episode of South Park before, but I've heard what they do to people, so it will be pretty interesting to see what they have to say," he said before it aired.

Even though he was slightly concerned about how he would be portrayed, he took it as a compliment that they decided to use his likeness in the show.

"There are some pretty big names on there, so it's an honour," he said.

Watt, third in the NFL with 141/2 sacks and who has scored five touchdowns, said a lot of people had talked to him about South Park since the image was leaked a few days ago.

"A lot of my friends think it's really, really cool, so I guess that means something," he said.

Support for Harbaugh

Pete Carroll and Jim Harbaugh have had their share of tense moments over the years, from the college game to their moves to the NFL. Yet Carroll, the Seattle coach and Harbaugh's biggest rival in the National Football Conference West, is supporting his 49ers counterpart at a time everybody figures Harbaugh is on his way out.

Harbaugh has one season remaining on the five-year, $25million (U.S.) contract he signed in January, 2011. His Niners play Sunday at Seattle, where the Seahawks beat San Francisco by six points in the NFC championship game last January on the way to a Super Bowl title.

Carroll said he wouldn't comment on the "garbage" of speculation surrounding the future for Harbaugh, who recruited Carroll's son to San Diego.

"I've never seen him not be a really good coach," Carroll said. "He's a fantastic football coach. I've watched him do all the stuff he did at Stanford and turned that program around. What he's done at the Niners, I know that he's a great football coach. Not everybody likes everybody or gets along with everybody, but sometimes they don't see the magic that guys have. I think he's a fantastic football coach. He's proven that. There's no question about that."

One of their infamous moments came in a surprising 55-21 rout by Harbaugh's No. 25 Stanford against Carroll's 11thranked Southern California team in 2009. The Cardinal even attempted a two-point conversion with the game way out of reach, prompting Carroll's infamous "What's your deal?" when the coaching rivals met afterward at midfield.

"He's a stud. He ain't going to waver," Carroll said. "He's going to keep battling and do what he does. He's a great competitor.

Always has been. That's why they're so dangerous coming in right now because of his leadership, his toughness about the way he runs his program. I have tremendous respect for him.

"All the other stuff you guys have always thought was going on [between us], there ain't much to it. This is two football guys going at it, two guys that love to compete and battle and there's nobody I'd rather play. I love playing against him and that's the way it's been since the beginning."

Coming home

This is the time of the season when bottom-of-the-roster transactions pick up with teams positioning for next season. So on the surface Minnesota's signing offensive tackle Carter Bykowski off San Francisco's practice squad was no special move.

Except that Bykowski grew up in Eden Prairie, Minn., a few miles away from where the Vikings have their headquarters, playing in high school for coach Mike Grant, the son of former Vikings coach and Pro Football Hall of Fame member Bud Grant. Bykowski was a boyhood friend and teammate of Ryan Grant, Mike Grant's son and Bud Grant's grandson, so he's no stranger to one of the most influential figures in franchise history.

"He might not recognize me or remember me. I was 240 back then in high school," said Bykowski, who's listed at 6-foot-7 and 306 pounds.

Bykowski went to Iowa State as a tight end but moved to tackle as his upper body filled out. He was a seventh-round draft pick by the 49ers in 2013.

"I had a great time there, but it's a good opportunity here so you've got to take advantage of it," he said.

The call from his agent with the news on Monday was entirely unexpected for Bykowski.

"It was unbelievable. It's pretty sweet to go home," he said.

Suh's swan song?

This weekend could be the last home game at Ford Field for Ndamukong Suh. The Detroit defensive tackle can become a free agent after this season.

The Lions are in the mix for a postseason spot, but there's certainly no guarantee of any more home games after Sunday's against Minnesota. Suh isn't tipping his hand on any future plans.

"Not a clue," he said Wednesday. "It's not my decision."


Suh said reporters should talk to Jimmy Sexton, his agent, if they want information on his free agency.

"It'll be Jimmy's decision, so we'll go with that," the Lion said.

Chicken or fish? Von Miller is still in the bird business, raising chickens back home in Texas. But now he's also into fish.

The Broncos pass rusher said he just purchased a 1,135-litre saltwater tank for his home in Denver. He wanted some sharks, but they'd knock over the colourful coral. And he doesn't want to mix predators with nonpredators. So he's still deciding which fish to get.

Miller said he can't have a dog because he puts in such long hours at work, so he went with the fish tank.

When teammates asked him this week where they could buy some tropical fish themselves, Miller whipped out his phone and told them, "No, don't go to a pet store. I'll hook you up with my fish dude."

He's a got a guy that handles his fish?

"Yeah, he said he'll come over, and every week, to check on them," Miller said. "He's my fish dude."

One-back Bengals

The Cincinnati Bengals are moving away from their two-back approach.

Cincinnati originally intended to use Giovani Bernard and rookie Jeremy Hill as complementary running backs. Bernard started the first seven games before he was sidelined for three by shoulder and hip injuries.

Hill emerged in his absence, running for more than 150 yards twice.

Offensive co-ordinator Hue Jackson tried blending Bernard back into the mix for three games, with unsatisfying results.

Hill carried only eight times for 48 yards during a 42-21 loss to the Steelers on Sunday, while Bernard had six carries for 17 yards.

It's apparent that Hill, more of a power runner, will be getting the bulk of the plays going forward.

"I'm used to having one guy kind of dominate some carries because in order for backs to be really good, they've got to get lathered up to play," Jackson said. "You've got to get a feel for the game.

"We have two capable guys and they're different guys and we'll let it play itself out, but I think we have a pretty good idea which way we're headed."

Get along with the players - or else
MacLean, Ottawa's now-ex-coach, didn't adhere to the golden rule: Superstars may need special treament, but they're worth it
Tuesday, December 9, 2014 – Print Edition, Page S3


Six hires before Paul MacLean, there was a man who served as head coach of the Ottawa Senators for just two games.

His name was Roger Neilson and the Senators gave their assistant coach, who was fighting cancer, the courtesy of reaching the 1,000-game level by having him act as head coach for two games, a win and a loss, in the spring of 2002.

It was Neilson, who died a year later, who left behind one of the irreversible laws of coaching, a lesson he had learned while coaching the likes of Mark Messier in New York and Brett Hull in St. Louis: "Your highly skilled superstars can take a lot of time, and they often take special treatment - but the point is, if you don't get along with them, it's going to cost you your job."

In retrospect, it is worth looking again at the Senators' Sunday evening match against the Vancouver Canucks. Not at the score - though Ottawa's 4-3 victory in overtime was a magnificent comeback from being down 3-0 - but at a heated exchange during the game between the head coach and the head player, captain Erik Karlsson. Neither would say what was said; there is no need to know.

MacLean had been pegged for dismissal for more than a week. The Senators were in a five-game skid, the prospects of a playoff berth were dimming and the players were making little secret of their growing dislike of their coach.

This is hardly news in sport. If you're winning, as in Scotty Bowman, the players are welcome to hate you all they wish; you've nothing to fear. If you're losing, the players can turn on you or, more usually, simply turn off.

General manager Bryan Murray, who gave MacLean the news at 9:30 Monday morning, admitted to not being amused by MacLean's weekend comment in Pittsburgh, where Ottawa lost its fifth in a row, that he was "scared to death" of whom they were playing - something he has often said - but now equally scared of whom he was putting out to play.

"Maybe it was in jest," Murray said. "or maybe he didn't believe in the players."

At the end of last season, when MacLean's team failed to reach the playoffs, Murray had expressed his disappointment and said, tellingly, that the players were telling him they wanted "the old Paul" back. The new Paul, in the first season after winning the Jack Adams Award as the NHL's top coach, had changed in their opinion, becoming far more hardline.

"Some of the better players felt singled out a little too often," Murray told a news conference Monday afternoon.

The GM said the organization decided to give the 56-year-old MacLean another chance and reevaluate after 20 games. It was not that bad, then, but recently the team's prospects had worsened. Murray, himself struggling with cancer treatment, decided to act after talking it over with several players.

"I've had some tough days lately," he said. "This is one of them."

Murray says he believes he has not underestimated his players, that the much-maligned defence is not nearly so bad as advertised.

He accepts that any success the team has had is largely due to the high-standard goaltending of Craig Anderson, but he believes the team can improve on its forecheck and puck movement, as well as on cutting down on the scoring chances they give up to opposing teams.

Murray further claimed that Sunday's win may have been directly connected to falling behind 3-0, that the players threw structure into the stands and just "played."

"Our players have to have fun," he said. "It's a game."

Since Murray took the Senators to the Stanley Cup final in 2007, he has hired and fired John Paddock, Craig Hartsburg, Cory Clouston and now MacLean. His fifth hire is a promotion - assistant Dave Cameron is now taking over the head coach position.

Cameron has long been a favourite of team owner Eugene Melnyk, as he once coached Melnyk's junior team, the Mississauga St. Michael's Majors. Cameron, 56, is a former NHL player and had previously been head coach of the Senators' AHL team in Binghamton, N.Y.

He is best known, however, as coach of the Canadian team that so dramatically lost the World Junior Championship in Buffalo in 2011. In the gold-medal game, Cameron's team took a 3-0 lead into the third period, only to be outcoached by Russia's Valeri Bragin, who watched as his young squad scored five straight goals to steal the championship from Canada. Critics thought Cameron froze under pressure, failing to call a timeout when he should have and leaving shellshocked Canadian goaltender Mark Visentin in net to suffer the humiliation.

Cameron now inherits an Ottawa Senators team with an 11-11-5 record and a GM who believes there remains time to take a run at a playoff spot.

He also inherits some remarkable underachievers, chief among them Milan Michalek, who signed a three-year, $12-million (U.S.) deal in July and has all of two goals this season. Colin Greening, on a deal that pays him $2.65-million a year, has zero points and has proved unplayable. Bobby Ryan, the superstar signed to a seven-year, $50.75million contract extension in the summer, has but five goals - but may be awakening following his three assists against the Canucks.

There is much work to be done and much discussion as to how much can be done by a coaching change.

As Bob (Badger) Johnson, another great and late coach, once said, "There are times when I may as well be up in the stands, having a cup of coffee with the press, for all the control I have."

Follow me on Twitter:@RoyMacG

Associated Graphic

Ottawa Senators general manager Bryan Murray told a news conference Monday that 'some of the better players felt singled out a little too often' by fired coach Paul MacLean.


All in a day's work for Humphries
Two-time Olympic gold medalist will race in two-woman event, then break the gender barrier in the four-man competition
The Canadian Press
Tuesday, December 16, 2014 – Print Edition, Page S4

CALGARY -- Kaillie Humphries is preparing for a historic and hectic day in her bobsleigh career.

Because of a quirk in the schedule, the Canadian pilot will race her signature two-woman event and about an hour later make her World Cup debut as a four-man pilot Saturday.

Humphries and Elana Meyers Taylor of the United States will be the first women to pilot four-man bobsled in a World Cup. Both will do double-driving duty in the men's and women's races at Calgary's Canada Olympic Park.

"When it rains, it pours, you know the old saying," Humphries said Monday in COP's Ice House.

"It's going to be a very intense day.

"I haven't ever had to be in this situation before. I'm not able to draw from experience. No one has been in this situation, coaching staff, nobody. It's going to be trial and error. We're going to face it the best way we know how."

Humphries has logged four runs at Olympic Games and world championships, but they're spread over two days. On Saturday, the second heat of the women's race starts at 12:30 p.m. local time, followed by the first heat of four-man at 2 p.m.

So Humphries, the two-time Olympic gold medalist, and Meyers Taylor will have little time to mentally switch gears between the women's and men's races.

"I've never had to do four allout runs in one day, let alone with limited time in between," Humphries said. "It's new for everybody, not just for Elana and I, but for the rest of the world to be in this position.

"It's not set up perfectly, but nothing ever is. You learn to adapt and overcome and this is going to be one of those situations."

The World Cup event kicks off Friday, with men's and women's skeleton and men's two-man bobsleigh.

Humphries asked the sport's world governing body in May to allow her to pilot a men's sleigh.

With just six weeks until the start of the 2014-15 racing season, the FIBT gave her the green light by declaring four-man bobsleigh "gender neutral."

That allows for mixed teams and all-woman teams to compete against men's four-man sleighs.

Humphries and Meyers Taylor, who finished second to Humphries at this year's Winter Olympics, will pilot crews with male brakemen and pushers.

Humphries and Meyers Taylor logged five races on three different tracks on the developmental North American and European Cup circuits to earn their World Cup qualification.

Neither woman raced four-man at the season-opening World Cup last week in Lake Placid, N.Y. They instead chose to compete in two-woman only and postpone their four-man debuts until Calgary. Meyers Taylor won gold in the women's race in Lake Placid.

Humphries and brakewoman Melissa Lotholz of Barrhead, Alta., were fifth. So there is a competition-within-a-competition for Humphries and Meyers Taylor. Both want to prove themselves against the men and beat each other in their new event while they continue to battle for gold in women's races.

"We call it the battle royale between her and I," Humphries said.

"Definitely have some catching up to do in two-man. I'm not in panic-mode by any means. I've got to be able to shift my focus back and forth and sometimes it's not going to go exactly like I planned."

Her crewmen Dan Dale of Grande Prairie, Alta., Calgary's D.J. McLelland and Joey Nemet of Hamilton will all make their World Cup debuts Saturday.

"I have a lot of, you know, 'momma-ing' to do to prepare my guys," Humphries said. "We've got a lot of learning, a lot of preparation.

"We are facing the world's best teams out there and the other brakemen on the other crews, the other side's guys are fairly big and large and can be intimidating."

Humphries and her crew finished fourth and second in a pair of North American Cup races in November in Calgary. They were 17th in a European Cup race Dec. 7 in La Plagne, France.

"I can feel going down the track the strides she's making as a pilot in four-man," Dale said. "We want to give Kaillie the best push possible. Anything we can do to make her weekend easier we're here to do it."

Humphries is grateful the compressed race day will be on her familiar home track. She believes she won't have to race both events on a single day elsewhere this World Cup season.

The 29-year-old has won 11 of her 16 career World Cup races as well as a pair of women's world championships.

Associated Graphic

For the first time in her career, Kaillie Humphries, seen with D.J. McLelland, will pilot a four-man sled in the World Cup.


Glow of strong start a fading memory for Vancouver as Rangers trounce home team
Monday, December 15, 2014 – Print Edition, Page S3

VANCOUVER -- On Friday at lunchtime, before the Vancouver Canucks were embarrassed by the New York Rangers on Saturday night, the Canucks spoke in an almost foreboding tone, a sense that something big pivoted on the game.

The Canucks had started the season strong, and even stood first place in the NHL for a day in late November, but several losses piled up at the end of a long road trip and, suddenly, a frisson of worry cracked through the team.

"No need to panic ... yet," read a local headline.

Coming home, the Canucks themselves did not hide what their 30th game of the season meant, after practising late Friday morning. It felt a little early in the season for such fraught talk but the Canucks offered it up, one after another, like a mantra.

"We know how big of a game it is," said rookie coach Willie Desjardins. "A lot of emphasis on this game," said defenceman Kevin Bieksa. "Key stretch for us this season," said Daniel Sedin of these four games at home before Christmas.

So one might have expected a fiery Canucks at Rogers Arena on Saturday night and instead it was the reincarnated ghost of the Canucks circa last winter, when the team imploded in spectacular fashion. New York pounded at Vancouver in pulsing attacks, four-on-one, three-on-one, twoon-one, and piled in three early, easy goals. The second goal was scored as the scorers of the first goal were recited by the arena announcer.

It was like watching a video game. And the Canucks, in response, offered nothing. They limped out of the first period and limped through the second, managing only two shots on the Rangers net in the first 14 minutes of the middle frame. It was as though the team had given up on this one or, worse, could not conjure any gusto. Final score: 5-1 - which flattered Vancouver, since New York eased up in the final period.

Afterwards, the Canucks doubled down on the fraught talk of Friday. What had been an important game, a key stretch, became far more significant. Vancouver, in the first quarter of the season, had one of its best starts in the four-decade-plus history of the franchise. Now, everything that went wrong last winter feels like it could re-emerge to rip this team apart.

Goalie Ryan Miller talked about the hole the team has dug for itself, and wondered whether the team can climb out of it, or dig itself deeper. Lucky for Vancouver, the next three games are against teams below the Canucks in the standings. Vancouver, even with the hot start, stands in a precarious spot, fifth in the West, with only a small cushion over ninth.

Questions. Where are the Sedins? The twins have 52 points together this year and 22 of those - more than 40 per cent - have come against the very worst teams in the league.

The Sedins have not delivered when it counts.

What of Miller? He was hardly to blame Saturday night - but his save percentage does not look as if it's worth $6-million. He looks, often, 34 years old. During the hot start, Miller delivered when it counted, big saves late in games as his team outscored opponents.

Wins piled up until they evaporated.

Miller on Friday talked about the need for more practices. The Canucks have four in the next week. So the team has it in its hands to wrest itself out of the early throes of a tailspin.

"For us to make progress we have to practise," said Miller on Friday. "You start to notice how every team starts to [improve] about a quarter-way through the season, halfway through the season, and on and on. The teams you thought at the start of the season didn't look so good, they start figuring out how to play as a group."

There had been talk of fatigue at the end of the long two-week road trip - odd to blame for being tired when the season isn't two months old - and Desjardins said his team was still sluggish in practice on Friday. He likened it to skating in sand. A good description of the pinching Canucks chasing after the Rangers on the many odd-man rushes on Saturday night.

"I've never seen anything like it," said Canucks captain Henrik Sedin of the first period. "That was embarrassing."

Before the season began, it was hard to get a precise bead on the Canucks. They surely were set to improve on the worst of last winter - but the team didn't seem poised for anything special. The team internally saw the top six in the Western Conference as fairly set - Anaheim, Los Angeles, San Jose, and Chicago, St. Louis and Minnesota. The Canucks brass pictured the team in a scrap for seventh or eighth. Making the playoffs was the much-repeated measure of success.

The glow of the unlikely start is gone. What can be revived will unfurl this next week.

Canada's new chef de mission speaks the language
Despite his history as a winter athlete, Brassard feels confident taking on the Rio Games
The Canadian Press
Friday, December 5, 2014 – Print Edition, Page S5

One of Jean-Luc Brassard's most memorable moments of the Sochi Olympics came in the hours long after an event, in a darkened, empty stadium.

The Olympic moguls champion was consoling an athlete and his family after a disappointing performance.

"Seeing in their eyes the disappointment that they had, and trying to find the right words, knowing that you don't try to hide the truth, you try just to digest that moment," Brassard said.

"And then you tell them that in a few days, or maybe the following day, you will remember the entire process that brought you there.

So much fun and great memories.

"It's not only about a single result, it's about the entire process to become an Olympian."

Brassard was named Canada's chef de mission Thursday for the 2016 Rio Olympics. His experience in Sochi, as an assistant to Canadian chef Steve Podborski, convinced him that no matter the sport, winter or summer, an Olympian is an Olympian.

"They speak the same language; it's an Olympian language," Brassard said. "And at the end of the day, that made me agree to go for Rio, even if it's a summer Games. It's not so much about the technicality of the sports. There's no more liaison between a bobsleigh guy and a short-track skater than a bobsleigh guy and a 100-metre runner."

Brassard competed in four Olympic Games, capturing gold in 1994 in Lillehammer to become Canada's first male Olympic champion in skiing.

Four years later, he carried Canada's flag into the opening ceremonies of the 1998 Nagano Winter Olympics, where he finished fourth.

He capped his Olympic career at the 2002 Winter Olympics in Salt Lake City.

The Canadian Olympic Committee made the announcement at a Brazilian-themed restaurant in Montreal.

The native of Grand-Ile, Que., spent most of the Sochi Games at the Krasnaya Polyana mountain cluster of venues, "where I kind of belonged."

"It was great to remember my past as an athlete, to try to apply that to find the right words to talk to the actual athletes," he said in a phone interview. "The great thing at the time is I think I had no desire to be an athlete any more. It's long gone for me, in my mind. That case is done.

"But I still want to help the young kids, and I want them to have the opportunity to feel exactly the great feeling that I experienced when I was an athlete, so I tried to find the right words to talk to them. And surprisingly, you don't really take care of the winners, because communications grabs them after the race and they reappear the next morning after they went through all the media. But you spend a lot of time with the people that didn't achieve the result that they wanted."

Since the two-time world champion retired in 2002, he's been a "full-on freelancer," working as a television host, commentator and writing articles on skiing and mountaineering.

He said feels the same thrill watching Canadian athletes compete as he did when he stepped into the moguls starting gate.

"I'm way more emotional," he said. "I don't have a child, but I can imagine it's a bit like how a parent looks at their child. You really wonder how a kid can achieve something so amazing, being by himself on the top of the run, and they have to do the job.

And at an age that most students are in school. They don't even know what they're going to do in life. The only thing that they care is having a beer at night with their friends. But you're asking these athletes to make the performance of their life.

"I get very, very emotional. Every time that I see one of these athletes at the bottom, stepping up on the podium, it brings tears to my eyes. I had the chance in my life to be successful and to feel that, and I'm totally thrilled for them now when they can do it too.

"And I know that they're going to be amazing role models after that. I'm at an age where I find that this is important too."

One of Brassard's first tasks will be getting to know Canada's summer athletes. Some 200 of them will gather next week in Gatineau, Que., as part of a pre-Rio symposium.

"I don't want to walk into the place in my big boots, saying 'Hey, here I am.' I want to do that very slowly," he said.

He'll then choose an assistant chef for the Games, which run Aug. 5-21, 2016.

Bouchard holds serve at WME-IMG
Canadian is now represented by the management agency of such stars as Williams, Sampras, Sharapova and Djokovic
Thursday, December 11, 2014 – Print Edition, Page S3

Eugenie Bouchard's new deal with global sports managing power WME-IMG has the Canadian tennis star being represented by the same agent as Serena Williams and opening new doors in the fashion world.

After a 2014 season in which she reached the Wimbledon final and broke into the WTA's top 10, the Montrealer chose not to renew with Lagardère, the agency that had handled her interests since she was 13. In her new deal, Bouchard also becomes a client of IMG Models, which will open fashion avenues to the 20year-old, who already has a few magazine shoots under her belt.

Bouchard's new management team includes Jill Smoller and Brad Slater. Smoller's star client is currently Williams, the 18-time Grand Slam champion. Her other clients have included Kevin Garnett, Tim Tebow, Pete Sampras, Dennis Rodman and Florence Griffith Joyner. Slater represents Hollywood stars such as Kevin Costner, Dwayne (The Rock) Johnson and Ben Affleck.

"I am really excited about joining WME-IMG, a company that is in the best possible position to help me achieve my business goals and maximize the value of my brand," Bouchard said in a statement.

It's the same agency that handles Maria Sharapova and Novak Djokovic. IMG Models represents supermodels such as Gisele Bundchen and several "Angels" in the recent Victoria's Secret fashion show.

"It's highly significant, since IMG have a really good track record of signing the best - particularly the best golf and tennis players in the world and identifying them early - so clearly they see Bouchard as a future Grand Slam winner," said Nigel Currie, director of Britain-based sports marketing agency brandrapport.

"There is no shortage of major male global superstars, but there aren't nearly as many women, so when one comes along - as we've seen with Sharapova - it opens up a whole raft of opportunities. I would expect for Bouchard down the line deals like watches, cosmetics, luxury jewellery, likely developing her own line, much the same as Sharapova. It's a very competitive global marketplace, and IMG are dealing with the very biggest brands all the time."

Bouchard's celebrity status has exploded in the past year. She began 2014 at No. 32 in the WTA rankings, then reached back-toback Grand Slam semi-finals at the Australian Open and Roland Garros and the final at Wimbledon before making the year-end WTA Finals, reserved for just the top eight women. She crashed the top 10 for the first time - soaring as high as No. 5 - and is a leading candidate for the Lou Marsh Trophy as Canada's top athlete of the year.

In her short downtime before returning to training in December, Bouchard snapped selfies with rapper Drake at a Toronto Raptors game and actress Emily Blunt during an international art show. She played in the Necker Cup - the world's most exclusive Pro Am - hosted by Sir Richard Branson, from which she tweeted a photo of herself dancing on a table with the billionaire. The World Wildlife Fund invited Coca-Cola's newest athlete to Manitoba to go dog-sledding and visit polar bears in the wild.

There has been speculation that she may do as Sharapova, Williams and Steffi Graf have done: pose for the Sports Illustrated swimsuit issue. Her deal with Nike is set to expire, so there could be room for her to join the stable of another apparel company - one less crowded with female tennis stars.

"Genie's unique combination of talent, mental fortitude and charisma make her the type of athlete who transcends sport; and the unparalleled opportunities and partnerships across WME-IMG in areas including tennis, marketing and modelling will help ensure she reaches a new level of global success," said WME-IMG co-CEO Patrick Whitesell and Fernando Soler, head of IMG's tennis division, in a joint statement.

Hiring a new coach is a top priority, as Bouchard recently parted ways with Nick Saviano, who had coached her out of his Florida academy since she was 12.

Last week, she tweeted a photo with the caption "meet the new coach," but it was a shot of her on the court with a ball machine.

Associated Graphic

Eugenie Bouchard has enjoyed herself this off-season, hanging out with celebrities such as Drake, Emily Blunt and Sir Richard Branson.


Brady, Pats continue to roll
Pats QB celebrates 14-year anniversary of pro debut with another win against the Lions by same score
The Associated Press
Monday, November 24, 2014 – Print Edition, Page S2

FOXBOROUGH, MASS. -- The New England Patriots showed off their passing game one week after a brilliant rushing performance.

The outcome was the same: a blowout win over a top team.

Throw in a defence that held the Detroit Lions without a touchdown and two outstanding special-teams plays, and the team with the AFC's best record rolled over the team with the NFL's stingiest defence, 34-9 on Sunday, for their seventh straight win.

"Everyone is linked together," quarterback Tom Brady said, "so we all feed off each other - offence, defence, special teams."

Brady threw for 349 yards and two touchdowns exactly 14 years after his pro debut in another 34-9 game against the Lions. In that U.S. Thanksgiving meeting, the rookie was a late-game replacement for Drew Bledsoe in Detroit's win.

On Sunday, LeGarrette Blount rushed for 78 yards and two short scores and the Patriots improved to 44-3 in their last 47 regular-season home games.

The Patriots (9-2) have such depth that Jonas Gray didn't even play one week after rushing 37 times for 201 yards and four touchdowns in a 42-20 win over the Indianapolis Colts. He was sent away from Friday's practice for reporting late, just one day after Blount signed. Blount was cut by Pittsburgh last Tuesday, the day after he walked to the locker room as the Steelers were lining up for the last play.

Blount rushed for 772 yards for the Patriots last season, but didn't re-sign.

"He's never been a problem for us," defensive tackle Vince Wilfork said. "It was a good welcome back for him today."

The Patriots led 24-6 at halftime as Brady repeatedly found wideopen receivers.

"We blew a lot of coverage," Detroit linebacker DeAndre Levy said. "They sped up the tempo a bit and I think we lost our composure."

The Patriots routed a division leader for the third straight week, following wins over Denver and Indianapolis. They visit Green Bay, which began the day tied with Detroit for the NFC North lead, next Sunday.

In their past five games, the Lions (7-4) have led for 45 minutes, 53 seconds, been tied for 44 minutes, 17 seconds and trailed for 209 minutes, 50 seconds, according to STATS.

For the second straight week, they lost to a conference leader, having fallen to Arizona 14-6 a week earlier. What does that say about the Lions?

"I think we'll figure that out at the end of the year," quarterback Matthew Stafford said.

But they didn't score a touchdown in either game.

"I am not concerned," Lions wide receiver Calvin Johnson said. "We still have time to get things going."

The Lions bore little resemblance to the team that had allowed the fewest points in the NFL. They had given up just 68.6 yards rushing per game, so Brady threw frequently - and quickly to avoid the rush.

He finished with 38 completions in 53 attempts with one interception, with Julian Edelman catching 11 passes for the highestscoring team in the NFL.

"Ever since I've been here, the coach has put it in my ears that football season starts after Thanksgiving," Edelman said.

The Patriots have had quite a head start.

The Lions managed just three field goals by Matt Prater as Stafford completed 18 of 46 passes for 264 yards and one interception while the Patriots shut down his two star receivers. Golden Tate had just four catches after entering the game third in the NFL with 68. Johnson was held to four receptions for 58 yards.

"The coaches believe in us at the cornerback spot, man, and set up the perfect matchups for us," Patriots cornerback Brandon Browner said.

Associated Graphic

Detroit receiver Calvin Johnson snags a third-quarter pass on Sunday. Johnson was held to just 68 yards on the day.


Revamped Vancouver roster impresses early in the season
Friday, December 12, 2014 – Print Edition, Page S3

VANCOUVER -- Two weeks ago, when the Vancouver Canucks rolled over the Columbus Blue Jackets, the Canucks found themselves in a place the team once knew well: first place in the National Hockey League.

The standing was brief - the next day, other teams hopped by the Canucks. Vancouver then slid some more in the past week, as Vancouver lost the last three games of a long road trip. But the team's performance in the first third of this season has been far better than anyone predicted.

There is no single reason. Goaltending has been solid but sometimes so-so or worse. The Sedins produce points against the weakest teams but otherwise have been ho-hum. There is, however, alchemy at work, even if it's not quantifiable. A team that is much happier as a group has fared better than it managed to this point a year earlier.

It adds up to an 18-9-2 record that has Vancouver, as of midday Thursday, second in the Pacific Division and fifth in the Western Conference. Last season after 29 games, the team was fifth in the Pacific and ninth in the West, with a 14-10-5 record.

Finishing strong

The Canucks this season have held on to leads much more tightly than in the first third of last season. If Vancouver leads or is tied after one period, it is 16-2-1, compared with 11-4-2 last year. In one-goal games, the Canucks are undefeated and second-best in the NHL, at 8-0-2; last year, they had won as many one-goal games as they had lost to this point - 8-3-5. The key has been to score in the third. The Canucks this year have been outscored in the first period 16-22 but in the third have outscored opponents 31-21.

A power play with some power

The penalty kill is great, again, ceding even fewer shots than last year's excellent work. And the power play is revived. Last year, the coaches had no real track record of success on the power play. New coach Willie Desjardins ran one of the best power plays in the American Hockey League for two seasons. The Canucks are putting fewer shots on net than last year but scoring more, a shooting percentage of 13.6 per cent compared with 8.7 per cent.

Luck, too

Last year, the Canucks had a .400 winning percentage when they outshot opponents. This year, it's .684.

Five-on-five, outscored

A year ago, the Canucks gave up more goals at even strength than they scored, a for-against ratio of 0.93. The problem remains, with a ratio of 0.95 so far.

More goals in total, however

Canucks average three a game, up from 2.66 at this point last season. That number slumped to 2.33 by the end, as the Canucks scored the fewest goals for a full season in club history.

WTA agrees to 10-year media rights deal
The Associated Press
Wednesday, December 10, 2014 – Print Edition, Page S4

The WTA agreed to a media rights contract it says will be worth more than $525-million (U.S.) over 10 seasons from 2017 to 2026, with plans to produce all 2,000 or so singles matches on the women's tennis tour each year.

The deal, announced Tuesday, keeps the WTA's international television rights with its current broadcast distribution partner, Perform, but expands the scope of the relationship. Their current agreement runs from 2013 to 2016.

WTA chairman and CEO Stacey Allaster called the new deal "a game-changer," and said it will "give fans more access to the players they want to watch."

Under the existing contract with Perform, Allaster said, only about a third of the singles matches at WTA events were produced for broadcast around the world.

"What league in North America only broadcasts a third of their games?" Allaster said in a telephone interview.

Now the tour and Perform are forming WTA Media, which will produce all main-draw matches in singles, along with the semifinals and finals in doubles, at every tour event, plus develop content for the Web and magazine shows for TV.

Allaster said the new deal includes guaranteed annual TV rights fees of $33-million from Perform, nearly double the $17million per year currently. It also includes what she said was "eight figures" a year in "production investment."

The new package adds rights to the WTA's international tournaments; the previous contract covered only higher-level premier events. In a statement, Perform's joint-CEO, Simon Denyer, said his group believes in the "exceptional sport entertainment value of the WTA."

Howe in hospital for dehydration, fatigue
The Associated Press
Wednesday, December 3, 2014 – Print Edition, Page S2

LUBBOCK, TEX. -- Hockey Hall of Famer Gordie Howe was suffering from what doctors and family members said was a combination of fatigue and dehydration when he was admitted to hospital here on Monday, and not from a "significant stroke" as initially reported.

Howe's son Murray told CBC News and The Windsor Star that tests showed there had been no new stroke, and that his 86-yearold father, who was alert and resting comfortably, might be released as early as Wednesday.

It was originally feared the hockey legend had suffered his third stroke since late October.

"He's a fighter," his daughter Cathy Purnell said.

"The man is tough. He has this will to keep going, all things considered."

The man known as Mr. Hockey set NHL marks with 801 goals and 1,850 points, mostly with the Detroit Red Wings, records later broken by Wayne Gretzky.

Purnell said therapists who have been tending to Howe arrived at her house Monday morning and discovered him non-responsive in bed.

Howe remained that way until evening, when Purnell said he recognized family members once he became alert.

Howe suffered what his children called a serious stroke in late October and another in early November.

He has been staying at his daughter's home in Lubbock, Tex.

She said the family wants to get Howe back to her house as soon as possible.

"It scares the daylight out of me," Purnell said, adding that she told him Monday night to "stop pulling these games on me.

He gave me a smile.

"His sense of humour is intact."

Monday, November 24, 2014 – Print Edition, Page B6

Report on Business has examined the boards of directors of 247 companies and income trusts in the S&P/TSX composite index as of Sept. 1 to assess the quality of their governance practices. Marks from the prior year have been included in the chart, but the scoring system has been adjusted, so earlier marks are not directly comparable.



TOTAL 2014 (100)

TOTAL 2013(100)

1 Sun Life Financial Inc. 97 98

2 Bank of Montreal 96 90

2 Bank of Nova Scotia 96 95

2 Emera Inc. 96 91

2 Royal Bank of Canada 96 94

6 Manulife Financial Corp. 95 92

6 Potash Corp. of Sask. Inc. 95 96

8 Cameco Corp. 94 88

8 Finning Int'l Inc. 94 90

8 TransAlta Corp. 94 94

8 Intact Financial Corp. 94 94

8 Manitoba Telecom Svcs Inc. 94 90

13 Canadian Imperial Bank of Commerce 93 89

13 Canadian REIT 93 88

13 National Bank of Canada 93 88

13 Toronto-Dominion Bank 93 94

17 Pembina Pipeline Corp. 92 86

17 Suncor Energy Inc. 92 95

19 Canadian National Railway Co. 91 88

19 Canadian Pacific Railway Ltd. 91 84

19 Chartwell Retirement Residences 91 90

19 Pengrowth Energy Corp. 91 89

19 TransCanada Corp. 91 93

19 Vermilion Energy Inc. 91 88

25 Boardwalk REIT 90 86

25 Canadian Oil Sands Ltd. 90 85

25 Gildan Activewear Inc. 90 91

25 Keyera Corp. 90 89

25 Precision Drilling Corp. 90 82

30 Agrium Inc. 89 84

30 Fortis Inc. 89 86

30 Industrial Alliance Insur. & Fin. Svcs. 89 90

30 Talisman Energy Inc. 89 81

30 Telus Corp. 89 85

30 Tim Hortons Inc. 89 79

36 Enbridge Inc. 88 86

36 Goldcorp Inc. 88 91

36 Riocan REIT 88 81

39 ARC Resources Ltd. 87 89

39 Canexus Corp. 87 83

39 Kinross Gold Corp. 87 87

39 Stantec Inc. 87 83

43 DH Corp. 86 88

43 Metro Inc. 86 85

43 TMX Group Ltd. 86 84

46 Barrick Gold Corp. 85 83

46 BCE Inc. 85 83

46 Methanex Corp. 85 84

46 Silver Wheaton Corp. 85 82

50 Capital Power Corp. 84 78

50 Toromont Industries Ltd. 84 82

52 Cenovus Energy Inc. 83 85

52 Franco-Nevada Corp. 83 86

52 Rona Inc. 83 89

52 Savanna Energy Svcs Corp. 83 77

52 SNC-Lavalin Group Inc. 83 84

57 Aimia Inc. 82 84

57 CAE Inc. 82 84

57 Home Capital Group Inc. 82 83

57 MacDonald Dettwiler & Assoc. Ltd. 82 81

57 Magna Int'l Inc. 82 86

62 Canadian Western Bank 81 81

62 New Gold Inc. 81 82

62 ShawCor Ltd. 81 79

62 Superior Plus Corp. 81 78

62 Wajax Corp. 81 81

67 Crescent Point Energy Corp. 80 76

67 First Capital Realty Inc. 80 82

69 Enerplus Corp. 79 71

69 Laurentian Bank of Canada 79 85

69 Maple Leaf Foods Inc. 79 82

69 North West Company Inc. 79 79

69 Northern Property REIT 79 59

69 WestJet Airlines Ltd. 79 74

75 Cogeco Cable Inc. 78 76

75 Encana Corp. 78 84

75 Progressive Waste Solutions Ltd. 78 77

75 Trican Well Service Ltd. 78 67

79 Celestica Inc. 77 79

79 Sherritt Int'l Corp. 77 77

81 CI Financial Corp. 76 72

81 Cineplex Inc. 76 75

81 Enerflex Ltd. 76 72

81 Interfor Corp. 76 na

81 Russel Metals Inc. 76 73

81 Thomson Reuters Corp. 76 76

87 Allied Properties REIT 75 74

87 Baytex Energy Corp. 75 73

87 Canadian Apartment Properties REIT 75 79

87 Descartes Systems Group Inc. 75 na

87 Ensign Energy Services Inc. 75 64

87 Gibson Energy Inc. 75 69

87 Secure Energy Services Inc. 75 66

87 Valeant Pharmaceuticals Int'l Inc. 75 73

87 West Fraser Timber Co. Ltd. 75 70

87 Yamana Gold Inc. 75 78

97 Innergex Renewable Energy Inc. 74 na

97 Linamar Corp. 74 73

97 Saputo Inc. 74 63

97 Veresen Inc. 74 80

97 Just Energy Group Inc. 74 68

102 Alamos Gold Inc. 73 70

102 AltaGas Ltd. 73 72

102 Crombie REIT 73 64

102 First Quantum Minerals Ltd. 73 68

102 Imperial Oil Ltd. 73 78

102 Penn West Petroleum Ltd. 73 70

108 Air Canada 72 na

108 Algonquin Power & Utilities Corp. 72 57

108 AuRico Gold Inc. 72 72

108 Inter Pipeline Ltd. 72 58

112 Bombardier Inc. 71 72

112 Chemtrade Logistics Income Fund 71 na

112 Ritchie Bros. Auctioneers Inc. 71 69

112 Silver Standard Resources Inc. 71 69

112 WSP Global Inc. 71 na

117 BlackBerry Ltd. 70 77

117 Brookfield Asset Management Inc. 70 75

117 Calfrac Well Services Ltd. 70 69

117 Dominion Diamond Corp. 70 74

117 Empire Company Ltd. 70 77

117 H&R REIT 70 75

117 Trinidad Drilling Ltd. 70 73

124 Artis REIT 69 38

124 Canadian Natural Resources Ltd. 69 71

124 HudBay Minerals Inc. 69 73

124 Newalta Corp. 69 na

124 OpenText Corp. 69 67

129 Cott Corp. 68 67

129 Eldorado Gold Corp. 68 66

129 Granite REIT 68 68

129 Horizon North Logistics Inc. 68 na

129 Jean Coutu Group Inc. 68 68

129 Parkland Fuel Corp. 68 69

129 Peyto Exploration & Devel. Corp. 68 71

129 Semafo Inc. 68 67

129 TransForce Inc. 68 68

138 Aecon Group Inc. 67 63

138 Bellatrix Exploration Ltd. 67 na

138 Detour Gold Corp. 67 61

138 Iamgold Corp. 67 74

142 Agnico-Eagle Mines Ltd. 66 70

142 Calloway REIT 66 70

142 CCL Industries Inc. 66 68

142 Element Financial Corp. 66 48

142 Enbridge Income Fund Holdings Inc. 66 62

142 Freehold Royalties Ltd. 66 59

142 Major Drilling Group Int'l Inc. 66 72

142 Tahoe Resources Inc. 66 64

142 Turquoise Hill Resources Ltd. 66 64

151 ATS Automation Tooling Sys. Inc. 65 na

151 AutoCanada Inc. 65 na

151 Catamaran Corp. 65 62

151 Dream Global REIT 65 54

151 Dream Office REIT 65 58

151 Extendicare Inc. 65 na

151 Genworth MI Canada Inc. 65 61

158 Alacer Gold Corp. 64 66

158 MEG Energy Corp. 64 65

158 Pan American Silver Corp. 64 57

158 Shaw Communications Inc. 64 57

162 Canadian Tire Corp. Ltd. 63 62

162 Canadian Utilities Ltd. 63 59

162 Canfor Corp. 63 57

162 Capstone Mining Corp. 63 51

162 Dream Unlimited Corp. 63 na

162 Pacific Rubiales Energy Corp. 63 56

162 Transcontinental Inc. 63 58

169 Hudson's Bay Co. 62 na

169 Husky Energy Inc. 62 62

169 Norbord Inc. 62 57

173 Paramount Resources Ltd. 62 57

173 Alaris Royalty Corp. 61 na

173 Badger Daylighting Inc. 61 na

173 Dollarama Inc. 61 63

173 George Weston Ltd. 61 59

173 Nevsun Resources Ltd. 61 52

178 Cominar REIT 60 64

178 Loblaw Cos. Ltd. 60 58

178 Rogers Communications Inc. 60 61

178 Northland Power Inc. 60 55

182 Alimentation Couche-Tard Inc. 59 56

182 Pason Systems Inc. 59 58

182 Quebecor Inc. 59 74

185 Centerra Gold Inc. 58 62

185 FirstService Corp. 58 58

185 Intertape Polymer Group Inc. 58 na

185 Power Financial Corp. 58 53

185 Westport Innovations Inc. 58 56

185 Martinrea International Inc. 58 53

191 Argonaut Gold Inc. 57 60

191 Mullen Group Ltd. 57 55

193 Constellation Software Inc. 56 52

193 Crew Energy Inc. 56 54

193 Lundin Mining Corp. 56 52

193 Teck Resources Ltd. 56 56

197 Advantage Oil and Gas Ltd. 55 48

197 Atco Ltd. 55 54

197 Canaccord Genuity Group Inc. 55 na

197 Corus Entertainment Inc. 55 60

197 Fairfax Financial Holdings Ltd. 55 54

197 IGM Financial Inc. 55 53

197 Lightstream Resources Ltd. 55 57

197 TransGlobe Energy Corp. 55 50

205 AGF Management Ltd. 54 57

205 First Majestic Silver Corp. 54 56

207 BlackPearl Resources Inc. 53 53

207 Bonavista Energy Corp. 53 63

207 Labrador Iron Ore Royalty Corp. 53 50

207 NovaGold Resources Inc. 53 54

207 Whitecap Resources Inc. 53 43

212 Athabasca Oil Corp. 52 42

212 Legacy Oil + Gas Inc. 52 57

212 Onex Corp. 52 57

212 Torex Gold Resources Inc. 52 51

216 Bankers Petroleum Ltd. 51 45

216 Dorel Industries Inc. 51 50

216 Kelt Exploration Ltd. 51 na

216 TORC Oil & Gas Ltd. 51 na

220 Parex Resources Inc. 49 na

221 B2Gold Corp. 48 49

221 Canyon Services Group Inc. 48 na

221 China Gold Int'l Resources Corp. 48 44

221 NuVista Energy Ltd. 48 na

221 Painted Pony Petroleum Ltd. 48 na

221 Pretium Resources Inc. 48 55

221 Primero Mining Corp. 48 na

221 Great-West Lifeco Inc. 48 42

229 Black Diamond Group Ltd. 47 49

229 Canadian Energy Svcs & Tech. Corp. 47 na

231 Dundee Corp. 46 44

231 Gran Tierra Energy Inc. 46 na

231 Surge Energy Inc. 46 na

234 CGI Group Inc. 45 39

234 Ithaca Energy Inc. 45 na

234 Trilogy Energy Corp. 45 42

237 Power Corp. of Canada 44 45

238 BRP Inc. 43 na

239 Birchcliff Energy Ltd. 42 42

239 RMP Energy Inc. 42 na

239 Tourmaline Oil Corp. 42 44

239 Westshore Terminals Invest. Corp. 42 40

243 OceanaGold Corp. 41 41

244 Avigilon Corp. 40 na

245 Bonterra Energy Corp. 39 40

245 Raging River Exploration Inc. 39 na

247 Fortuna Silver Mines Inc. 35 32

Source: Marking data prepared by the Clarkson Centre for Business Ethics and Board Effectiveness at the University of Toronto

n/a = not applicable because the company was not marked in 2013

Wednesday, December 17, 2014


A Nov. 24 Report on Business feature on corporate governance, called Board Games, included an incorrect ranking for Calloway REIT, showing a total score of 66 out 100. In fact, Calloway received a mark of 70 out of 100, tying for 117th place in the ranking.

Friday, December 5, 2014 – Print Edition, Page B2

The roaming charges from hell

For the most part, airline passengers have gotten used to paying extra for things that used to be free. So Canadian innovation expert Jeremy Gutsche, founder of and "one of the most sought-after keynote speakers on the planet," according to Britain's Sun newspaper, was happy to fork out $28.99 for a 30megabyte Internet access plan during a Singapore Airlines flight last month, The Economist reports.

He wasn't so happy, however, when he took a look at the bill that popped up on his phone screen after disembarking: $28.99, plus an additional $1,142,47 for overage charges.

In a blog post, he insists the "painfully slow" Internet speed made it impossible to view video, and that he had made "just 155 page views, mostly to my e-mail."

He did concede that he slept through most of the flight, without disconnecting.

The charges-per-megabyte, Mr. Gutsche acknowledges, were disclosed at the outset.

A spokeswoman for OnAir, the WiFi provider, said that checking e-mail could not have been responsible for the heavy data use. "To consume several hundred megabytes during one flight takes much more than basic e-mail viewing, for example downloading heavy attachments, cloud access and using Skype."

This little piggy flew an airplane

Airports have always been a bit of a zoo, now the planes themselves are becoming that way, too. Had you been on a US Airways flight last week and not had your face glued to a potentially bankrupting computer screen, you would have seen something you probably never have or are ever likely to: a passenger boarding with a pig. (Insert obvious when-pigs-fly joke here.)

The porker, named Hobie, estimated to weigh between 50 and 70 pounds, was serving as "an emotional support animal," a designation recognized by the U.S. Department of Transportation that carriers are required to comply with.

The directive is clear to note that, of course, "animals such as miniature horses, pigs and monkeys should be evaluated on a case-by-case basis."

The only grounds a carrier has to refuse are if a particular animal should pose a direct threat to the health and safety of other passengers, or prove disruptive.

And that Hobie was, running up and down the aisle like a naughty child who had forgot to use the bathroom before boarding.

This isn't the first time US Airways has encountered the problem. Back in 2000, a pig - who showed no respect for his betters - ran amok, as The Telegraph reported.

"Many people were quite upset that there was a large uncontrollable pig on board, especially those in the first-class cabin," spokesman David Castleveter said of that incident.

Greenback checks Canadian hockey

The loonie's loss of altitude is biting into overall NHL revenue and hitting Canadian teams particularly hard. Since the $5.2-billion deal for broadcasting rights was signed with Rogers last year, the loonie has lost 7 per cent of its value.

That means less U.S.-dollar revenue for all teams, as Forbes explains, but is a further hardship for the seven Canadian clubs which also have to pay their players in greenbacks.

And because a third of revenue in the 30-team league is estimated to be generated by its Canadian contingent, the trend could see owners agitate for a recalculation of revenue sharing and, for fans, higher ticket prices.

She shopped till she dropped

Kudos to hairdresser and waitress Louise Haggerty, of northeast London, for best summing up the spirit of Black Friday in comments to the Guardian about the frenzied atmosphere at a local store: "I got a Dyson but I don't even know if I want it. I just picked it up."

I just get it for the theatre tickets

Spanish pornography magazines have just become sort of highbrow. Madrid theatre company Primas de Riesgo - or Risk Premium - has extended its onstage creativity into its marketing to address a problem that arose when the government's austerity drive cut subsidies for the arts and boosted the tax on tickets for plays and movies from 8 per cent to 21 per cent, the Guardian reports.

Realizing that the sales tax on magazines remained at 4 per cent, the company found a way to keep ticket costs down while at the same time making a point.

"It's scandalous when cultural heritage is being taxed at 21 per cent and porn at only at 4 per cent. Something is wrong," director Karina Garantiva said.

For the past month, Primas de Riesgo has been selling back copies of Gente Libre acquired from a collector for 16 ($22.55) apiece.

And the magazine come with a free ticket to the troupe's upcoming production of El Magico Prodigioso (The Prodigious Magician), by revered 17th-century dramatist Pedro Calderon.

And according to Spanish new website The Olive Press, a Catalan theatre company is taking the same tack by selling carrots for 13, with a free ticket thrown in.

Zippy Bags rolls the dice on new venture

It's been an impressive growth trajectory. According to Nasdaq filings, Zippy Bags Inc. of Salt Lake City, marketer of a snowboard carrying bag, launched its IPO in 2011 with a staff of one. The company, listed on Nasdaq's OTC exchange, this week announced a name change to Glorywin Entertainment Group Inc. and what appears to be a tweak to its business strategy.

The company now says it's "a leading-edge online casino expert focused on providing junket services, IT infrastructure and software programming for the online operations of three land-based casinos in Cambodia," according to its press release. In August of this year, the Glorywin upped sticks and is now based in Macau, SEC filings show, although its website describes it as a Nevada company.

Old warrior fights to save U.K. health care
Saturday, December 6, 2014 – Print Edition, Page B2

In Danny Boyle's wonderfully creative and fanciful London 2012 Olympics opening ceremony, one scene baffled millions of foreign viewers. In it, the stadium floor turned into a sea of dancing and skipping nurses. At one point, they jumped up and down on massive hospital beds. They were real nurses from the National Health Service - the NHS - the beloved and bemoaned institution that is as quintessentially British as the Queen, the Beatles and black cabs.

Mr. Boyle, the show's director, was making a political statement as much as entertaining the masses - the NHS, for all its faults, was to be celebrated. Before the show, he told reporters that "everyone is aware of how important the NHS is to everybody in this country. One of the core values of our society is that it doesn't matter who you are, you will get treated the same in terms of health care."

I don't know if Harry Leslie Smith was in the audience, but he would have jumped as high as the nurses a quarter his age if he had been. Mr. Smith is 91 and a tireless supporter of the social safety net that, after the back-to-back miseries of the Depression and the Second World War, created the NHS. Most other Western countries, Canada among them and the United States notably not, banged together their own versions. To varying degrees, each of them is threatened by budget cuts and the vagaries of political ideology. But, like Mr. Smith, they, old and frail, keep soldiering on. But for how much longer?

Mr. Smith and I have had an e-mail and Twitter relationship for many months, although I have not met him. He grew up in a bleak, clapped-out town in Northern England, is a Second World War RAF veteran, immigrated to Canada and now divides his time between Belleville, Ont., and a farm in Yorkshire, England.

His pleas to keep the heart of the NHS alive and pumping have made him something of a hero in Britain. He might be Europe's oldest rebel and more than a few of us wonder why a man his age has reinvented himself as a crusader for the welfare state and social democracy. Shouldn't that role go to the young men and women who would suffer the most if the NHS were to endure death by a thousand cuts? Mr. Smith is, after all, close to checking out of the game, even though he appears in good health.

Mr. Smith's book, Harry's Last Stand, published this year, is a furious poem dedicated to the preservation of the welfare state, especially the NHS, and to attacks on those who would happily see it dismantled. He speech in September at the Labour Party conference in Manchester stole the show and made him a minor YouTube sensation. He earned two standing ovations and brought many delegates to tears.

"I came into this world in the rough and ready year of 1923," he said. "I'm from Barnsley, and I can tell you that my childhood, like so many others from that era, was not like an episode from Downton Abbey. Instead, it was a barbarous time, it was a bleak time and it was an uncivilized time, because public health care didn't exist."

The stories of grief and pain in Depression-era Britain carry the book, which meanders between biography and rage against the system. The biography parts are the most compelling, for they remind the reader of the era when the absence of public health care could mean a miserable, short existence unless you had the money for private care. Few did.

Mr. Smith's book is timely. Britain's Labour Party has pinned its election fortunes on rescuing the ailing NHS with an extra £2.5-billion ($4.4-billion) a year. In response, David Cameron, the Conservative Prime Minister, has promised to "protect" the NHS and, indeed, health-care budgets have not been crunched since the Conservatives election victory. Still, the NHS is under a severe financial squeeze as demand for its services outstrips supply. Recently, NHS boss Simon Stevens said the "factory model of health and social care" cannot meet the soaring rates of obesity, diabetes, dementia and chronic disease.

Earlier this week, George Osborne, Chancellor of the Exchequer, unveiled a tough vision of Britain's fiscal future as budget deficits remain stubbornly intact and Britain's debt swells. There will be more austerity, probably much more, meaning that government services face a massive retreat. At the same time, all the parties are pledging that the NHS will remain more or less intact.

The promises are not credible and, already, almost everyone who can afford private health care in Britain takes it. The NHS's existential problems are not unique. Every country with a national health service in ailing Europe is asking how its healthcare systems can remain affordable and useful.

Some public health-care systems will be forced into retreat; that's happening already. Others may not make it. But before the decisions are made to cut them down to virtual nothingness, the warnings of Harry Leslie Smith should be read. Life before the NHS was shockingly brutal. "I am not an historian, but at 91, I am history, and I fear its repetition," says Europe's toughest, oldest and most spirited warrior.

Poloz faced with tricky balancing act for real estate
Thursday, December 11, 2014 – Print Edition, Page B2

Stephen Poloz might have himself a housing bubble after all. How well he deals with it may well define his tenure as Canada's central bank governor.

The Bank of Canada dropped a bombshell Wednesday in its twice-annual Financial System Review (FSR), saying that its new model for assessing housing valuations estimates that Canadian house prices are between 10 to 30 per cent overvalued.

Now granted, that's a big range, but it's the strongest statement yet from the central bank of just how overstretched Canada's housing sector might be.

At the 30-per-cent top of the range - about the biggest estimate we've seen anywhere - this would constitute a serious housing bubble. (Consider that when last decade's massive U.S. bubble burst, the ultimate damage was a 35-per-cent decline before it found solid footing again.) Even if you took the midpoint, 20 per cent, that's a huge overhang.

And as the Bank of Canada noted, the estimated overvaluation range is in line with what the same model shows for the early 1980s and early 1990s - both of which were followed by housing corrections in the 10per-cent range and, notably, recessions.

Economists at Canada's big banks were quick to play down the overvaluation estimate, noting that the Bank of Canada itself characterized the risk of a big housing correction as "low" and is still confident about a soft landing for the sector. But consider this: The central bank dedicated a special information box to the issue in the FSR. It issued a separate report on housing-market valuations in conjunction with the FSR. And Mr. Poloz specifically addressed the overvaluation estimate in his opening statement for the press conference that followed the FSR's release. The central bank isn't in the habit of talking about things, at length, that it doesn't consider important. It doesn't start new conversations unless it wants to put an issue on the public radar screen. This matters.

Indeed, it may be the one big economic hurdle Mr. Poloz still has to overcome if he is going to successfully steer Canada's economy back to something resembling normal - a state we haven't seen since before the 2008 financial crisis and recession. The overshoot of the housing market, and the related bloating of household debt, represent the albatross Canada still bears from its efforts to defend its economy from disaster in the depths of the global economic and financial crisis. The federal budget deficit has been eliminated, economic growth and exports and even jobs are coming back. But we needed ultralow interest rates to breathe life into the economy - and the price is a hyperventilated housing market.

The problem is what happens when we start to shut off the ventilator. The Bank of Canada is probably only six months away from having to start seriously contemplating its first interest-rate increases since 2010, as the growing economy absorbs its excess capacity. In those 1980s and 1990s corrections, it was the arrival of rising interest rates that toppled the housing market from its lofty perch.

One thing the central bank is, well, banking on is that the current housing overshoot has come in the absence on an inflation problem. In both the early 1980s and the early 1990s, policy makers needed to jack up interest rates pretty quickly to fight a surge in inflation - to which a spike in housing prices was a significant contributor. By contrast, the bank has been adamant that inflation is no threat today, and housing prices haven't experienced a recent surge.

Still, the possible extent of the housing overshoot leaves Mr. Poloz with a pivotal policy dilemma. On the one hand, the longer the central bank keeps its policy rates low, the more gasoline it pours on an already roaring housing market.

On the other hand, the housing boom may have reached such proportions that pulling the interest-rate rug out from under it could destabilize it, and the economic consequences could be severe. Meanwhile, the economy creeps closer to the point where rate hikes would normally be prudent and warranted; wait too long and you have a whole new set of problems on your hands.

In trying to assess what route Mr. Poloz will take, probably the most important thing to remember is this: He has made it abundantly clear that he cares more about downside risks than upside, as they pose the bigger danger to Canada's economic well-being.

The biggest risk to the housing overshoot would appear to be raising rates too high, too soon, and toppling the whole apple cart. The central bank's new housing analysis adds to the list of reasons the bank will err on the side of starting rate increases later, and raising them slower than might normally be warranted.

It will almost certainly be the most important call of Mr. Poloz's tenure. History will one day tell us if he got it right.

Associated Graphic

Wednesday's Financial System Review shows that Bank of Canada Governor Stephen Poloz is worried about high housing prices, but if Mr. Poloz raises interest rates too high, too soon, he may cause a crash.


Speculators play smaller role in latest oil price drop
Wednesday, December 3, 2014 – Print Edition, Page B2


There's plenty of blame or praise to go around for oil's dramatic slide, depending on which side of the trade one sits.

OPEC is sending the message that it won't let its market share go easily. Sweat is forming on the brows of oil executives and politicians who rely on energy revenues. Motorists and folks that run energy-intensive manufacturing businesses are cheering.

If there's one group that will probably escape both anger and gratitude this time around, it's the commodity-market speculators.

In 2007 and 2008, financial institutions that jumped into the market were often accused of being primary culprits in oil's push to near $150 (U.S.) a barrel.

Crude is now less than half that price and their influence has waned. Some argue they didn't have much in the first place.

Oil's fall neared maximum velocity last week, when the Organization of the Petroleum Exporting Countries served notice it wouldn't take on the full burden of protecting prices with production cuts when competitors - notably U.S. shale producers - embarked on a drilling frenzy.

Market participants, including speculators, have been signalling the fall for months, based on their futures trades. Since June, net short positions among "noncommercial" traders, or hedge funds - essentially bets that the market would go lower - nearly doubled before tailing off the week before OPEC met, according to data from the U.S. Commodity Futures Trading Commission.

Net long positions among the hedge funds, or wagers that there's money to be made on an increase in oil prices, have dwindled through the period.

The CFTC releases the data late on Friday. It is likely that this week's numbers, which encompass the aftermath of the OPEC decision to stand pat on production, will show the trend has accelerated.

There's still debate about how much influence speculators had on oil prices during the previous spike, but it is clear that much has changed since then. Major banks, including Morgan Stanley, JPMorgan Chase & Co. and Barclays PLC have jettisoned commodities units. Others have cut back on business. By some estimates, commodity trading revenue from the 10 largest banks has fallen by two-thirds since the credit crunch.

The market opportunity has also moved on, says Phil Flynn, futures account executive with Price Futures Group in Chicago. In the lead-up to the financial crisis, the U.S. Federal Reserve had embarked on a low interest-rate policy despite hikes in other economies. It sent speculators and hedge funds into commodities.

Meanwhile, the pre-shale-revolution oil market indicated nothing but tightening crude supplies around the world - even the potential for peak oil - and predictably high annual demand in China.

"The thought process was that the U.S. was the late, great United States and to make any return you had to buy Greek bonds or commodities," Mr. Flynn said. "It was really that divergence of interest rates that caused a massive flow in funds that eventually turned out to be a big bubble."

He points out that there was no shortage of speculators in late 2008, when oil tumbled to around $30 a barrel from $147, pulled down by skidding economies around the globe and the lock-up of credit.

Now, the market is reacting to standard-issue fundamentals - as many as two million too many barrels a day on the world market to be absorbed by economies whose growth is tailing off, especially China.

The biggest indication of the shift is the market's non-reaction to geopolitical tension in the past half year, such as armed conflict in northern Iraq, Syria, Libya and Ukraine, any one of which would have triggered price spikes in past years.

Regardless of who is trading the futures, the oil market could be set for a long-term period in the $70-a-barrel range, said Leo de Bever, the outgoing CEO of Alberta Investment Management Corp.

and a one-time commodity-market speculator.

Mr. de Bever said institutional investors likely do not have an "overwhelming" role in the volatility of the market, especially now that the long-term curve, the series of prices beyond the closest month, is relatively flat.

"What's more important is, you've got a cartel, in OPEC, that for a while, was able to control the price because it was such a dominant part of the market. Now it's a funny situation - OPEC is accusing the United States of oversupplying the market. It's sort of the pot and the kettle, I guess," Mr. de Bever says.

Associated Graphic

Unlike in 2008, when oil plummeted because of a credit lock-up, the current decline is in reaction to standard-issue fundamentals.


Friday, December 12, 2014 – Print Edition, Page B2

Short sellers play chicken

Short sellers have found a new asset to bet the farm against: chickens.

While cattle and hogs offer trades on the futures market, there's no direct chicken play for speculators, so they're turning to the equity market to borrow record amounts of shares of two U.S. poultry producers that they then sell in anticipation of declines.

The percentage of outstanding shares of Pilgrim's Pride Corp. that have been sold short by investors has soared more than six-fold since Sept. 30, while the ratio for Sanderson Farms Inc. has almost doubled, Bloomberg reported last week.

The success, or failure, of the trade depends on whether the eight-month surge in chicken prices is over or not. Poultry prices have been fuelled by big increases in beef prices, which have spurred consumers to look for cheaper meats.

So if you're a bear on chicken, there's a trade for you.

T. Boone Pickens tells it like it is

"To me, Russia is a poor country.

They have a couple of assets, and that is it. I put oil and gas as one asset; the other asset is vodka.

They don't export that, they drink it."

T. Boone Pickens

Oil man, discussing the country's sensitivity to falling oil prices with Mad Money's Jim Cramer

It was advertised as 'slightly used'

Bricks-and-mortar merchants in India may have found a friend in dishonest e-commerce middlemen.

Mumbai retiree Laxminarayan Krishnamurthy last month opened a package from e-tailer, expecting to find the Samsung Galaxy smartphone he ordered for this wife.

Instead, like Charlie Brown, all he got was a rock. Or, more precisely, a brick, and two bars of soap to boot.

"The worst customer service ever received!!!" the former bank employee ranted on his Facebook page. Online sales in India are surging but an underdeveloped logistics infrastructure means lost, stolen and delayed deliveries are commonplace and undermine consumer confidence.

"I have stopped shopping online," Mr. Krishnamurthy, who used to work at state-owned lender Central Bank of India, told Bloomberg Businessweek. "E-commerce in India has a lot to learn."

The story ended happily for Mr. Krishnamurthy, though. He did eventually get a refund from the shipper, but not before Unilever India, which recognized its own brand of soap in the Facebook picture, sent him the phone he had ordered - plus a few bottles of its Vim liquid soap.

Utility workers get a day to call their own

You may not have noticed unless you have an American calendar to give you a heads-up when occasions such as Veterans Day and Memorial Day roll around, but last Friday friends and families in New Jersey got a new event to observe.

More than two years after Hurricane Sandy devastated the coast of New Jersey causing severe damage and a power outage affecting 10 million households, Governor Chris Christie, wrapping up a trip to Canada last week, proclaimed Dec. 5 to be Canadian Utility Workers Appreciation Day.

The proclamation notes that more than 800 employees from a dozen different power companies worked 12-to-16-hour days under harsh conditions to help restore power in New Jersey.

The Canadian industry reportedly sent more workers to the state to pitch in, but they were unable to enter as all the bridges were closed for unscheduled maintenance.

Let it go ... all the way to the bank

The superlatives keep mounting for Frozen, the Disney gigablockbuster that crept quietly into theatres last year and then relentlessly snowballed into a marketing phenomenon.

First off, it's the biggest-grossing animated feature of all time, chalking up more than $1.2-billion (U.S.) of box-office receipts to date, and still counting, also making it the fifth highest-earning movie ever.

Even before Christmas sales, more than 9.2 million DVDs have been shifted (The Hunger Games is No. 2 at three million units), and it's been the top-selling movie on iTunes and the best-selling CD of 2014.

Oh, and one more thing: For the first time since the U.S. National Retail Federation began its survey of top toys for the holiday season 11 years ago, Frozen merchandise has knocked the iconic Barbie off the top perch, according to Fortune. The magazine earlier predicted sales could reach as high as $1-billion in the U.S. alone.

Tax, transfer system needs rethink amid growing disparity, study finds
Monday, November 24, 2014 – Print Edition, Page B3

Canadian policy makers will have to consciously "lean against" income inequality to avert following the United States down the path of widening disparities, a bank study to be released Monday says.

"If Canada doesn't want to have higher income inequality in the future, governments will have to lean against the trend towards that outcome," said Craig Alexander, chief economist of TorontoDominion Bank and co-author of the paper with Francis Fong.

Canada has long been a more equitable country than its neighbour to the south, a place where it's also easier to pursue the American dream of climbing from rags to riches. But the paper argues that fault lines are starting to emerge, driven in part by increased globalization and technology.

Though Canada's track record is better than that of the United States, Canada has seen a "significant rise in inequality over the past several decades," the report says. Moreover, "a number of trends suggest that income inequality may rise materially higher, and social mobility could decline, in the years ahead."

Several forces give the economists cause for concern. In a relatively small, trade-oriented economy, Canada is influenced by globalization, technological change and a global war for talent. Many middle-income, middle-skill jobs have already been outsourced or replaced with technology.

A commodity and housing boom has insulated Canada from hollowing-out the middle class in recent years. But they note these booms "do not last forever."

They cite recent OECD research that shows a 1-per-cent increase in inequality lowers GDP growth by between 0.6 per cent and 1.1 per cent.

Rising income inequality erodes social mobility, which is "corrosive for economic growth and prosperity," Mr. Alexander said in an interview.

He often visits the southern United States as part of his work, towns where poverty and a lack of opportunity are starkly visible in the decrepit housing and paucity of jobs. He does not want to see Canada go down that road.

The paper comes after new data show the top 1 per cent of earners in Canada saw a 2012 decline in their share of total income, unlike in the U.S.. Still, Canadian levels of income concentration at the top remain at some of their highest levels in the past 35 years, and top earners have seen the fastest growth in incomes in that time.

The big shift in income inequality in Canada happened in the 1990s, when governments cut transfers. Through the 2000s, the income gap has been "relatively flat," though higher than in previous decades. Minimum-wage hikes have supported lower-income earners, while middle-income earners have seen the slowest growth.

Canadians may take pride in their country's more equitable outcomes, but "Canada does less income redistribution than many think," the report said, noting that Canada's ranking on income equality tumbles to 19th place in the OECD's measure of after-tax and transfer income, from 9th place on the basis of market income (or compensation).

The economists stop short of calling for tax hikes for the rich (they do note it's "one way" to redistribute income). But they say there are "opportunities" to make Canada's tax and transfer system more progressive and redistributive, and that a review of the country's tax system is warranted. They advocate more means testing (tests to determine whether people qualify for government assistance) for public programs.

Boutique tax credits and tax shelters such as TFSAs are examples of unintended consequences, Mr. Alexander said - programs started with good intentions, but which in recent years have disproportionately benefited the welloffs, who are more likely to take advantage of these vehicles.

The authors recommend more measures to bolster labour market outcomes, by improving recognition of foreign workers' credentials, investing in education among Aboriginal students and ensuring low-income youth still have access to ever-pricier professional programs like law, medicine and graduate business schools.


Associated Graphic


Little to celebrate on UN's International Anti-Corruption Day
Wednesday, December 10, 2014 – Print Edition, Page B2

Brazil's chief corruption watchdog abruptly resigned on the eve of the UN's International Anti-Corruption Day Tuesday.

It's no coincidence that comptroller-general Jorge Hage Sobrinho, 76, the veteran official responsible for rooting out public corruption in the country, chose this time to pack it in. A person half his age would have pleaded overwork and exhaustion long ago from coping with a wave of scandals involving money-laundering, bribery and huge kickbacks that have allegedly reached the senior ranks of government and political organizations.

Unfortunately, Brazil's long and impressive record of malfeasance is no anomaly in a world where corrupt practices are too often the norm, rather than the exception.

Last week, the Organization for Economic Co-operation and Development issued a damning report on bribery that shows just how wide and deep the tentacles of corruption extend around the world - across developed and emerging markets alike.

It should come as no surprise that the bulk of illicit payments are being funnelled through agents or corporate vehicles set up for the purpose, in exchange for public procurement deals. But after reviewing data from 427 foreign bribery cases over the past 15 years, OECD analysts have reached other conclusions that ought to set off alarm bells among some members. That includes the U.S. and Canadian governments, which have made much of their determination to stamp out foreign bribery by domestic corporations.

"Corporate leadership is involved, or at least aware, of the practice of foreign bribery in most cases," the report says. This debunks the notion, warmly embraced by embattled senior executives everywhere, that overzealous "rogue employees" are responsible for sullying their companies' sterling reputations.

The OECD reckons that bribes averaged nearly 11 per cent of the total value of the contracts involved, and almost 35 per cent of the profits. The average size of the payouts was close to $14-million (U.S.). So there is a steep economic cost.

That's something Brazilians are all too well aware of after years of scandalous dealings that siphoned huge sums from public coffers and ratcheted up the cost of badly needed infrastructure. A 2010 study pegged the cost of corruption at between 1.4 and 2.3 per cent of GDP. And if the latest examples are anything to go by, that could be a tad on the low side.

The most notorious case - labelled Operation Car Wash in the local media - focuses on illicit dealings among a handful of former officials at state oil giant Petrobras, influential construction executives and various political players and organizations.

Fat bribes were allegedly paid in return for lucrative contracts for Petrobras-related projects. Part of the haul flowed into President Dilma Rousseff's Workers' Party and its congressional allies, according to a former Petrobras director who alleges that dozens of politicians were in on the action.

For now, Brazilian prosecutors are set to indict 11 executives from half a dozen construction and engineering outfits over bribes running into the billions. But the judge in the case wants investigators to examine other major infrastructure projects for similar transgressions.

They are bound to find plenty of dirt under the proverbial rug. Corruption still seems to be the preferred operating method in a large swath of the world. And harsher penalties will only help if investigators and prosecutors have enough resources to pursue complex international cases that can take more than seven years to reach a courtroom.

Mr. Hage made that point Tuesday, observing that the government has cut his budget, making it difficult to cover his office's basic utility bills.

"Historically, the comptroller already had a small budget," he told reporters in Brasilia. "We represent a tiny part of the federal budget, especially compared with what we avoid in terms of waste and misappropriations."

It's good that he's not going away quite as quietly as the government undoubtedly would have preferred.

BlackBerry's Chen faces a Classic dilemma
Tuesday, December 16, 2014 – Print Edition, Page B2

OTTAWA -- John Chen has done a decent job resetting the narrative in his 13 months as chief executive of BlackBerry Ltd.

The company has cut costs and refocused on its core customers. It has struck a deal that protects its downside risk in the smartphone business but has still managed to launch one distinctive device (the Passport) and will unveil another, the Classic, aimed at diehard BlackBerry users, this Wednesday.

It is focusing more on selling software and services by helping governments and businesses manage their fleets of smartphones. Time to roll out the "Mission Accomplished" banner? Hardly.

First, BlackBerry faces intense competition not only in devices (Mr. Chen's goal of selling 10 million smartphones in a market that has largely forgotten BlackBerry might be a challenge), but also in serving the device-management needs of enterprises, where big players such as Citrix, IBM and Google have moved in.

The business is not BlackBerry's to take as it once was; the company has to win it back after taking too long to enable its customers to manage all their devices using its server software.

Mr. Chen also plans to derive $100-million in revenue in the fiscal year starting March, 2015, from his BlackBerry Messenger (BBM) instant messaging service. That's a stretch for a company whose service is a distant second-tier player against Facebook's WhatsApp in a business where revenues are small and spotty.

But there's something else among BlackBerry's moving parts that's even more distressing: Even if Mr. Chen can hit his two big goals for next year - doubling software revenues to $500-million, and bringing in $100-million from BBM - that $350-million revenue bump would still come nowhere close to offsetting a big revenue stream in steady decline: the service access fees BlackBerry charges users of its smartphones.

Those fees have been dropping steadily due to the declining subscriber base and because previous CEO Thorsten Heins bowed to long-standing carrier pressure and stopped charging fees for the new BlackBerry 10 model phones it launched last year.

This fee stream, which once topped $1-billion a quarter, is dropping at a rate of 10 per cent to 15 per cent a quarter. But it still accounts for a big portion of revenues, amounting to $424million in the previous quarter, almost half the overall total. The company has warned that will drop from about $1.6-billion this year to the mid-$800-million level next year, a decline of more than $700-million. Some analysts expect it will fall even further.

Mr. Chen's plan would generate only $350-million in new cash - hard-won revenues that would have to be earned in the marketplace, compared with easy money that continues to flow in - albeit at a declining rate - with extremely high margins. "That fee stream is the lifeline that has allowed them to go through their reorganization," said Citi analyst Ehud Gelblum.

And if the Classic is a smashing success, it could conceivably lead even more users of the company's older products - which are still yielding those big fees - to trade them in for newer phones, which don't, hastening the fee decline.

Mr. Chen has enough challenges to deal with; it would be unfortunate if the Classic launch is so successful that it creates another one for him.

Associated Graphic

BlackBerry chief executive John Chen has cut costs and renewed the company's focus on enterprise clients to bolster flagging revenue. The company's device subscriber fees have steadily declined and the launch of the new "Classic" phone on Wednesday could accelerate that decline.


An 'open letter' to Jack Mintz: A regulator's rare rebuke
Tuesday, December 9, 2014 – Print Edition, Page B1

Ontario's top securities watchdog is calling out policy pundit Jack Mintz in a rare public rebuke.

Despite being known as a regulator that rarely ruffles feathers, the Ontario Securities Commission is set to publish an "open letter" to Mr. Mintz on Tuesday, penned by vice-chair James Turner, a former senior partner at Torys LLP. The letter criticizes Mr. Mintz's recent remarks about provincial securities regulators' attempts to revamp the way Canadian companies raise money in private markets.

In November, Mr. Mintz, who runs the University of Calgary's School of Public Policy, released a paper that took aim at a proposal to add an extra class of investors who can buy private securities.

Currently, only "accredited investors," or those with $1-million in net financial assets or net income above $200,000, can invest in securities sold solely in private markets. These "exempt securities" do not trade on public exchanges and their companies' financial disclosures are often limited or do not exist.

To make it acceptable for more Canadians to invest in private securities, the OSC proposed adding a new class of investors who have a net income of at least $75,000 or have $250,000 in net assets, excluding their primary residence.

If the new rules are accepted, these individuals will be able to buy up to $30,000 worth of private securities a year.

Mr. Mintz argued there is no proof that any restrictions on these investors is necessary, largely because his research found no proof of rampant fraud or other major concerns prevalent in private markets. "The first question we should be asking is: what is the problem?" he said during a panel discussion in November on the report.

"I think we should wait a year before we put in regulations that could do a lot of harm," he said. "Let's slow down. The world won't fall apart."

The OSC said it was shocked to hear his criticisms. "We are very substantially opening up the exempt market, particularly for junior issuers, to raise capital," Mr. Turner said in an interview.

Yet Mr. Mintz made it seem as if the regulators were doing the opposite by denigrating the proposal.

"We think it's very important for our market to open up and liberalize," Mr. Turner added.

The OSC was also surprised by the call to slow down, considering regulators are often criticized for being too slow to act. In this case, more review would make it harder for Canadians to invest in private securities. "Delaying means not making any of these new exemptions available," Mr. Turner said.

A spokesperson for Mr. Mintz declined to comment on the letter, which was sent to him Monday.

Within the text, the OSC defends the proposals as being "measured, informed and incremental." The regulator also takes issue with Mr. Mintz's claims that the watchdogs are "shooting in the dark" considering "the extensive consultations that support our proposals."

Associated Graphic

Jack Mintz.


There's no supreme without darkness: Kobe
The Associated Press
Tuesday, December 16, 2014 – Print Edition, Page S4

MINNEAPOLIS -- All these years, Kobe Bryant has been chasing Michael Jordan.

The bar doesn't get any higher than that. And after Bryant passed Jordan for third on the NBA's career scoring list in the Los Angeles Lakers' 100-94 win over the Minnesota Timberwolves on Sunday night, he offered a glimpse into the relentless mentality it takes to run down a legend.

"I think the competitive nature is something that frightens a lot of people when you peel back truly what's inside of a person to compete and be at that high level," Bryant said. "It scares a lot of people that are just comfortable being average."

Bryant has been compared with Jordan for a long time, in part because he dared to chase him.

Where Bryant is every bit Jordan's equal is in the tenacity that has kept him going through a torn Achilles tendon, bone-onbone friction in his knees and now the painful rebuilding of a proud franchise.

"His competitiveness drives him in the off-season to work to be able to play at the level he plays," Timberwolves coach Flip Saunders said. "His competitiveness during the games to dominate offensively and defensively and then his competitiveness of wanting to win. He'll challenge teammates if need be and will do whatever it takes to try to get that edge."

It's the only way Bryant knows. And he learned by studying the best.

"I think when you look at Michael's [Hall of Fame] speech," Bryant said, referring to a speech in which Jordan cited those who he perceived to have gotten in his way over the years. "People really got a chance to see how he ticks and it scared a lot of people, right? But that's just the reality of it. You can't get to a supreme level without channelling the dark side a little bit."

Bryant's willingness to embrace the darkness has, in his own eyes, cast him as one of the league's villains. It also likely ensures that his farewell tour, whenever that comes, will not be of the warm and fuzzy variety that New York Yankees star Derek Jeter enjoyed last season.

"Derek and I are different people," Bryant said. "He hides it a lot better, but I guarantee you our competitive spirit is exactly the same. He just hides it better or chooses to hide it. I don't choose to hide it."

Then again, maybe he overestimates the animosity out there.

Maybe that's another mind trick that he plays on himself to get him out of bed in the morning and to the gym for another workout.

When No. 24 stepped to the free-throw line midway through the second quarter on Sunday night - with 5 minutes 24 seconds remaining and 24 seconds on the shot clock, to be exact - needing both shots to move past Jordan, a Lakers-heavy crowd at Target Center stood and serenaded him. Cellphone flashes flickered as the first and second shots swished through and the Timberwolves stopped the game, with owner Glen Taylor presenting Bryant the game ball to a thunderous ovation.

"I'm used to being the villain, man," Bryant said with a sheepish smile. "To have moments like that, when you're not expecting a hug and you get a hug, this feels pretty damn good."

Once it was finally over, the weight lifted and Bryant found another gear against a young Timberwolves team that includes 19-year-olds Andrew Wiggins - the No. 1 overall pick in the June draft - and Zach LaVine, who wears No. 8 in honour of Bryant.

He finished the night with 26 points, including a dagger of a three-pointer over Wiggins's outstretched hand with just more than a minute to play that helped seal the win.

"I witnessed greatness tonight," a star-struck Wiggins said. "A living legend passed Michael Jordan, who everyone thinks is the best player of all time. That's a big accomplishment. I'm glad I was there to witness it."

Wiggins was one when a wideeyed Bryant entered the league in 1996, and that wasn't lost on him in the afterglow on Sunday night.

"It was a strange feeling," Bryant said. "I remember being Andrew Wiggins. I remember playing against Michael my first year. To be here tonight and playing against him and seeing the baby face and the little footwork and little technique - things that he's going to be much, much sharper at as time goes on. It was like looking at a reflection of myself 19 years ago. It was pretty cool."

Now that Bryant has bumped Jordan from the scoring podium, only Kareem Abdul-Jabbar (38,387) and Karl Malone (36,928) are in front of him.

Even if he remains in third place, which appears likely, it won't really matter. Vaulting over Jordan, whose Jumpman logo is as synonymous with the NBA as Jerry West's silhouette, is its own reward.

Maybe that's why the insatiable Bryant wore the unfamiliar smile of satisfaction on Sunday night.

He's been trying for almost two decades. And now he can finally say he's beaten Jordan at something.

"It has a certain finality to it," he said. "When moments like this come around, you're really overjoyed by it. At the same time, you know the end is pretty near, which is fine, too."

Associated Graphic

Kobe Bryant's competitiveness may have earned him many enemies in his career, but it's also the reason why he is revered, as was seen after he passed Michael Jordan on the NBA scoring list Sunday.


Monday, November 24, 2014 – Print Edition, Page S2

Atlanta, Minneapolis, Philadelphia, Houston, Chicago, Denver, Indianapolis, San Diego, Santa Clara, Calif. -- Browns 26, Falcons 24

Brian Hoyer shook off three interceptions, leading the Cleveland Browns down the field in the final minute to set up Billy Cundiff's 37-yard field goal as time expired for a victory over the Falcons. Taking advantage of the last of Hoyer's picks, the Falcons drove for Matt Bryant's 53yard field goal with 44 seconds remaining to seize the lead. But Hoyer completed four straight passes, the last of them to the Falcons 19, and spiked the ball with five seconds left. Cundiff trotted on and made his fourth field goal of the game for the Browns (7-4).

Packers 24, Vikings 21

Eddie Lacy rushed for 125 yards on 25 carries, both season highs to help Aaron Rodgers and the Green Bay Packers hang on against the Minnesota Vikings. Lacy scored twice, on a run in the first quarter and a catch in the fourth. Then, he rumbled through the line for two first downs to drain the clock after the Vikings (4-7) cut the lead to three with 3:23 remaining. Rodgers threw two touchdown passes and again avoided a turnover for the Packers (8-3).

Eagles 43, Titans 24

Josh Huff returned the opening kickoff 107 yards, LeSean McCoy ran for 130 yards and the Eagles beat the Tennessee Titans. Mark Sanchez threw for 307 yards and one TD in his third start for the injured Nick Foles. He has 300 yards passing in three straight games, tying a team record. Now, the Eagles (8-3) can shift their focus to the Dallas Cowboys (7-3) for a firstplace showdown on U.S. Thanksgiving. The top two teams in the NFC East will play twice in 18 days, starting with Thursday's game at Dallas.

Bengals 22, Texans 13

Andy Dalton threw for 233 yards and a touchdown and A.J. Green had 121 yards receiving on a career-high 12 receptions to give the Cincinnati Bengals a win over the Houston Texans. The Bengals (7-3-1) led throughout, but Houston (5-6) cut the lead to three points late in the third quarter before Cincinnati tacked on two field goals in the fourth quarter to secure the win.

Bears 21, Buccaneers 13

Matt Forte rushed for two touchdowns in the third quarter, and the Chicago Bears beat Lovie Smith and the Tampa Bay Buccaneers. Jay Cutler threw a two-yard TD pass to Alshon Jeffery as the Bears (5-6) scored 21 straight points to erase a 10-0 halftime deficit. Forte had a 13yard run that put Chicago ahead to stay, and then added a oneyard plunge that made it 21-10. Smith coached the Bears to three playoff appearances and a trip to the 2007 Super Bowl.

Broncos 39, Dolphins 36

Peyton Manning threw three of his four TD passes to Demaryius Thomas and C.J. Anderson ran for 167 yards and the go-ahead score in the Broncos' win over the Miami Dolphins.

Anderson's six-yard run with 5:01 left gave the Broncos (8-3) their first lead of the game at 3228. T.J. Ward's 37-yard interception return of Ryan Tannehill's pass set up Wes Welker's insurance TD catch. The Broncos needed it after Tannehill drove the Dolphins (6-5) on another scoring drive, hitting Jarvis Landry from a yard out with 1:34 left. Lamar Miller's two-point dive made it a three-point game. The Dolphins' onside kick was recovered by Anderson, who sealed the game with a 26-yard run.

Colts 23, Jaguars 3

T.Y. Hilton celebrated the birth of his first child with a 73-yard TD catch, spurring a second-half turnaround that allowed Indianapolis to pull away from Jacksonville. Andrew Luck was 21 of 32 for 253 yards with one score, but his streak of consecutive 300-yard games ended at eight - one short of Drew Brees's NFL record. The Colts (7-4) have won 11 straight against AFC South foes. Jacksonville (1-10) has lost four straight over all and five straight to Indy.

Chargers 27, Rams 24

Marcus Gilchrist intercepted Shaun Hill at the goal line with 56 seconds left to preserve the Chargers' victory against the St. Louis Rams. Gilchrist jumped the route as journeyman Hill tried to force a pass to Kenny Britt on second-andgoal from the four. The Rams Hill had beaten Gilchrist on a sevenyard TD pass to Stedman Bailey with 2:04 left that pulled the Rams within three points. Ryan Mathews had a 32-yard touchdown run and linebacker Andrew Gachkar scored on a 13-yard fumble recovery 21 seconds later to help the Chargers (7-4) tighten the AFC West race.

49ers 17, Redskins 13

Carlos Hyde ran for a go-ahead four-yard touchdown with 2:59 remaining, and the San Francisco 49ers barely squeaked by the lowly Washington Redskins with a 17-13 win Sunday that kept them in the thick of the playoff chase. A fourth-down conversion in their own territory away from losing, the Niners finally capitalized with a rare touchdown in the final period on the way to their third straight victory. San Francisco (7-4) overcame three turnovers.

Edmonton in desperate need of on-ice shakeup
Friday, December 12, 2014 – Print Edition, Page S3


In that long, rambling mea culpa that doubled as a press conference last week, Edmonton Oilers general manager Craig MacTavish largely preached staying the course - because what else can you do when your best-laid offseason plans lie in ruins?

Well, on a practical level, that's one possible approach. The Oilers didn't set out to be bad this season, but now that they are, there's no point in trying to aggressively correct the course and become merely mediocre. In a year when you can potentially draft a generational player - a Connor McDavid or a Jack Eichel - by having an acutely dismal season, it really needs to be all or nothing.

With 19 points in 29 games, a 1-13 record in their past 14 and coming off two losses in a row on their California road trip, the Oilers have zero chance of making the playoffs. They are 15 points out of the final spot and would need to leapfrog seven teams to get there. It isn't going to happen.

Luckily, the consolation prize for being really bad is really good. One could argue that the last true generational players to play in Canada were Wayne Gretzky and/ or Mark Messier. To have a McDavid or an Eichel land in Edmonton would create symmetry, if nothing else. But to think MacTavish's hands are completely tied is a false premise too. There are two steps he could take - one likely obvious to him, the other maybe not - to make the final two-thirds of the season productive on some futures level.

The first would be to shop for a lateral trade.

This is a strategy that has fallen out of favour in the 21st-century NHL for reasons that are difficult to explain.

The presence of the salary cap helped create the current era of trade gridlock. Everybody gets that. Nowadays, if a team is capped out - say, the Boston Bruins - but wants to reinforce its blueline, sorry, it just can't happen easily in December. Better to wait until March and the trading deadline, when three-quarters of the dollars have clicked off those contracts and it's easier to fit the newcomer under the cap.

But that doesn't rule out the possibility of making a trade just to shake things up. Once upon a time, in the 21-team NHL, when all the general managers of the era - Bill Torrey, Lou Nanne, Cliff Fletcher, Harry Sinden - were fishing buddies as well, they did that all the time.

The theory, as Fletcher once expressed it to me, was that you weren't necessarily trying to win a trade outright or delude yourself into thinking that if you swapped your third-line forward for someone else's it would have a major repercussion on results.

Instead, you were hoping for more intangible benefits - getting the attention of a team potentially growing stale, with the same old personnel in the dressing room, by waking them up.

But those were experienced managers, confident in their abilities, who understood that risk was part of the game. So many current GMs are so insecure that if they cannot win a deal outright they'd rather do nothing than look stupid or risk the perception they'd been fleeced.

There are a lot of reasons to ponder why the New York Islanders are so improved this season, but adding what looked like a small piece - defenceman Johnny Boychuk - coming out of training camp made a significant change to the dressing-room dynamic.

The other move within reach is to ponder the benefits of addition by subtraction. You look at the struggles of Nail Yapukov and the support the Oilers are showing for him and you wonder: Is he really learning and improving or showing signs of becoming the next Alex Daigle? And if you believe the latter to be true, maybe it makes sense to trade him.

Sometimes, you'll hear GMs pedantically sniff that they won't make a trade just to make a trade. My question: Why not?

As a manager, there is a fine line between showing patience and acting stubbornly. Being patient is generally a good thing - it proves you won't act rashly in the heat of the moment and immediately have seller's regret. But being too stubborn, and needing to show an increasingly disenchanted fan base that, yes, you were right all along, is a bit like pride. It frequently comes before the fall.

Art that inspires high performance is ready to take a run at the World Cup luge track
Saturday, December 13, 2014 – Print Edition, Page S5

CALGARY -- Whenever Sam Edney puts on his helmet, he takes a moment to think of his new friend, the one who decorated Edney's headpiece so that it resembles a bear. "A ferocious bear," Edney explained. "Jaws opened, its paws coming up."

Just the sort of thing a ferocious luger would love. It is part of a program dubbed Helmets for Heroes, only it isn't Edney, a three-time Winter Olympian, who's the hero. That distinction belongs to the Calgary teenager with Dystrophic Recessive Epidermolysis Bullosa, a rare skin disorder that affects one in 50,000 people.

Richard Flamenco is the artist who drew the bear that Edney will wear in Saturday's World Cup race at Canada Olympic Park. Flamenco has been in hospital for many of his 19 years with a genetic disease that causes the skin to blister and turn fragile. There has been considerable damage to Flamenco's hands and fingers, making it especially difficult for him to draw.

And yet, his artwork is both skilled and inspired.

"I had so many ideas [for Edney's helmet], it was an eenie, meenie, miney, mo situation," Flamenco said. "I asked Sam if he had a favourite animal and he said, 'I like bears and sea otters.' We picked bears."

Helmets for Heroes is the brain child of Brad Spence, a former slalom skier on the Canadian national team who retired last August at the age of 30. In 2005, Spence had crashed while racing a downhill in Bormio, Italy. The fall tore up his right knee, shredding ligaments, breaking bones and leaving his Olympic dreams in a wounded heap.

He switched to the slalom and giant slalom events to go easy on his knees and recovered in time to qualify for the 2010 Vancouver Olympics and later the 2014 Sochi Olympics. In the lead-up to Russia, a friend who worked at the Alberta Children's Hospital oncology department told Spence about a 17-year-old girl who had osteosarcoma, bone cancer. Gillian O'Blenes, who had hoped to become a professional dancer, met with Spence and the two became friends.

It was O'Blenes who decorated Spence's helmet for Sochi. And while Spence was disqualified in his slalom run, he was thrilled to have been able to share his Olympic experience with O'Blenes.

Two months later, the cancer returned and this time it was diagnosed as terminal. As per her wishes, O'Blenes married her high school sweetheart, Michael Kaufman. Spence attended. His wedding gift was the helmet O'Blenes had designed for him.

Spence had hoped O'Blenes would be part of Friday's unveiling of Edney's new helmet, a continuation of what she had helped start. Sadly, O'Blenes died this past Monday night.

Her memorial service is set for Saturday. Spence will speak of his favourite times with O'Blenes and what she meant to others.

"I just didn't realize the inspiration this has had on the people around us," Spence said of the story, which has appeared on television and social media along with newspapers and magazines. "It was this strange calling; my destiny to continue this journey and pay it forward.

The challenge is to find a way to build it so that other kids and athletes could have the same experience."

The long-range goal for Helmets for Heroes is to widen its approach to include all sports, winter and summer, professional and amateur. There will also be a health component dealing with head injuries and concussions. The money raised will go to a designated organization.

The Alberta Children's Hospital is this year's recipient.

Already, the plan is drawing interest. Several athletes have called Spence saying they want to help, and a bidder offered $5,000 to purchase the bear helmet Edney will wear in Saturday's luge competition.

"The first time I talked to Richard, he said, 'I always wanted to play sports with my friends - hockey, football,' " Edney said. "Because he couldn't play sports, Richard had a passion for art. When you see him doing the painting, it's so precise, so meticulous. It's crazy how real the bear's fur looks. It's a piece of art."

As for the artist: "It's been an amazing experience," Flamenco said.

Associated Graphic

Sam Edney shows off the helmet designed by teenager Richard Flamenco at Canada Olympic Park on Friday.


Browns make it official: Manziel to make first start
Its playoff hopes sagging, Cleveland turns to Heisman Trophy winner and first-round draft pick as Hoyer falters
The Associated Press
Wednesday, December 10, 2014 – Print Edition, Page S4

CLEVELAND -- Johnny Football's days as a backup are over this season.

He's getting his chance to start.

Rookie quarterback Johnny Manziel will make his first NFL start Sunday against Cincinnati, replacing the slumping Brian Hoyer as Cleveland tries to pump life into its sagging playoff hopes.

After moving up in May's draft to get him and waiting seven months as he learned and watched from the sideline, the Browns are finally setting one of college football's most captivating players loose with three games left in the season.

Browns coach Mike Pettine made the expected switch on Tuesday after meeting with his staff and general manager Ray Farmer, then informing both quarterbacks. Many Browns fans have wanted the change for weeks as they watched Hoyer fumble away his dream job.

Pettine said in a statement that the switch isn't about Hoyer or Manziel, but about the Browns.

"We are trying to get the offence to perform at a higher level," he said. "Johnny has worked very hard to earn this opportunity and it will be very important for every member of the offence to elevate their play for us to obtain our desired result."

Manziel's debut start will come in Cleveland's final home game, against a Bengals team Hoyer beat on Nov. 6. Manziel will try to show the Browns he can be the franchise quarterback they've coveted for two decades.

Manziel is the Browns' 21st starting quarterback since 1999.

"I've tried to spend my entire season learning what it takes to become a pro and it's been great to watch Brian because he knows what it takes," Manziel said. "I've prepared every week to be ready to help the team however possible and my focus has been on improving every day."

Even before Manziel was told he'd start, the possibility sparked some controversy with Bengals coach Marvin Lewis calling the six-footer "a midget" during a radio interview Monday night.

Lewis later apologized, but the jab stirred the Ohio rivalry.

The Browns really had no choice but to turn to Manziel.

Hoyer has been awful in his past four games, throwing just one touchdown pass and eight interceptions. It hasn't been all Hoyer's fault as teammates have dropped passes and run pass routes incorrectly, but Cleveland needs a spark and Manziel changed games in college with his legs and right arm.

Pettine considered the switch a week ago but stuck with Hoyer, who has gone 10-6 as Cleveland's starter. Hoyer had two interceptions Sunday as the Indianapolis Colts rallied from a 14-point deficit in the third quarter to win.

Hoyer and the Browns' offence picked up only three first downs in the second half.

Manziel's promotion could signal the end of Hoyer's time with the Browns. A Cleveland-area kid who grew up attending Browns games with his dad, Hoyer, who battled back from a season-ending knee injury in 2013, is in the final year of his contract. With Manziel around, it's likely Hoyer will have to sign elsewhere to remain an NFL starter.

"Although I am disappointed by coach's decision, I respect him and his choice and will be there to support Johnny," Hoyer said.

"As always, I will do whatever I can to help this team win."

The No. 22 overall pick in this year's draft, the popular and polarizing Manziel has been on the field just 18 plays this season.

He came off the bench two weeks ago in the fourth quarter at Buffalo, completed five of eight passes and scored on a 10-yard touchdown run.

Manziel won the Heisman Trophy at Texas A&M, where his ability to improvise made him a star and earned him his Johnny Football nickname.

The Browns are hoping he can perform some of that magic on Sundays.

Manziel couldn't beat out Hoyer during training camp and the 22-year-old's off-the-field behaviour, which included weekend trips to Las Vegas, led to outside criticism of his maturity and commitment. The Browns held off on playing him until they felt he was ready, and now Pettine has put the team's season in Manziel's hands.

Johnny better be good.

Associated Graphic

Johnny Manziel will be the Browns' 21st starting quarterback since 1999.


'No stars' Raptors grind out an OT win
Tuesday, December 9, 2014 – Print Edition, Page S2

TORONTO -- Several hours before the Toronto Raptors earned a white-knuckled, overtime win over the Denver Nuggets, a prime opportunity for a shameless plug arose, and Dwane Casey took it.

The Toronto Raptors head coach met reporters with before Monday's game, just hours after the NBA announced that his point guard Kyle Lowry had been named Eastern Conference player of the week for the first week of December - the third such honour of Lowry's NBA career. The fire-bellied Raptor with crunch-time nerves of steel was the top-scoring player in the league over that span, averaging 29.3 points, even put up a careerhigh 39-point night. Currently, his 6.44 assist-to-turnover ratio currently ranks second in the NBA.

"He deserves to be an All-Star this year," said Casey. "I hope our fans are getting out their pencils, 15 to 25 ballots a piece and voting."

Lowry had been snubbed in All-Star voting a season ago, although teammate DeMar DeRozan earned a nod. Lowry, the eight-year NBA point guard who is the Raptors leader, is earning the four-year, $48-million contract extension the team gave him this summer.

But is he considered a star NBA-wide? All-Star voting may tell. He is the third Raptor to be honoured with NBA awards recently - Lou Williams won the player award two weeks ago, and Casey was named coach of the month for November.

Denver Nuggets coach Brian Shaw said he studied the Raptors from top to bottom while preparing for Monday's game in Toronto, and saw no stars. The Raptors have an impressive collection of good players, Shaw qualified, but they're built on teamwork, effort and intensity, not NBA stars.

"I like Kyle Lowry - he's a bully on the floor and that's a good thing at his position," said Shaw.

"He's a leader and always mixing things up. I warned our team this morning that over the last five games, he's leading the NBA in scoring. He averages five rebounds a night as a point guard. He's in the middle of everything that's going on and not afraid to step up and make the big play. If he senses any fear in his opponent, he will go after that."

The floor general himself seems calm and in control. When a reporter asked him Monday about it being the one-year anniversary of the Raptors' trade of Rudy Gay, Lowry found a way to get a laugh rather than be roped into a response.

"Say that again?" Lowry chirped. So the reporter repeated the question, and Lowry once again feigned poor hearing "say that again?" Last week out in Los Angeles, in the first game with DeRozan sitting out with a groin injury, Lowry picked up the slack by taking a whopping 28 shots from the field versus the Lakers and rolled for 29 points and nine assists.

"It's a lot of shots, but it is what it is," said Lowry. "I gotta do what I gotta do to help put the team in position to win games."

He found himself in crunch time came once again Monday at the Air Canada Centre. Despite at one time holding a 17-point lead, the Raptors let Denver charge back and steal the lead in the fourth quarter. Toronto had won the past 38 games they led entering the fourth quarter, and were in danger of ending that streak.

Lowry was slow to come alive, hitting just three of 12 field goal attempts up until the middle of the fourth quarter for just six points. He then found ways to get to the free-throw line in the final moments - seven points worth. Terrence Ross was struggling from the field too. Instead, Lowry found Patrick Patterson, and Toronto pulled back to tie 102-102, sending it to overtime when Lowry's attempt at a buzzer-beater failed.

Ross and Lowry contributed with defence - Lowry on speedy Denver point guard Ty Lawson - while Amir Johnson and Lou Williams did the scoring. The team's streak grew to 39 games, and the Raptors improved to 16-5.

Associated Graphic

Raptors centre Jonas Valanciunas beats Denver's Timofey Mozgov to a rebound in the first half of Toronto's 112-107 overtime win Monday night.


Red-hot Leafs snowed in by tepid Devils
Toronto once again plays down to its opponents, with a 4-0-1 streak snapped by an awful, depleted New Jersey team
Friday, December 5, 2014 – Print Edition, Page S4

TORONTO -- They beat the good ones. They lose to the bad ones. We'll call it The Circle ... The Circle of Leafs.

It's a song that's become so commonplace it's a talking point on talk radio and among the fan base every time a struggling team rolls into town.

Will the Toronto Maple Leafs show up?

Or will they roll over and let key points slip away against an inferior opponent?

On Thursday, it was the latter.

The New Jersey Devils, mired in the Eastern Conference basement with teams such as Buffalo and Philadelphia and missing much of their offensive talent, came in and played an ugly, effective road game - the kind that often works in Toronto - and left with a 5-3 win.

The loss ended a nice little 4-0-1 run for the Leafs, a two-week stretch that had completely turned the narrative of their season from despair to delight.

In there, they beat some good teams - including two from their division in Tampa and Detroit - and held their own against the powerhouse Penguins.

No, they didn't dominate, but the Leafs showed their depth, getting a pile of goals from all over the roster in a departure from years past.

Against New Jersey, however, they were flat as a pancake, and it bit them.

Keep in mind that the Devils are a team in an awful mess.

They came into Thursday having gone 3-9-2 in their last 14 games, a span in which they've been scoring well under two goals a game.

(Thursday was the first time they'd scored five since their second game back on Oct. 11.)

The oldest team in the NHL, New Jersey is also one of its most beat up - missing Jaromir Jagr, Patrik Elias, Travis Zajac, Bryce Salvador, Ryane Clowe and more - and have a weird assortment of bad contracts and unheralded kids all trying to coexist and eke out a playoff spot.

The situation has gotten so dire recently that they lured Scott Gomez out of near-retirement to play a key role - he had more than 15 minutes of ice time - where he started his career.

Netminder Cory Schneider, meanwhile, remains their lone bright spot, but despite a stellar November (.922 save percentage) he won only four of 13 games. He is also being played into the ground given there's no suitable backup.

In other words, a mess.

"We're probably right now where [the Leafs] were after the Nashville game," Devils coach Pete DeBoer said before the puck dropped, recalling Toronto's memorable 9-2 loss to the Preds two weeks ago. "And you know how quickly this league can turn around if you can get things going on the right direction.

"So, hopefully, we can end their [hot streak] and get one started of our own here tonight."

Hot would be kind given the pace of this game. We'll give the Devils tepid. But tepid was enough to beat the Leafs on a night where their top line in particular was a no-show, leading to plenty of speculation in the press box that Phil Kessel is playing hurt.

After going up 1-0 early in the first on a power play, New Jersey then found the go-ahead goal on the man advantage, too, getting a fortuitous bounce for Mike Cammalleri to hammer home.

At that point, there were three minutes left in the second period and the Devils had a 3-2 lead, the kind they have had a hard time holding this year.

Rather than fending off a Leafs onslaught, however, the rest of the way was rather even. Steve Bernier beat Jonathan Bernier (no relation) for the insurance goal early in the third, and Toronto's pushback never really came.

The good news? The Leafs have a good team - the Vancouver Canucks - coming to town on Saturday.

Perhaps they'll win.

Follow me on Twitter:@mirtle

Associated Graphic

Devils forward Tuomo Ruutu gives Jonathan Bernier a face full of snow on Thursday.


Patriots sink Dolphins to clinch AFC East
New England sets team record with 24-point third quarter en route to its sixth consecutive division title
The Associated Press
Monday, December 15, 2014 – Print Edition, Page S2

FOXBOROUGH, MASS. -- Tom Brady was upset that his New England Patriots hardly looked like a division champion in the first half.

So upset that the slow-footed quarterback made a rare scramble for a first down that sparked them to a big third quarter and their sixth consecutive AFC East title Sunday.

"I wasn't in the best mood at that time," Brady said after a 4113 win over the Miami Dolphins.

He and his teammates were feeling better after the game.

"Everything starts with winning your division," Patriots safety Devin McCourty said in a locker room of happy players who looked forward to more raucous celebrations. "We wanted to win big."

Leading 14-13 at halftime, Brady threw two scoring passes in the third quarter and plodded for 17 yards, the third-longest run of his career, to set up LeGarrette Blount's three-yard touchdown on the opening drive of the second half.

"It's good to go in there and finish them off like we did," Brady said.

New England (11-3) scored on its four series of the third quarter and piled up 24 points, a team record for that period.

Miami (7-7) saw its slim postseason hopes dwindle further as it gave up a touchdown on a blocked field goal and Ryan Tannehill threw two interceptions.

"It'll probably take a miracle to get into the playoffs," Dolphins wide receiver Mike Wallace said.

The Patriots started the season with a 33-20 loss in Miami that snapped their winning streak in openers at 10 games.

"We've been waiting all season to get back and play this game," McCourty said.

Now they can secure homefield advantage with wins in their remaining games against the New York Jets and Buffalo Bills.

The Patriots waited a while to take control Sunday.

A horrendous final minute of the first half - three runs that gained two yards, a 32-yard punt return by Miami's Jarvis Landry and a 32-yard touchdown pass from Tannehill to Wallace with five seconds left - cut the Patriots lead to one point.

"We didn't play very well in the first half," New England coach Bill Belichick said. "We just took some not very good football and made it worse and then were able to do things a lot better in the second half."

On the first play of the second half, Brady hit Rob Gronkowski for a 34-yard gain.

"You've got to start off with one play," Gronkowski said, "and start clicking from there."

The Patriots kept rolling with 10 points in 13 seconds. Stephen Gostkowski kicked a 35-yard field goal, giving him a team record 1,160 points, two more than Adam Vinatieri. After Patrick Chung intercepted Tannehill's pass, Brady connected with Gronkowski for a 27-yard touchdown with 4:30 left in the third quarter.

Just over three minutes later, New England boosted the lead to 38-13 on Brady's six-yard pass to Julian Edelman. Gostkowski made it five straight scoring possessions with a 36-yard field goal in the fourth quarter.

"We needed to find a way to stop their momentum," Miami linebacker Jason Trusnik said, "or stop something, and we just didn't."

Brady completed 21 of 35 passes for 287 yards and one interception. Tannehill was 29-for-47 for 346.

Associated Graphic

Patriots tight end Rob Gronkowski celebrates after scoring a touchdown in the third quarter on Sunday. The touchdown capped a sequence in which the Patriots scored 10 points in 13 seconds.


Calgarians salute Grey Cup champions
More than 2,000 fans attend public rally for the Stampeders
The Canadian Press
Wednesday, December 3, 2014 – Print Edition, Page S3

CALGARY -- The Calgary Stampeders basked in the adulation of more than 2,000 screaming fans Tuesday as Calgarians celebrated the team's Grey Cup victory with a public rally at City Hall.

Most of the attention was on Canadian running back Jon Cornish, defensive star Juwan Simpson and quarterback Bo Levi Mitchell, who was named the outstanding player of the Stampeders' 20-16 win over the Hamilton Tiger-Cats on Sunday in Vancouver.

"Now [I] get to fulfil a dream I've wanted to do for a long time - pass it to Mayor [Naheed] Nenshi. The trophy's pretty heavy," laughed Cornish, who was holding tightly to the Grey Cup as the festivities began.

"The most important part of our organization is our fans so I'd like to thank each and every one of you for your support today and throughout the season. If it wasn't for you we wouldn't be standing here today."

Mitchell appeared embarrassed when the crowd starting changing "MVP, MVP" in reference to his performance during the Grey Cup game.

"Y'all are amazing. Obviously I've got to thank every single person here and everybody in this city for being a part of this," he said.

The players, wearing white cowboy hats, stayed on the stage after the rally, talking to fans and throwing foam footballs into the crowd.

It was a bittersweet moment for slotback Nik Lewis, who becomes a free agent.

Lewis, at one point the top receiver for the Stamps, was a 1,000-yard receiver in each of his first nine CFL seasons. He suffered a broken fibula in August, 2013, and has totalled just 69 catches for 777 yards and three TDs over the past two years.

"I wouldn't want to go anywhere else, but it's a game, it's a sport," Lewis told reporters.

"Personally, it wasn't the greatest year, but I grew up a lot this year I've had to learn to grow and I think that just made me a better person, a better teammate and it's a special day to be a part of this," he added.

"Up until August 17th, 2013, my life was great. It was easy. I could put up 1,000 yard seasons. It was easy, but when I got hurt that day it changed a lot. Just to fight to get back to this moment is awesome."

Nenshi paid tribute to the team, its success and fans and declared Dec. 2, 2014 Calgary Stampeders Day.

"I love Canadian football. I love the CFL. This is Canada's game," Nenshi said.

"This, folks, is a team of destiny. This is the best team the CFL has seen in years ... Okay, the best team ever."

Fans bundled up and put on their Stampeder colours to show their support.

"I'm here to cheer on the champs," said Brian Lubbers, who was holding his two-yearold son, Jackson. "The fans are good in this city."

Jennifer Sellon brought her whole family. Wearing a Stamps jersey, tuque and gloves, she was reluctant to let the season come to an end.

"We went to the Grey Cup and we haven't missed a home game and we just wanted to come and support them," she said. "It was an awesome, awesome season.

This is a great Christmas present."

Associated Graphic

Stampeders slotback Nik Lewis lifts the Grey Cup during a rally in Calgary on Tuesday.


Owners OK new personal conduct rules
Special counsel will now mete out punishment and commissioner will have final say on appeals, but union may contest new policies
The Associated Press
Thursday, December 11, 2014 – Print Edition, Page S2

IRVING, TEX. -- NFL owners unanimously approved changes to the league personal conduct policy Wednesday, but Commissioner Roger Goodell will retain authority to rule on appeals.

A special counsel for investigations and conduct will oversee initial discipline, Goodell said.

"This will be a highly qualified individual with a criminal justice background hired as soon as possible for the newly created position," Goodell said. "The person will oversee our investigations and decide the discipline for violations of the policy."

The commissioner also may appoint a panel of independent experts to participate in appeals.

After the Ray Rice and Adrian Peterson cases, a more extensive list of prohibited conduct will be included in the policy, as well as specific criteria for paid leave for anyone charged with a violent crime.

A suspension of six games without pay for violations involving assault, sexual assault, battery, domestic violence, child abuse and other forms of family violence will be in effect, but with consideration given to mitigating or aggravating circumstances.

"The policy is comprehensive. It is strong. It is tough. And it better for everyone associated with the NFL," Goodell said.

The players' union has sought negotiations with the NFL on any revamping of the policy, and said Tuesday it would "reserve the right to take any and all actions" should the owners act unilaterally. The union could consider Wednesday's vote by the owners as a violation of the collective bargaining agreement reached in 2011.

Among the union's options is pursuing a grievance with the National Labor Relations Board.

The players could argue this policy is a change in terms and conditions of employment; the NLRB Act says such changes in unionized situations are subject to collective bargaining.

The union also could consider filing an unfair labour practice charge with the NLRB.

"We expected today's vote by the NFL owners from before Thanksgiving," NFL Players Association spokesman George Atallah said on Twitter. "Our union has not seen their new policy."

NFL general counsel Jeff Pash said Wednesday in a conference call that "it was a mistake in the past" to rely solely on the criminal justice system for looking into legal issues. And he said the commissioner's role in handing out discipline is not subject to collective bargaining.

Last month, an arbitrator threw out Rice's indefinite suspension by the NFL for hitting his then-fiancee in a hotel elevator, freeing him to play again.

Former U.S. District Judge Barbara Jones said Goodell's decision in September to change Rice's original suspension from two games to indefinite was "arbitrary" and an "abuse of discretion."

Peterson's appeal of a league suspension lasting until next April 15 was heard by Harold Henderson last week. Henderson, a former NFL executive, was appointed by Goodell to rule on the appeal and is expected to do so soon.

The 2012 NFL MVP hasn't played for the Minnesota Vikings since Week 1 after he was charged with child abuse in Texas. He was placed on paid leave while the legal process played out, and he pleaded no contest Nov. 4 to misdemeanour reckless assault for injuring his 4-year-old son with a wooden switch.

Finding success in failure
Saturday, December 6, 2014 – Print Edition, Page B3

The "About" line of Stewart Butterfield's Twitter account includes a little stick figure happily shrugging - a visual expression of "c'est la vie" for the emoticon generation.

It seems an oddly casual selfdescriptor for Silicon Valley's current golden boy, the Canadian mind behind one of the most popular photo-sharing services of all time and a new productivity app startup that has reached a billion-dollar valuation before its first birthday.

But during our hour-long lunch in a downtown San Francisco restaurant, the 41-year-old serial entrepreneur who hails from tiny Lund, B.C., will make that very same shrugging gesture on more than one occasion.

"I'm definitely never going to have an opportunity this big again," he says, casually. "Why not see how far we can take it?"

"It" is a new startup called Slack, built around a productivity tool that combines all manner of interoffice communications - from instant messaging to document transfers - into one central hub. Founded in January of this year with a staff of just eight people, the company now employes 65, and recently completed a round of funding that implies a valuation of $1.1-billion (U.S.). In a town full of big new things, Slack has suddenly become the biggest and the newest.

In fact, the only thing bigger than Slack's rapid rise is Mr. Butterfield's plans for its future. In the same casual manner, he says his goal for Slack is to do for communication what Microsoft's Windows did for software: become the unifying hub.

"The useful part of Microsoft was that everything worked together," he says. He speaks softly and without much emphasis. He swears casually and frequently, not for shock value, just as a matter of habit.

"Now, for every product category Microsoft once dominated, you have a dozen great competitors. In every respect ... everything is way better - except nothing works with anything else."

None of this was supposed to happen. Mr. Butterfield's degrees - the first from the University of Victoria, the second from Cambridge - are in philosophy. His early career trajectory was focused squarely on academia, until his own professors warned him against it, predicting a glut of new PhDs would soon have a depressing effect on job opportunities.

But even as a young boy, Mr. Butterfield spent considerable time tinkering with computers.

As a teenager he developed a liking for old-school stoner rock - Phish, The Grateful Dead. On Usenet, the newsgroup system from which modern Internet forums descend, he found vast communities of like-minded fans to chat with.

Hooked, he taught himself HTML, and spent his summers building websites. Eventually he landed a job at a Web design agency in Vancouver. The agency's founder purchased countless domain names, such as and, hoping that as the web exploded in popularity, he could one day sell them at a huge profit. It's a practice commonly known as domain-name squatting, and it's rarely a sign of a tech firm that's going anywhere.

"It was a disaster," Mr. Butterfield says. "I quit literally two weeks before the dot-com crash. I thought I was walking away from 10 million bucks in equity."

A few weeks later, the company Mr. Butterfield left was sold - for $35,000. The bubble had burst.

It was in the shadow of the dotcom crash that Mr. Butterfield first began chasing the project he has yet to complete - building a video game.

Before Second Life, Farmville and a slew of "social" games burst onto the scene, Mr. Butterfield decided to explore the concept of a game in which the gameplay itself was secondary - a mechanism for facilitating the game's true purpose: interactions among the players themselves.

"My father really likes to play bridge," Mr. Butterfield says. "He doesn't like to play against the computer, but he also wouldn't invite [the people he plays with] over to his house just to hang out. There's something about the context of a game - the context of play - that enables a type of interaction that's more interesting."

He founded a small startup called Ludicorp and began working on a project called Game Neverending - and it flopped. It turned out that 2002 - in the direct aftermath of the Sept. 11 attacks, the tech bubble bursting and a slew of big-name corporate accounting scandals - was not a good year to be trying to raise startup money. But Mr. Butterfield and his fellow developers were working on something else while trying to design the game.

It was a kind of photo-sharing site that allowed users to do things such as upload photos through e-mail and tag their friends. As the video game's prospects began to dim, the team decided to focus their attention on this photo-sharing project.

They decided to call it Flickr.

"It's hard to remember now how different things looked back then," says Mr. Butterfield. "I don't think we saw what the potential was, how big it could get."

It got big. By early 2005, Mr. Butterfield and his team had two offers on the table - one from a private investor, another from Yahoo. They decided to go with the search engine, for a price tag of about $25-million. It was a steal for Yahoo - and a decision Mr. Butterfield now regrets.

After three years of frustration at Yahoo - during which the Flickr team constantly had to fight for resources to improve and expand the service - Mr. Butterfield quit. His resignation letter, an absurdist kiss-off that imagines Yahoo as a century-old tin-mining concern, has become the stuff of Silicon Valley lore.

It was a tough time. A few months after the birth of their daughter, Mr. Butterfield and his wife Caterina Fake - who had worked with him on Flickr - divorced. Feeling somewhat dejected, Mr. Butterfield returned to B.C. and eventually turned his attention to his white whale - that video game. He started another company and began working - alongside many of his original Ludicorp colleagues - on a multiplayer game called Glitch.

Once again, the game flopped.

This time, there were fewer outside factors on which to lay blame. The game simply didn't find a large enough audience. In late 2012, Mr. Butterfield pulled the plug on Glitch.

"I hope you're never in this position, where you have to tell 37 people all at once they lost their jobs," says Mr. Butterfield. "People you convinced to move with their families, to put their kids in a new school so they could come work at this company and then, four months later, no job."

While working on the game, however, the development team had become fed up with traditional messaging and collaboration software. So they built a tool, purely for their own use, that wrangles disparate communication animals into one digital pen. The software proved so useful that the team members swore never to work on another project without it. Slack was born.

Essentially, Slack is a piece of collaboration software for internal corporate teams. The software is designed to integrate everything - from instant messages to document sharing - and make it easily searchable. Everything is synchronized across desktop and mobile devices. Everything is in one place.

Betting that other corporate teams would find it as useful as they did, Mr. Butterfield and his team launched Slack as a standalone product. The response was massive. Since launching early this year - and with almost no marketing whatsoever - user growth has skyrocketed. In the span of about six months, the service gained some 300,000 users. Once again, Mr. Butterfield failed to make his video game - and once again, he's found massive success in the process.

Perhaps because of the serendipitous nature of his career trajectory, many of Mr. Butterfield's mannerisms suggest an urgent desire to remain (or at least appear) grounded in the face of astronomic success. He's quick to acknowledge the advantages of privilege he didn't earn.

"I'm very conscious of the fact that being born middle-class, white, male, straight, in a country where people speak English and doesn't have wars - that's definitely a pretty [expletive deleted] big factor," he says.

"Also, I'm smart. I'm not saying that in a braggy way, I was just born with an aptitude for standardized testing ... and I can do math in my head quickly, and it's not like I did that; I was just born that way."

In a town with two elevator pitches for every venture capital dollar, Mr. Butterfield is in the envious position of having to turn potential investors down.

Slack has more backing than it needs.

But Mr. Butterfield is also keenly aware that all those deep-pocketed investors who turned Slack into a billion-dollar company are expecting billion-dollar returns - and for all of Slack's early-days growth, it is nowhere near that level yet.

"It's very easy to pat yourself on the back and congratulate yourself and feel like you've now accomplished something," he says, "when now we have to earn that valuation."

On the way out of Trou Normand, the downtown restaurant where we met for lunch, Mr. Butterfield stops to take a quick cellphone picture of two severed pigs' heads on a kitchen table.

Trou Normand is a charcuterie joint, and almost everything on the menu likely originated from one of those two animals. The decision to eat here regularly came back to bite Mr. Butterfield recently, when he took one of his company's most famous investors, the actor Jared Leto, to the restaurant. Mr. Leto is vegan.

Slack's office is just a couple minutes' walk from Trou Normand. It occupies a largely openconcept space on the first floor of a nearby office building. A painting of the founder, drawn in a parody of a banana republic despot's portrait, hangs on the wall.

Mr. Butterfield is good-looking in an easygoing, clean-cut surfbum kind of way, with a couple days' worth of copper stubble.

These days, he splits his time between San Francisco and B.C. In the Valley Mr. Butterfield spends most of the time doing interviews (both with media and prospective employees), and talking to investors. He retreats to Vancouver to do most of his thinking about Slack's design and functionality. Wherever he goes, there's usually a ukelele nearby - he plays old Irving Berlin and Cole Porter standards for fun.

If that laid-back attitude is an act, a means to seem grounded in a cutthroat and outrageously cash-rich industry, it certainly doesn't show. And beneath the B.C. hippie-kid exterior is a CEO who understands - from a slew of previous failures - that Slack's future is far from certain. For all its early success, the company is operating in what will soon become a very crowded market.

And with massive user growth comes massive pressure - especially on fixing areas where Slack still lags behind some of its competitors, such as e-mail integration. In an industry where million-user startups come and go every day, Mr. Butterfield understands that being Silicon Valley's newest darling is no guarantee of long-term success.

"It would not be difficult for me to [expletive] it up," he says. "I can [expletive] it up today."


Stewart Butterfield's Yahoo resignation letter, addressed to his former manager, Brad Garlinghouse, in June, 2008:

Dear Brad, As you know, tin is in my blood. For generations my family has worked with this most useful of metals. When I joined Yahoo! back in '21, it was a sheet-tin concern of great momentum, growth and innovation. I knew it was the place for me.

Over the decades as the company grew and expanded, first into dies and punches, into copper, corrugated steel, synthesized rubber, piping, milling equipment, engines, instruments, weaponry and so on, I still felt at home because tin was the core of the business... Since the late 80s, as the general manufacturing, oil exploration and refining, logistics and hotel and casino divisions rose to prominence, I have felt somewhat sidelined.

By the time of the Internet revolution and our expansion into websites, I have been cast adrift. I tried to roll with the times, but nary a sheet of tin has rolled of our own production lines in over 30 years.

In my 87 years service, I've accomplished many feats, shared in the ups and downs, made great friends and learned a tremendous amount ... but there is a new generation now and it would be unfair not to give them a chance. Those that started in the make-work programs of the depression, on the GI programs in the late '40s and even those young baby boomers need their own try without us old 'uns standing in the way.

So please accept my resignation, effective July 12. And I don't need no fancy parties or gold watches (I still have the one from '61 and '76). I will be spending more time with my family, tending to my small but growing alpaca herd and of course getting back to working with tin, my first love.

Your old tin-smithing friend and colleague, Stewart Butterfield

Associated Graphic

Stewart Butterfield, co-founder of Flickr, founder and CEO of Slack


Saudi Arabia has a big problem - and it's called oil
Saturday, December 13, 2014 – Print Edition, Page B2

JEDDAH, SAUDI ARABIA -- I knew fuel was cheap in Saudi Arabia, but I had no idea how ridiculously cheap. I found out when the driver of the big BMW who picked me up at the Jeddah airport pulled off the highway and paid the equivalent of $8 (U.S.) for a fill-up. Gasoline in the kingdom costs about 16 cents a litre. Water costs more.

No wonder that the notion of oil conservation is considered absurd in this country. In my six days in Saudi Arabia, in three cities on two coasts, I never saw a bicycle, a scooter or an electric car. The cars are huge; the most popular vehicle is the Toyota Hilux, the equivalent of the Ford F-series pickup truck. Everyone drives (except women, who are denied the privilege) and no one walks. With apologies to Fran Lebowitz, the outdoors in Saudi Arabia is what you must pass through to get from your apartment to your car.

No wonder there are worries that Saudi Arabia, the world's central bank of oil and OPEC's biggest producer and exporter, faces an energy crisis in a couple of decades. Domestic demand for oil is climbing so fast that Citigroup, in a 2012 report, predicted that the country would be a net oil importer by 2030.

While the idea seems outrageous, it is mathematically feasible. That's because strong economic and population growth - two-thirds of Saudis are under age 30 - are pushing up oil demand by about 5 per cent a year. The apparent effort to turn Saudi Arabia into a sand box jammed with cars can't take all the blame. Oil supplies about half of the country's electricity demand and that too is soaring.

The extreme heat means that air conditioning is a necessity. Ditto desalinization plants to provide fresh water (a Saudi aquifer that was once the size of Lake Erie is 97 per cent drained). In the summer inferno, 800,000 barrels a day of oil is required for electricity generation alone.

Cutting oil exports to feed the domestic economy would be financial suicide for Saudi Arabia, all the more so since domestic sales are heavily subsidized (two years ago, when oil was well over $100 a barrel, Saudi power producers were paying a mere $5 to $15 for oil and it's probably less today, now that prices have collapsed). The economy is powered almost exclusively by oil exports and the government and Saudi Aramco, the state-owned oil giant, would do anything to keep the export spigot open.

Still, the Citigroup report, which was dismissed as fantasy in Saudi Arabia, is probably directionally right. It's hard to see Saudi exports rising from the current 7.7 million barrels a day when the domestic economy is getting ever thirstier for oil. The kingdom's rulers have a problem, because strong oil exports are required to finance the vast social programs, ranging from free university to subsidized employment. The bill is climbing because the monarchy ramped up social spending when the Arab Spring triggered revolutions in Tunisia, Libya and Egypt. A Saudi university professor I met this week told me that the lure of democracy would not bring the Arab Spring to Saudi Arabia; falling living standards would do it, he said.

Officially, Saudi Arabia is making grand plans to reduce the domestic demand for oil, or at least slow its growth. Aramco has launched an aggressive hunt for natural gas that could be used to replace the oil slurped up by the electricity plants. Even before the plants are converted to gas, there is a campaign to make them far more efficient. Nuclear reactors may come and investments are being made in photovoltaic and thermal solar power. If there is one commodity Saudi Arabia has in abundance besides oil, it is sunshine.

But when you are on the ground in Saudi Arabia, it's hard to take the endless talk of "sustainability" seriously. It remains overwhelmingly an oil-powered economy. In my travels, I did not see a single solar panel or wind turbine. Public transportation is an afterthought in spite of the burgeoning urban population, although a high-speed rail link is being built to connect Jeddah and the holy cities of Medina and Mecca. Car ownership rates are rising relentlessly. In the year to August, car sales rose 11 per cent from the same period in 2013.

The dependence on oil might even be increasing. A case in point is King Abdullah Economic City (KAEC), one of four new "economic" cities being built in the kingdom. Located on the Red Sea about 100 kilometres north of Jeddah, the $100-billion, privately funded project will feature housing for two million people, one of the world's biggest deepwater ports (already operating), and industrial and commercial zones. The city is about 10 per cent built, but you can already tell it was designed for the car, not pedestrians. A low-density wonder, it will sprawl across an area the size of Washington, D.C. The downtown will be 16 kilometres from the residential area.

The irony of KAEC is that it is being built to create non-oil commerce and industry in Saudi Arabia, yet the city will be utterly dependent on oil to survive. Saudi Arabia's problem - the lack of renewable energy - will ultimately become a global problem. More oil for internal consumption will translate into less oil for exports. And that will mean higher prices for everyone.

The return to normal hinges on three little words
Monday, December 15, 2014 – Print Edition, Page B2

When the Federal Reserve's latest rate-setting meeting wraps up Wednesday, analysts will be watching closely for the fate of three little words.

If they remain in the Fed's public statement, the markets will take it as evidence that policymakers remain comfortable with leaving things just the way they are during a period of rising market volatility, falling oil prices and low inflation.

But if the key words - "a considerable time" - are missing, it will be read as a hawkish signal that the long-awaited return to more normal interest rates is coming sooner rather than later.

Ever since the Great Recession of 2008, the Fed has vowed to keep short-term rates at rock-bottom levels for as long as necessary to get the U.S. economy back on its feet and people back to work. It also launched three unprecedented rounds of quantitative easing, buying huge amounts of bonds and other assets in an effort to lower longerterm rates and stimulate lending.

Last March, a couple of months after it had begun gradually reducing that massive bond-buying, the central bank reaffirmed that it would keep rates around zero for "a considerable time." And the phrase has remained a critical signal of the central bank's direction ever since.

Now, it appears poised to change that guidance, even as it leaves rates unchanged.

The hints come from a Wall Street Journal article last Monday by its Fed watcher, Jon Hilsenrath, who wrote that officials "are seriously considering an important shift in tone at their policy meeting."

It's not unusual for the Fed to provide an early warning to the markets of such a change. In this case, two of the central bank's more influential figures, vicechairman Stanley Fischer and New York Fed president William Dudley, make an appearance.

"It's clearer that we're closer to getting rid of that [language] than we were a few months ago," Mr. Fischer told the WSJ. Mr. Dudley, meanwhile, has not used the phrase in recent speeches.

Until that article, "we were of the view that the Fed would maintain the same language, more or less, and wait to see how oil shakes out and how the key shopping season goes," said Doug Porter, chief economist with BMO Nesbitt Burns in Toronto.

"There was debate at the last [policy] meeting over whether to drop the 'considerable time' language. And it's erupted again," Mr. Porter said. "It does look to be a close call."

Still, the hawks-versus-doves debate on when to begin the next cycle of monetary tightening remains far from settled.

"There are obviously members who are going to be impressed by some of the stronger economic data," said long-time Fed watcher Robert Brusca, chief economist with FAO Economics in New York.

"But I don't think that's going to change many opinions. The hawks on the committee will feel more like they're right and the Fed had better get moving. And the doves are going to feel that inflation is still undershooting."

Indeed, weak inflation numbers and a lack of strong wage growth rob the hawks of their favourite argument that higher interest rates are vital to keep prices and wage pressures in check as the recovery takes hold.

Inflation has consistently come in below the Fed's 2 per cent target for more than two years, and has averaged less than 1.5 per cent throughout the economic recovery. The Fed itself doesn't see any pickup in inflation before 2016.

Mix in the deflating impact of falling oil prices on the U.S. economy - which the Fed regards as a temporary phenomenon - and more stumbles in Europe, China and Japan, and there seems little logic in switching to a tightening bias now.

"It's not even clear that the Fed is going to tighten next year," said David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates in Toronto.

"The markets are thinking the mid-part of 2015. That's partly because various Fed officials have been talking about that particular time frame. But we know that's a moving target ... It may well be years before the Fed or the Bank of Canada embark on a renewed tightening cycle."

Mr. Brusca agrees. "As long as the economy is still growing weakly and there's no risk from inflation, there's no danger in the Fed saying rates will be low for a considerable period of time. We know for a fact that when things change, the Fed will have to raise rates. But there's no evidence that anything is changing."

Even when the United States shrugs off the effects of cheaper oil and inflation picks up a bit, Fed chief Janet Yellen and her colleagues should be in no rush to tighten policy ... regardless of whether they keep those three little words of guidance.

Associated Graphic

Federal Reserve Chair Janet Yellen and her colleagues should be in no rush to tighten monetary policy.



Poor experience a wealth revival as innovation slashes prices
Friday, December 12, 2014 – Print Edition, Page B2

A dollar is only worth what it can buy. Because this is the case, when we get exercised over wide gaps in income between the better and the less well-off, we miss a whole dimension of inequality that actually matters much more. If those at the bottom of the income scale are actually getting more for their money, their standard of living is rising even though their cash income may not be.

The classic example is Moore's Law, which states that the computing power of a silicon chip will double every two years. Moore's Law didn't deal with price directly, yet the computer power available to the ordinary consumer has been rising roughly in accordance with his law, while prices have been falling. That's why I paid less last year for a replacement laptop far more powerful than its predecessor that was bought a few years before.

Households at every income level are stocked with electronics whose prices behave in the same way. People at the low end of the income scale are getting more and better and paying less than ever before. Consumers don't even need big computing power at home. They can buy cheaper tablets and use online software and data storage that are less costly. Technological innovation is making computing ever more accessible to the technologically illiterate, who are often the least educated.

This rise in the purchasing power of the poor isn't only observable in consumer electronics.

A revolution in logistics and retailing has contributed massively. Urban elites who like to shop at Whole Foods and the Gap decry income inequality while sneering at Wal-Mart and Costco, which have dramatically cut the cost of a wide array of consumer items that their customers actually want to buy. And those retail giants are under pressure from the Amazons and others who have got out of the costly bricks-and-mortar retailing business. Instead, low-income consumers can use their low-cost computing power to shop online and cut out the middle man.

They don't need expensive, low-tech newspapers and flyers delivered by posties to get special deals that stretch their dollar further. They can just monitor Groupon or Ebates. In fact, Big Data is increasingly delivering direct to low-income consumers offers of low-cost goods and services specifically tailored to their incomes and buying patterns; the special offers will come to them.

Technology is increasingly allowing those on low incomes to escape the too-high cost of regulated services. They can't (yet) unplug from the electricity grid, but they can certainly dump their land line in favour of a fixed-price cross-Canada calling package on their mobile phone.

If developing countries are any guide, that mobile phone will allow them to escape reliance on expensive banking services, as the phone becomes a mobile wallet, chequing account and credit card. Consumers can't (yet) escape the abusive supply management that drives up the cost of their milk and poultry, but they can escape the local taxi monopoly in favour of Uber.

Indeed, if they have a car, they might be able to become an Uber driver and supplement their income.

Speaking of cars, the moment is coming when they will be the shining example of how globalization increases the purchasing power of the poor. As places such as China and India reach ever higher levels of income and technological sophistication, they are applying their impressive intellectual and entrepreneurial abilities to reducing the cost of consumer goods to the point that they are within reach of the teeming millions of their home countries whose incomes are still tiny. As they do, we will benefit from their innovations, and no one more so than those on low incomes here at home.

China's Geely brought out its IG car a few years ago to compete head to head with the Nano model made by Indian car maker Tata. While the average newcar price in the United States is now more than $30,000 (U.S.), these two cars each sell for less than $3,000 in their home markets. Forbes writer Haydn Shaughnessy said a few years ago that when this innovation hits North America and meets our standards, these basic cars won't cost $3,000, but more likely $10,000. As economist Tyler Cowan notes in The New York Times, emerging economies are keeping down the costs of manufactured goods, but they have a way to go before they are innovative enough to send us new products. But if Japan and South Korea are any measure of what will happen when they do, markets and innovation will almost certainly continue to allow lowincome people to get rising value out of their cash incomes.

Brian Lee Crowley ( brianleecrowley) is the managing director of the Macdonald-Laurier Institute, an independent non-partisan public policy think tank in Ottawa:

Associated Graphic

Technological advances are damping down the cost of products in many areas, increasing the spending power of low-income consumers.


Oil price limits Talisman's options
Wednesday, December 10, 2014 – Print Edition, Page B2

I wonder if Talisman Energy Inc.'s legal department has a function on its computers that allows it to spit out "We're in talks with Repsol" press releases with a single keystroke.

It would be useful, given that Talisman has to keep telling regulators in the scantest of details about discussions on potential deals with the Spanish oil company. It disclosed the latest episode on Monday.

This time, though, the pressure on Talisman to sell is much greater than it's ever been, certainly more so than during its past tango with Repsol in the summer.

With oil prices in rapid decline, the Calgary-based oil company faces declining cash flow expectations, a sizable debt burden, an intractable operational problem in the North Sea and a weakened stock price.

Chief executive Hal Kvisle, who had expected to be retired by now, still has asset sales planned to help cut the debt, though the energy market's slump makes potential buyers a bit poorer and, perhaps, less anxious to snap up properties.

In its brief statement on Monday, Talisman did not say if rekindled talks with Repsol - and others this time, apparently - involve selling assets or the whole company. If it is the latter, it's a dirge of a swan song for a Canadian company that was once an active consolidator of oil and gas assets around the world.

Talks between the two cooled off last summer after Repsol was unable to find buyers for the Talisman assets it did not want to keep, according to a Bloomberg report at the time. But that was before oil really hit the skids.

Even then, some analysts questioned how Talisman might be able to match its cash flow with the capital it needs to expand production while maintaining dividends, given its asset sale plans.

Now, properties that might have looked sort of pricey to Repsol with crude at $98 (U.S.) are downright cheap with oil in the $60s, and perhaps that's what it's counting on - storewide bargains.

The company has long expressed an interest to snap up oil and gas assets in Organization for Economic Co-operation and Development countries, using $5-billion in proceeds it received following the nationalization of its assets in Argentina. The war chest can pay for a lot these days.

It's all fine for a buyer with deep pockets and a plan, but bad for investors in Talisman.

Some may have held out hope for a turnaround and return to a stock price of three years ago above $20 (Canadian), but oil markets keep pushing the goalpost further away. The shares have climbed by around 20 per cent since word of Repsol's return spread on Monday, but it is still worth less than $5.

In 2013, the entrance of activist investor Carl Icahn raised hopes of a silver bullet that Mr. Kvisle and the board of directors had somehow missed, even as a turnaround plan was already in motion. More than a year later, it looks like the investor optimism was misplaced.

Mr. Kvisle, an oil-patch veteran, has said often the North Sea assets have acted as a virtual poison pill turning away wouldbe buyers. Under an agreement with China's Sinopec, its partner in the operation, the company is locked into investing hundreds of millions of dollars annually through 2016. Also, with high abandonment liabilities, the overall value of the assets is diminished.

All of this masks some impressive operations around the world, including in Southeast Asia, where its offshore business is a perennial money-maker, and the Eagle Ford in Texas, which was slow to develop but this year showed promise.

In addition, Mr. Kvisle has said he is close to finalizing a deal to sell its gas pipeline and processing assets in the Marcellus shale region of the U.S. Northeast, one that could bring in a hefty sum and help reach his asset-sale goal of $2-billion (U.S.).

The problem: lower oil prices make the goal look light. Analyst Phil Skolnick, in a parting shot as he left his position as head of North American energy research for Canaccord Genuity last week, projected that, with $70-a-barrel oil, proceeds will have to double for Talisman to get its debt down to 11/2 years worth of cash flow, which is an acceptable load for the industry.

The extra $2-billion would equate to about 45 per cent of the company's current market capitalization.

If there is a silver bullet, now would be the time for Talisman to use it. A takeover would mean one fewer Canadian energy company punching above its weight class in international markets, after having been plucked at the bottom of the market.

Associated Graphic

The falling price of crude oil could facilitate Repsol's acquisition of Talisman assets, if not the entire Calgary-based company itself.


Holiday creep hits Black Friday, but will shoppers spend?
Monday, November 24, 2014 – Print Edition, Page B2

Black Friday, the annual orgy of U.S. consumerism that traditionally marks the start of the holiday shopping season, has long been infamous for fist fights, tramplings and scenes of chaos that routinely end up on the evening news.

For the morbidly curious, there's even a website,, that tracks the number of people who have been killed or injured in the mayhem.

Now, Black Friday itself is in danger of getting trampled.

With U.S. retailers desperate to boost sales in an environment marked by sluggish growth and cash-strapped consumers, the deep discounts and hype associated with Black Friday are starting earlier than ever. By the time the actual Black Friday rolls around on Nov. 28 - the day after U.S. Thanksgiving - many consumers will be shopped out.

"Over the last few years Black Friday has lost a lot of significance, and the reason is that there are so many sales," said Sucharita Mulpuru, retail analyst with Forrester Research.

Wal-Mart Stores Inc., for example, unveiled its first holiday "rollbacks" on Nov. 1, cutting prices on thousands of items. On Nov. 21 - a full week before Black Friday - it launched a "Pre-Black Friday Event," offering to match or beat competitors' holiday deals on toys, electronics and other merchandise.

"The retail environment is incredibly competitive and we know that our customers are looking to us for the lowest prices and great deals all season long," said Duncan Mac Naughton, chief merchandising officer for WalMart U.S.

Other chains including Target Corp. and Staples Inc. also launched holiday sales long before Black Friday. At hhgregg, a national electronics and appliance store, the retailer moved up many Black Friday specials to Nov. 20, offering discounts of up to 40 per cent on TVs, gadgets and other items.

The chain's "Doorbuster" deals - including a 65-inch Sharp Aquos LED Smart HDTV for $688 (U.S.) and a Samsung front-load washer for $399 - will be available in limited quantities starting at 4 p.m. on Thanksgiving Day, when other retailers also plan to open their doors. It's virtually impossible to find a retailer that is waiting until Black Friday proper to launch its Black Friday sale.

The hype surrounding Black Friday has spilled into Canada, where companies are also jumping the gun. A glossy four-page insert from Chrysler Canada Inc. dealers, for example, advertises a one-week "Black Friday Sales Event" that started on Nov. 21. And Future Shop launched an "early Black Friday sale" on appliances and TVs.

That Black Friday spending is spread out over several weeks, instead of a few days, is reflected in data from the U.S. National Retail Federation. According to a recent NRF survey, an estimated 67.6 million people plan to shop on Thanksgiving weekend - Thursday, Friday, Saturday or Sunday - is down 2.6 per cent from last year. The number of consumers who will wait to see what deals are offered before deciding whether to shop, meanwhile, rose 2 per cent to an estimated 72.5 million.

"We could witness a sea change this holiday season as consumers' reliance on extremely deep discounts over the biggest shopping weekend of the year shifts to more of a 'wait-and-see' mentality around what retailers will be offering on Thanksgiving Day and Black Friday," said NRF president Matthew Shay.

Those who wait until after the Thanksgiving weekend may be glad they did, said Dwight Hill, a partner with retail consultants McMillan Doolittle.

"Shoppers who don't blow their entire budget on Black Friday weekend will reap the benefits of Black Friday or better prices during the last two shopping weekends before the holiday," he predicted.

"Last year we were seeing 40 per cent or more off entire purchases at major specialty chains during that period, as retailers affected by two major winter storms that kept shoppers away in early December panicked as they struggled to clear inventories."

Another major reason Black Friday isn't the singular event it used to be is the Internet. About 8 per cent of retail purchases are made online, but during November and December that spikes to 11 or 12 per cent, said Ms. Mulpuru of Forrester. Online sales are growing steadily, and they reflect a broad trend, not just a temporary bump from Cyber Monday.

"E-commerce has had a huge impact," Ms. Mulpuru said. "There are people who love the sport of Black Friday. There are also a bunch of people who hate shopping and fighting the crowds and looking for parking and not being able to find the item they want. So it's easier just to shop online."

Associated Graphic

U.S. shoppers lined up for Black Friday deals on TVs at Target last year. This year, the deals are coming before Thanksgiving.



TSX's dramatic drop deepens as oil plunges toward $60
Loonie falls to another five-year low, a sign investors are growing increasingly pessimistic about Canada
Tuesday, December 9, 2014 – Print Edition, Page B1

Declining crude oil prices are taking a brutal toll on the Canadian stock market, as investors take a dim view of the country's economic prospects in an era of cheap, plentiful energy.

The benchmark S&P/TSX composite index fell 329.50 points or 2.3 per cent, to 14,144.17, marking its worst stumble in about 18 months.

At its lowest point during the day, the index was down as much as 490 points.

The Canadian dollar fell to another five-year low of 87.10 cents (U.S.), down more than a third of a cent and offering another signal that investors are growing increasingly pessimistic about all things Canada.

The latest setback certainly ramps up the drama surrounding the commodity-exposed Canadian market, but it also continues a painful downturn that has persisted for more than two weeks.

The benchmark index has fallen a total of 6.4 per cent since Nov. 21 - eroding its year-to-date gain to just 3.8 per cent as investors ponder where oil is ultimately headed and what the repercussions will be.

The price of oil has retreated to five-year lows amid evidence that the world is producing more crude than the global economy can consume.

Despite the appearance of a glut, the 12-nation Organization of Petroleum Exporting Countries announced in late November that it will maintain its current level of oil production, exacerbating worries that highcost producers in Canada and the United States will be forced to cut production.

"In our opinion, crude prices will remain in the $70 to $80 [a barrel] range for the next two to three years," said Scott Vali, a portfolio manager at the Canadian Imperial Bank of Commerce, in a note. "Below this level, production growth falls."

Oil fell to $62.95 a barrel in New York, down $2.89. That brings the overall decline since the summer to about 40 per cent and dealing yet another blow to key Canadian producers, which are already mired in a bear market.

The energy sector fell 5.7 per cent for its worst setback in more than three years.

Among the worst casualties, Canadian Oil Sands Ltd. fell another 10.4 per cent. The stock, a key component of the oil patch, has fallen nearly 50 per cent his year and is sitting at its lowest point in more than a decade.

Anyone who has avoided energy stocks has been spared some of the sharpest dips in the stock market, but the selloff is now spreading well beyond the oil patch.

The country's Big Banks, widely perceived as profit-growing and dividend-raising machines, were hit during Monday's selloff.

Toronto-Dominion Bank fell 2.8 per cent and Bank of Nova Scotia fell 1.7 per cent.

Analysts have been growing more cautious of the banks because of slowing earnings growth and high debt levels among Canadian homeowners.

But lower oil prices offer another risk. If energy companies cut back on exploration and drilling, Canadian economic activity could be affected, potentially disrupting everything from consumer spending to real estate prices.

"It is likely the case that the direct impact of a drop in oil prices on the Canadian economy is negative as lower activity in the oil and gas sector offsets, at the national level, the benefit to consumers from lower gasoline prices," Royal Bank economists said in a note.

However, they believe that the damage will be limited to the oilproducing provinces of Alberta, Saskatchewan and Newfoundland and Labrador; oil consuming provinces such as Ontario should enjoy the benefits of cheaper energy.

Observers believe that falling crude oil prices are similarly good news for the United States, Europe and Japan, if consumers spend the money they are saving from cheaper gas.

"An extended period of lower oil prices should be positive for the global economy as a whole, including key emerging economies led by China and India," said Julian Jessop, chief global economist at Capital Economics, in a note.

This explains why the contrast between the Canadian stock market and most of the rest of the world has been nothing short of stunning.

The S&P 500 fell 0.7 per cent on Monday - weighed down by energy stocks and falling monthly sales at McDonald's Corp. - but that's from a record-high close on Friday.

European blue-chip stocks fell 0.9 per cent and Japan's benchmark index rose 0.1 per cent, extending its recent winning streak to seven days even though the country's recession appears deeper than originally expected.

A tough two weeks*

S&P/TSX -6.4% Energy -17.2% Financials -3.6% Materials (mining) -5.1% *Canadian stocks since Nov. 21, as WTI oil prices tumbled 17 per cent

Poloz caught between debt and an oil price
Tuesday, December 16, 2014 – Print Edition, Page B2

Events in the world economy, combined with recent data released from the Bank of Canada, reveal why conducting monetary policy is so difficult. We may not need to feel sympathy for Bank of Canada Governor Stephen Poloz, but we should at least understand and appreciate how conflicting economic forces can complicate his policy decisions.

The first major force is the massive decline in the world price of oil from $105 (U.S.) a barrel in June to below $60 today.

As is the case for most changes in important market prices, the decline in the world price of oil creates both losers and winners in Canada.

For those directly involved in the production of oil, concentrated in Alberta, Saskatchewan and Newfoundland, the price decline leads to an immediate and large reduction in income.

And as oil producers scale back their investment plans, the negative impact spreads to the many industries supplying the oil patch. On the other hand, for consumers across the country, and for businesses that use oil intensively, the decline in the price of oil is a financial windfall. Not surprisingly, economic activity in Ontario and Quebec, which are still the heart of Canadian manufacturing, will benefit significantly.

Offsetting economic fortunes across industries and regions caused by fluctuations in relative prices are nothing new for Canada, but monetary policy can do little or nothing about them. The Bank of Canada needs to focus on the aggregate level of economic activity, and make policy decisions accordingly. And since Canada is a large net exporter of oil, it follows that the decline in the world price of oil is a net negative for Canadian GDP, as Mr. Poloz has repeatedly said.

Taken alone, the decline in oil's price would lead the bank to have looser monetary policy than would otherwise be the case. At a minimum, this would mean delaying the time of interest rate increases; depending on how long oil prices remain low, it could even lead to reductions in the already-low policy interest rate.

But there is another major force complicating things for the Bank of Canada. Ongoing increases in household debt, and the rising house prices associated with it, have been a topic of discussion in this country for several years. In the latest Financial System Review, the bank points out that household debt is at an all-time high of 163 per cent of disposable income; more worrying is that more than 40 per cent of households have debt in excess of 250 per cent of their income.

Much of this debt is being used to purchase home mortgages, and the bank notes considerable growth in riskier "non-prime" (i.e., "subprime") mortgage lending, especially from the smaller commercial banks. The bank also raised eyebrows by publishing its estimates showing that, on a national basis, houses are between 10- and 30-per-cent "overvalued"; the 20-per-cent midpoint of the estimated overvaluation is exactly where we were in 1990 - just before a sizable housing crash.

The danger, of course, is that if house prices do decline sharply, balance sheets around the country, which are already chock full of debt, will be weakened considerably.

Given the current Canadian context, such a combination may not lead to a massive recession, but it would certainly worsen an already-tepid economic recovery.

Taken alone, the rising debt and rising house prices would probably lead the Bank of Canada to raise its policy interest rate sooner than would otherwise be the case. An alternative would be for the Minister of Finance, in an effort to take some steam out of that market, to take further actions on adjusting the terms and conditions of residential mortgages or mortgage insurance. Yet Joe Oliver appears less willing than Jim Flaherty was to take such actions.

Where does all of this leave Mr. Poloz and his deputies? In addition to the hundreds of other variables they are studying, they are thinking carefully about these separate major forces - falling global oil prices and rising domestic debt and house prices - and figuring how they "net out" to determine the bank's best policy actions. This requires a great deal of both analysis and judgment.

So, the next time you hear Mr. Poloz discuss these many economic forces and then announce that he's holding the policy interest rate unchanged, you'll understand why he claims that sometimes it takes a lot of work to do nothing.

Christopher Ragan is an associate professor of economics at McGill University and a research fellow at the C.D. Howe Institute.

Enbridge asset shuffle spurs shares to record high
Friday, December 5, 2014 – Print Edition, Page B1

CALGARY -- Enbridge Inc. shares surged to a new high on a sweeping plan to restructure its finances by transferring $17-billion of Canadian assets into an income fund it controls, allowing the pipeline company to bump up its dividend by a third.

In what is known as a dropdown, Enbridge is shifting ownership of the Canadian portion of its main oil pipeline network, its regional oil sands lines in Alberta and wind farms into the Enbridge Income Fund. The move will lower the cost of funding $44-billion of new projects it has on the drawing board, it said.

The parent company has not garnered sufficient value in the stock market despite a solid record of increases in earnings per share and a long list of planned projects that will boost cash flow, said Al Monaco, Enbridge's chief executive officer. It has several developments in the works apart from those facing lengthy delays, such as the contentious Northern Gateway oil line to the West Coast from Alberta.

Investors drove Enbridge shares up more than 11 per cent to a record high of $60.70 on the Toronto Stock Exchange, even as energy shares continued their steep recent slide along with oil prices.

Enbridge investors were elated by the initial dividend increase and further expected dividend increases of 14 per cent to 16 per cent annually between 2015 and 2018.

Enbridge Income Fund., meanwhile, jumped 8 per cent to a new high of $33.91.

Its shareholders will be beneficiaries of a much larger suite of assets that will now expand, spelling higher payouts. Enbridge currently has a 65-percent stake in EIF.

Enbridge rival TransCanada Corp. has found itself in the crosshairs of an activist investor, which is pushing for a similarly aggressive drop-down of assets as well as a split-up of divisions as a way to boost value for shareholders.

Enbridge said it has not been pushed into its restructuring by outsiders, though the move will likely head off any potential approaches.

"We have a very strong base plan, previous to this change in payout policy and previous to the drop-down announcement, but the reality is, in order for us to be competitive, we need to be ensuring that our valuation is maximized," Mr. Monaco said in a conference call to explain the move, the company's largest-ever financial restructuring, announced late Wednesday.

"It's our job to do that, and we think that this structure in combination with the dividend payout will hopefully be reflected in the marketplace," he said.

Mr. Monaco said the company is contemplating a similar move with the U.S. portion of its oil mainline, the main conduit for shipping Canadian oil supplies to refineries in the U.S. Midwest, Midcontinent and into Eastern Canada.

The restructuring is positive for holders of both entities, because it adds to each one's earnings per share, Steven Paget, analyst at FirstEnergy Capital Corp., said in a research note.

Under the plan, Enbridge will transfer ownership of the assets, which are valued at $17-billion, into the fund in exchange for a higher equity stake. Once the deal is completed, Enbridge will own about 90 per cent of EIF and will keep operating the assets.

Essentially, the move shifts Enbridge's financing to the income fund. As a high-payout entity, EIF has a lower cost of capital to fund expansion pro.

jects than the parent company, Vern Yu, Enbridge's vice-president of corporate development, said in an interview.

"That's allowing us to finance our growth projects at a lower cost of equity, which translates into improved shareholder returns for Enbridge Inc.," Mr. Yu said.

"By shifting that equity need from Enbridge Inc. to Enbridge Income Fund, it also allows us to increase the dividend at Enbridge Inc."

Under the plan, EIF will issue $400-million to $800-million of equity each year.

Enbridge (ENB) Close: $60.04, up $5.61

Track trouble
Oil's fall puts a damper on crude-by-rail ambitions
Wednesday, December 3, 2014 – Print Edition, Page B1

The plunge in oil prices is expected to dampen the rise in moving crude by rail, a fast-growing segment that sprang up amid a shortage of pipeline capacity and $100 oil.

As oil touched $66.88 (U.S.) a barrel Tuesday, the economics of moving oil to market by train become less appealing to producers, and railways face slower growth in the lucrative segment.

Share prices for Canadian Pacific Railway Ltd. and Canadian National Railway Co. have fallen by 8 per cent and 7 per cent, respectively, over the past five trading days as investors weighed the prospect that rail companies would see a decline in oil volumes as producers either scale back production or balk at paying the $15 to $20 premium to ship a barrel of oil by rail.

Walter Spracklin, a Royal Bank of Canada equities analyst, said CP is more exposed to any drop in oil prices than rival CN, given the Calgary-based company's focus on the high-cost Bakken shale region of North Dakota, Montana and Saskatchewan.

With production costs estimated to be just under $60 a barrel, Bakken-oil output could slow if low prices persist.

According to the North Dakota Pipeline Authority, 59 per cent of the state's oil production moved by rail in September, compared with 35 per cent by pipeline.

CP's $354-million in crudeby-rail revenue for the first three quarters of 2014 accounts for just 7 per cent of total sales, but represents a 33-per-cent rise over the same period a year earlier. CP has said it expects to double the number of oil tank cars it hauls to about 200,000 by next year amid a shortage of pipeline capacity.

Railways say they can help oil producers fetch better prices for their product by reaching more markets than pipelines. And as approvals for major pipeline projects, including TransCanada Corp.'s Keystone XL, remain stuck in political limbo, rail companies have picked up some of the excess production.

CN does not break out its oil revenue, which is believed to be a smaller share of the total than that of CP. Crude shipments are lumped in with chemicals and other petroleum products, to account for 20 per cent of sales. Mr. Spracklin said CN has an edge over CP because the Montreal-based carrier is focused on Western Canadian crude, a heavy variety whose producers are less affected by the plunge due to often lower production costs.

According to RBC's yearly survey of rail shippers, overall freight volumes are expected to rise by up to 5 per cent in 2015, a sign of confidence in the economy even as oil prices plunge.

The survey also found more than half of the shippers expected rail rates to increase by 4 per cent to 6 per cent next year, an increase that bodes well for the rail companies as they try to boost revenues and hit higher targets.

Fadi Chamoun, an equities analyst with Bank of Montreal, said he believes Western Canada's production of crude, which has been the main source of growth for railways, will not slow as prices drop. He expects railways will move the expanded output over the next two years, and that pipeline capacity will remain limited "until 2018 or later."

But if drillers in the Bakken region reduce production, Mr. Chamoun said railways should expect a decline in the booming business of hauling frac sand, which is injected into shale rock with fluid to release petroleum. It takes about 100 rail cars of frac sand to drill one well, said Mr. Chamoun.

Canadian Pacific Railway (CP) Close: $220.51, up $7.83 Canadian National Railway (CNR) Close: $78.23, up $1.14

Associated Graphic

A train hauling oil rolls along in North Dakota's Bakken region. Falling oil prices are hurting prospects for railways.


Moses Znaimer in talks to buy Sun News Network
Thursday, December 11, 2014 – Print Edition, Page B1

Television entrepreneur Moses Znaimer is hoping to expand his reach on the TV dial by acquiring the money-losing Sun News Network from Quebecor Inc.

According to a source familiar with the negotiations, Mr. Znaimer is eager to make a deal that would see ZoomerMedia Ltd., a company he controls, buy the news and opinion channel before the year is over. Mr. Znaimer currently has exclusive negotiating rights, and the price of the purchase would be low, the source said.

Once the architect of CITY-TV, Mr. Znaimer now owns a stable of TV, radio and other media properties targeting an audience aged 45 and older - what ZoomerMedia calls "the world's largest and most affluent generation." Buying the Sun network would give him another foothold in television.

Mr. Znaimer did not return e-mails requesting comment, and a member of his staff said "No comment" when reached by phone.

Quebecor's vice-president of public affairs, Martin Tremblay, also declined to discuss any potential sale. "We have a policy to not comment on rumours concerning our mix of assets," he said.

ZoomerMedia's flagship channel is VisionTV, but its also owns One: Body, Mind and Spirit, JoyTV and HopeTV, as well as the Classical 96.3 FM radio station and other media assets.

Sources said Mr. Znaimer appears to want to return to his roots, rebooting in some fashion the CITY-TV model that made him a household name in Canadian television.

Part of Sun News Network's appeal is that it has a Category C broadcasting license, which means all TV distributors must offer the channel to customers, both on a standalone basis and in bundles of news channels, thanks to new rules set late last year by the Canadian Radio-television and Telecommunications Commission (CRTC).

ZoomerMedia would have to maintain the channel as a national news outlet, or risk losing that privilege by applying to change the terms of the license.

As it stands, only 10 per cent of the channel's monthly programming can be in a genre other than news.

Sun News Network's future has been in question since early October, when Postmedia Network Canada Corp. announced it was buying the Sun chain of newspapers from Quebecor as part of a $316-million deal.

The Sun TV network had drawn on the Sun papers' resources for editorial content.

At the time, Postmedia president and CEO Paul Godfrey said his company hadn't considered Sun News Network as part of the purchase because "it wasn't for sale."

He said Postmedia would license the Sun name to the channel for one year.

Even before the Postmedia-Sun Media deal, however, Sun News Network had struggled financially.

The channel launched in 2011 and its outspoken, opinionated slant has drawn numerous complaints from viewers and rebukes from regulators, often over segments and on-air slurs by Ezra Levant, one of its most recognizable hosts.

Over the next three years, it posted losses of $46.7-million, according to CRTC figures, losing $14.8-million in 2013, when the channel generated less than $8-million in revenue from 4.8 million subscribers.

Over the past year, Quebecor has reshuffled its media assets with the Postmedia deal, which is still awaiting regulatory approval, and a separate sale of 74 community newspapers to Transcontinental Inc.

In November, Quebecor also bought 15 magazines from Transcontinental, including The Hockey News and Canadian Living.

Mr. Znaimer controls 64.3 per cent of ZoomerMedia's common shares through a company he owns called Olympus Management Ltd. Fairfax Financial Holdings Ltd. holds 26.9 per cent of common shares through a subsidiary, and the remainder are widely held.

Quebecor (QBR.B) Close: $31.25, down 19¢

Associated Graphic

Moses Znaimer

Pushing Pacers aside offers little insight
With the 17-6 Raptors now evaluating what it takes to really make it, brushing off a bottom feeder only complicates things
Saturday, December 13, 2014 – Print Edition, Page S5


Four months ago, the Toronto Raptors were comfortably engaged in future mode.

Team executives knew they'd be good. They felt sure they'd win the Atlantic, and thought they had a decent shot at taking a playoff round. But that was the reasonable limit of their aspiration.

In terms of "windows," they believed their championship slot would open in 2016, with the hoped-for arrival of free agent Kevin Durant. The team's emo mascot, Drake, was out there flirting madly on that front.

In the NBA, tampering is a pervasive, private affair. But Drake is incapable of non-public acts. The league threatened the team. The team shrugged. For the first time ever, it all seemed so fun and simple.

Things are getting complicated now.

The 17-6 Raptors are moving beyond their "Wait, we're really good' moment into the, 'How good are we, really?" stage.

If the answer is, "A whole lot better than we expected," what do they do about that?

That evaluative process is not being helped by the likes of Indiana. The Pacers arrived in Toronto Friday night for a game they mistook for a very confusing practice. Without injured star Paul George, Indiana is a bunch of guys who play NBA basketball but haven't figured out how to play it together.

The Raptors continued to ride their new redoubtables - the surprisingly effective Jonas Valanciunas and the dead-eye shooting of Lou Williams.

Valanciunas has been sporadically excellent this season, but the team's braintrust still doesn't believe he's the sort of centre you can ride through a playoff series.

A team like Chicago would design all their tactics to go through a Valanciunas-sized hole in the Raptors' mid-section.

Williams is in the midst of an unending series of heat checks. In the second quarter, he mishandled a long pass, corralled it, wandered aimlessly into the corner with a man draped all over him and tried a stupid three - just because. Of course, he made it.

Williams could be the first guy to win the NBA's Sixth Man of the Year Award for playing an entire season of HORSE.

Despite the fact that no starter scored more than 10 points, Toronto bulldozed Indiana 10694.

The Raptors arrived with real questions about their rear guard.

They've been fading toward the bottom of the league in terms of defensive efficiency and rebounding. They held Indiana to 41-percent shooting and outrebounded them 52-39. Is that a significant improvement? Or, put another way, should it be regarded as such, considering the team they managed it against?

It'll go on like this for a while.

The Raptors next five games are against teams with a cumulative record of 24-66.

It's a nice ego boost, but it tends to obscure an honest appraisal of their quality. DeMar DeRozan's absence with a groin tear makes that job even harder.

You know Kyle Lowry is going to be an animal in the playoffs.

Beyond that, you're not sure of much.

Players like Valanciunas and Williams are tending to make this team special right now. They're also confusing the hell out of everything.

Because if you believe that what they're doing is sustainable, than this team is shifting philosophically from a next-year-or-beyond mindset into a we-can-win-rightnow frame.

Waiting for 2016 already seems like a poverty of ambition. The odds of getting Durant fade daily (he's either going to stay in Oklahoma, or end up in Washington - mark it down.)

A player that increasingly intrigues Raptors management is Memphis centre Marc Gasol.

The Spaniard is a free agent this summer. The greatest lack on the Raptors roster is a truly dominant big man. Gasol is a Jungian figure that features prominently in general manager Masai Ujiri's bedside dream diary.

Gasol, 29, has good fiduciary and competitive reasons to stay where he is, but it's still the Western Conference. He might be great for five or six more years and never make it past the second round of the playoffs. Maybe Gasol can be convinced that he should take a free-agent discount in order to ride roughshod over the Eastern Conference for the foreseeable future.

However that pursuit shakes out, you still need to tighten the focus.

The Raptors know their main bigs - Valanciunas, Amir Johnson, Patrick Patterson and James Johnson - are good, but not good enough to go deep. Valanciunas is too fragile; Amir Johnson is fragile in a different way, and James Johnson comes and goes. Only Patterson can be said to fit perfectly in his (limited) role.

So do you go out and overpay for a large, human rental to toughen up that core? Indiana's David West is that sort of player.

So are Sacramento's Reggie Evans or Denver's Timofey Mozgov.

There are a bunch of these sorts of guys in the NBA - second-tier veterans who can add spine to a team that already has finesse.

But those sorts of players are going to cost you - either in expiring contracts that you'd hoped to hold on to in order to provide cap flexibility, or young talent.

There's also the chemistry consideration. You don't often find players like Tyler Hansbrough, ones who are happy plugging away on measly minutes during a contract year. Do you want to replace Hansbrough with someone who might not adjust so neatly to a bit part on a very tight team? Sometimes, an isolated improvement can lead to an aggregate decline.

The safe thing to do is nothing. It's actually a pretty good rule for life as well as basketball. The team's winning and the fanbase is euphoric. Why take chances?

But Ujiri has already proved that he's willing to take calculated risks from a position of strength.

While it's hard to precisely gauge his position, his leverage is practically unlimited.

Follow me on Twitter:@cathalkelly

Associated Graphic

Toronto Raptors centre Jonas Valanciunas, left, eyes the ball next to Indiana Pacers centre Roy Hibbert during their NBA game at the Air Canada Centre in Toronto on Friday.


Monday, December 15, 2014 – Print Edition, Page S2

Orchard Park, N.Y., Indianapolis, San Diego, Baltimore, Charlotte, N.C., Kansas City, East Rutherford, N.J., Detroit, Seattle, Nashville -- Bills 21, Packers 13

Bacarri Rambo intercepted two Aaron Rodgers passes and Marcus Thigpen scored on a 75-yard punt return. Defensive end Mario Williams also forced Rodgers to fumble, which led to running back Eddie Lacy being tackled in the end zone for a safety with 1:51 left. Dan Carpenter hit all three field-goal attempts, including a 51-yarder in the second half to help keep Buffalo (8-6) in the AFC playoff picture. The Bills were also have their first eightwin season since going 9-7 in 2004. The Packers (10-4) had a five-game win streak snapped.

Colts 17, Texans 10

Andrew Luck threw two touchdown passes and the Colts won their second straight AFC South title. Indianapolis (10-4) has won four straight. It sure wasn't easy. Luck was 18 of 34 with 187 yards and one interception on the same day Reggie Wayne passed Peyton Manning for the most games and wins in franchise history. Wayne has played in 209 games, winning 142.

Broncos 22, Chargers 10

Peyton Manning played through a thigh injury and flu-like symptoms and Connor Barth kicked five field goals to lead Denver over San Diego to give the Broncos their fourth straight AFC West title. Manning came out of the game late in the second quarter. He apparently hurt his thigh while blocking linebacker Donald Butler on a run by C.J. Anderson. He returned for the start of the third quarter and on Denver's second possession threw a 28-yard touchdown pass to Demaryius Thomas to give the Broncos a 16-3 lead. The Broncos (11-3) won their fourth straight game. Denver's 12th straight division road win tied San Francisco's NFL record set from 1987-90.

Ravens 20, Jaguars 12

The Ravens sacked rookie Blake Bortles eight times and returned a blocked punt for a touchdown. Baltimore (9-5) gained only 31 yards rushing through three quarters and scored just once with its offence on the field. But the defence was solid, and special teams helped the Ravens stay in the thick of the AFC playoff chase.

Panthers 19, Buccaneers 17

Derek Anderson threw for 277 yards and a touchdown, Graham Gano kicked four field goals and the Panthers improved their chances in the NFC South playoff race. The win, coupled with Atlanta's loss to Pittsburgh, left the Panthers a half game behind New Orleans in the division. Carolina (5-8-1) can move into first place if the Saints lose to Chicago on Monday night. Anderson was 25 of 40 and improved to 2-0 as a starter in place of Cam Newton, sidelined while recovering from a car accident Tuesday that left him with two fractures in his lower back.

Chiefs 31, Raiders 13

Alex Smith threw for 297 yards and two scores, while Kansas City shut down Derek Carr and the Oakland offence. Knile Davis had touchdowns running and receiving, and De'Anthony Thomas returned a punt 81 yards for another score as the Chiefs (8-6) got even for a 24-20 loss to Oakland (2-12) last month. Carr finished 27 of 56 for 222 yards, throwing a TD pass in the final minute.

Giants 24, Redskins 13

Eli Manning threw three touchdown passes to rookie Odell Beckham Jr. and the Giants took advantage of an overturned touchdown at the end of the half. Manning and Beckham combined 12 times for 143 yards, with touchdown passes covering 10, 35 and six yards. The win was the second straight for the Giants (5-9) after seven consecutive losses.

Lions 16, Vikings 14

Matt Prater's 33-yard field goal with 3:38 remaining lifted Detroit over the Minnesota, pulling the Lions into a tie for first place in the NFC North. The Lions (10-4) are now even atop the division with Green Bay, which lost to Buffalo, but Detroit didn't have an easy time, spotting the Vikings (6-8) a 14-0 lead before a pair of second-quarter interceptions helped the Lions start their rally.

Seahawks 17, 49ers 7

Marshawn Lynch rushed for 91 yards and a touchdown, Russell Wilson threw a touchdown pass to rookie Paul Richardson and the Seattle Seahawks knocked archrival San Francisco from playoff contention 17-7 Sunday. The defending Super Bowl champions remained in contention for a division title and No. 1 seed in the NFC. After a sluggish, sloppy first half, Seattle (10-4) awoke in the final 30 minutes behind the running of Lynch and a defence that shut out the 49ers, holding them to 67 yards.

Jets 16, Titans 11

Chris Ivory scored on a one-yard touchdown run with 3:09 left, and New York beat Tennessee in a game marked by a brawl between teams playing only for pride with the loser hoping for better draft position. The Jets (3-11) got their first road win this season in the first NFL game to end with a 16-11 score. They also snapped a three-game skid. Geno Smith threw for 179 yards and a TD. He also was apparently hit by Titans defensive tackle Jurrell Casey, starting a brawl in the third quarter. Casey was flagged, but not ejected. The Titans (2-12) now have lost eight straight.

Something like a phenomenon
Connor McDavid won't be drafted into the NHL until next June, but his hotly anticipated pro career effectively begins this month
Friday, December 12, 2014 – Print Edition, Page S3


Having accustomed ourselves to the idea that Connor McDavid is the future of Canadian hockey, it's a little jarring to see him here acting as its present.

Not least for the player himself.

A month ago, McDavid broke his right hand in an OHL fight. It was the first real brawl of his career. He was told he would miss four to six weeks.

On Tuesday, a couple of days short of the minimum recovery time, McDavid had the cast removed.

He practised on Thursday evening at the beginning of the team's evaluation camp, on a contact restriction. Team Canada hopes to involve him in at least one of four planned exhibition games. Whether that happens or not, they don't seem too bothered.

"It would be nice," coach Benoit Groulx shrugged. "The most important thing is to have him for the competition ... There's no rush. We're happy to have him here."

For most of these kids, it's a working interview. For McDavid, it's a working holiday.

We've all agreed that Canada is going to have to win this thing sooner or later. After a five-year skid, the country has moved beyond the usual panic into ruminative patience.

"What I've noticed is that people still believe in their team," said Groulx.

Maybe Canada has entered the "England Football" stage of its hockey development - we no longer need to win anything in order to feel absolutely sure we're still the best.

It would be nice for the breakthrough to happen at home. It's going to happen eventually. It's a hell of a lot more likely to happen with McDavid, the best young player on the planet.

So McDavid, 17, was trotted out beforehand to demonstrate his fitness. He had both hands buried deep in his pants pockets. So deep he may have torn out the lining.

Most people warm into interviews. McDavid cools. By the end of six minutes, he was not speaking in a virtual whisper. It was an actual whisper.

If he spoke publicly for an hour, by the end, dogs would not hear what McDavid was saying. His words have only been captured here because of the sensitivity of electronic recording devices.

How excited are you?

"Very excited," McDavid mumbled, not sounding, looking or feeling excited.

Can he shoot?

"I can take the full slapshots and all that. The hand feels good.

The wrist is not too stiff at all."

So it's a little stiff. Well, he's got a while to loosen it up.

McDavid's been skating for three weeks. He says his lower half is feeling fitter and firmer than it did before he was injured.

He bridled only once, when it was suggested that his enforced absence was "time off."

"Well, I wasn't exactly taking it too easy with the cast on," he said, his voice rising to a level where you might be able to hear it if you were sitting in his lap. "I was shooting a little bit with the cast on. Yeah, it was nice to finally get the cast off."

By the end, he was back down to volumes that can only be perceived by animals that operate via sonar.

In this country, we've obsessed over this kid for ages - since he was granted exceptional status as a 15-year-old OHL draftee. He's become that generational article of faith - the future Greatest Player in the World. Canada can live without a few world junior golds. It cannot abide the idea that the very best might not have been born in a six-digit postal code.

We've spent a lot of that time averting our collective gaze, so as not to spook him.

That ends in Toronto this week.

This is the point at which McDavid fully arrives as a phenomenon. He won't be drafted into the NHL for six more months. But his effective time as a professional begins in Toronto and Montreal right now.

You fear for him, just a little bit.

I spent some time with him in Erie last month. One on one, he's marvellous - still very quiet, but sharp and confident. He is the very definition of an old soul.

But this is where, really for the first time, he becomes public property. From now until his career ends in 10 or 15 or 20 years, McDavid is going to have to do this sort of thing every night.

He'll figure it out. He's that sort of kid. But if he's going to survive it, he's also going to have to find some way to enjoy it.

He can play in the NHL. His work ethic is famously unparalleled. Five minutes spent watching him is proof of that.

But can he be the star that people will want him to be? Can he evolve into the role of a star not just on the ice but off it?

That's next on Connor McDavid's impressive professional todo list.

Follow me on Twitter:@CathalKelly

Associated Graphic

Connor McDavid takes part in Team Canada's selection camp in Toronto on Thursday.


Will Beeston's exit come sooner than expected?
Tuesday, December 9, 2014 – Print Edition, Page S1

TORONTO -- Paul Beeston, one of the country's top sports executives, and by the measure of championships the most successful, was not acting like a man with one foot out the door.

The 69-year-old Toronto Blue Jays president and chief executive officer greeted a visitor to his third-floor office at Rogers Centre last week at the reception desk, far more concerned about the erratic behaviour of his iPhone 4 than his future with a baseball team that has failed to live up to expectations in recent seasons.

Contrary to folklore, Beeston does carry a mobile phone; he just doesn't like to tell anyone. Rumour has it that Beeston won't give out the number because he doesn't know it.

"There's no question, I am some type of a geek," Beeston freely - and proudly - admitted.

A slightly bemused employee from technical support, whom Beeston introduced as the most important person in the Blue Jays' empire at that moment, trailed behind the CEO.

When the device suddenly chirped to signal an incoming call, Beeston turned to the tech person. "Just make it sound like a phone," he implored. When the "old phone" ringer was activated, Beeston asked the employee to wait as he dialled his mobile from his office land line just to make sure. It worked.

"Take the rest of the day off, the rest of the week," Beeston cackled.

If only every crisis could be handled with such ease.

The latest upheaval facing Beeston surfaced late Sunday, with multiple media reports that club owner Rogers Communications Inc. is hunting for a new CEO to head up baseball operations. Baltimore Orioles vice-president Dan Duquette and Chicago White Sox vice-president Kenny Williams are two baseball executives whom the Blue Jays are said to have targeted as possible Beeston replacements.

"I've got nothing to report - zero," came Beeston's response on Monday when asked if he could comment on the validity of the reports.

When it was mentioned to Beeston that some are saying he is on his way out, he said: "Why am I leaving? I'm leaving for lunch."

The fact that Beeston, who was the first employee the Blue Jays hired back in 1976, has an exit plan from Toronto is one of the worst-kept secrets within the Rogers conglomerate. His current contract concluded at the end of the 2014 Major League Baseball season.

Club insiders will tell you that the man who helped steer the club to back-to-back World Series championships in 1992 and 1993 has agreed to steward the club for one more year and then get out of Dodge. So the idea that Rogers has started a process to identify a replacement for Beeston should not come as a surprise.

That the news leaked so early raises the possibility that Beeston's exit could come sooner than the end of 2015.

A Rogers official indicated Monday in an e-mail that the company would not offer any comment on the matter.

During a sit-down interview last week at his austere office at Rogers Centre, where his window shows a view of a parking lot, a relaxed Beeston provided no clues that a departure was imminent.

With an unlit cigar resting on the arm of an easy chair and his feet perched on a table, Beeston talked about the team and his plans for spring training in Florida with the Blue Jays in February.

Most of the Blue Jays' spring training contingent lives in condominiums at a swank resort in Palm Harbor during their stay in Florida. Beeston will check in, as he he usually does, at a chain motel in Dunedin, an easy stroll to the Florida Auto Exchange Stadium where the Blue Jays play their spring home games, a walk that allows him to enjoy a lit cigar.

Meanwhile, after being identified in reports as one of the Jays' targets, Williams spoke to reporters in San Diego on Monday at the start of baseball's annual winter meetings. He said Chicago owner Jerry Reinsdorf told him that now would not be the right time for him to pursue an opening with another team.

"As anybody would, you would want to try to flush out and see what the possibilities are for you, your life, your family and all the other things," Williams told reporters. "There's a time and a place for it. Right now, Jerry felt that this wasn't the time or the place. I completely get that and support that."

Associated Graphic

Paul Beeston

Depleted Manchester City faces tough test
English champions must beat Roma in final group-stage match to keep alive chance of qualifying for tournament's knockout stage
The Associated Press
Wednesday, December 10, 2014 – Print Edition, Page S3

ROME -- English champion Manchester City faces several challenges Wednesday when it strives to reach the knockout phase of the Champions League.

Seeking to avoid a group stage exit for the second time in three seasons, City's injury- and suspension-hit team needs at least a point against Roma at Stadio Olimpico and some assistance from already-qualified Bayern Munich in the other Group E match.

Manager Manuel Pellegrini's squad could be without arguably its best four players.

Star midfielder Yaya Touré is suspended, top scorer Sergio Aguero is out with a serious knee injury, sustained on Saturday, and playmaker David Silva and captain Vincent Kompany are major injury doubts.

Bayern has won the group with 12 points while the other three clubs have five points each.

Roma can advance with a win, while CSKA Moscow needs a firstever victory in Germany, plus a draw, or a City win, in the other match. If City loses, it will finish last and fail to qualify for the Europa League.

Here are some more things to know about Wednesday's matches: .

Veteran expertise

Roma is still feeling the psychological impact of its 7-1 home thrashing by Bayern, but has maintained second place in Serie A, relying on veterans such as 38year-old captain Francesco Totti and 33-year-old right back Maicon.

Maicon had an unimpressive stay at City in 2012-13, when he was slowed by injury, but has returned to form with the Giallorossi this season and last - and was one of the bright spots for Brazil at the World Cup.

"I would love to have his charisma and acceleration," said Roma winger Alessandro Florenzi, who filled in at fullback when Maicon was rested during a draw against Sassuolo at the weekend.

"He's a player who creates fear for the opponent even if he's at 50 per cent. And he settles the club down."

Maicon has been one of the few bright spots in a Roma defence that was torn apart in the thrashing by Bayern in October.

Roma forwards Gervinho and Miralem Pjanic are expected to play despite minor injuries.

Absent Aguero

Manager Manuel Pellegrini has admitted Aguero's absence in Italy is a monumental blow.

The Argentina international scored a hat trick to propel City to a 3-2 victory against Bayern Munich two weeks ago.

"Sergio was in a very good moment and he is a decisive player for our team," Pellegrini said after Saturday's 1-0 win against Everton. "It is impossible in this moment to know how long Sergio will be out. It is very difficult when you have a problem with your ligament to recover in three days. I always say this team is not just about Aguero."

Christmas party

Bayern is already qualified and sure to win the group, but the team wants to give its fans something extra ahead of Christmas.

"There will be a lot of people in the stadium and we want to make them happy," midfielder Sebastian Rode said. "That's our job."

Rode also promised Bayern would not take the match lightly.

"The fans want to see a proper match," he said.

Rode joined Bayern this summer from Eintracht Frankfurt. He was not given much hope of making an impact in the star-studded squad, but has been something of a revelation. Rode was responsible for turning around the match in the 1-0 win over Bayer Leverkusen last weekend.

"The coach has made it clear he values me from the very first day and the best evidence of that is the increasing amount of playing time I'm getting," he said. "I know I did everything right by joining Bayern and I've already learned a huge amount from my teammates and the coach, but I want more."

Familiar opponents

This will be the fourth meeting in little more than a year between Bayern and CSKA.

Bayern won 3-0 and 3-1 in last season's group stage and won 1-0 in Moscow in September, courtesy of a first-half penalty from Thomas Mueller.

Associated Graphic

Manchester City midfielder Samir Nasri, left, and French defender Bacary Sagna, second from left, attend a training session in Manchester on Tuesday. With star midfielder Yaya Touré absent due to suspension, the team faces Roma in a crucial match on Wednesday.


Hamilton's good fortune at Tim Hortons Field continues as Banks returns two punts for touchdowns to lead the Tiger-Cats to the Grey Cup for the second year in a row
Monday, November 24, 2014 – Print Edition, Page S1

HAMILTON -- The Hamilton Tiger-Cats had a shaky start to the 2014 season: just a single victory in their first seven games, their new quarterback sidelined with a concussion and their move into a new stadium muddled up by construction delays. After a dramatic season turnaround, the Ticats are now headed to play for the Grey Cup.

Sunday in Hamilton, before a sold-out crowd inside a new stadium where they've gone undefeated since the grand opening on Labour Day, the Cats beat the Montreal Alouettes 40-24 in the East Division final. It's the second consecutive trip to the CFL's championship game for the Tabbies, a contest that takes place next Sunday in Vancouver.

Behind a record-breaking day by speedy punt returner Brandon Banks, a pair of short touchdown runs by Nic Grigsby, and a turnover-happy defence, the Ticats beat the Als for a second time in 14 days. Efficient first-year starting pivot Zach Collaros completed 18 of 27 passes for 199 yards and no picks.

Montreal quarterback Jonathan Crompton made 28 of his 35 passes for 315 yards - including three touchdown passes to S.J Green, who finished the day with six catches for 123 yards.

But the Ticats also intercepted Crompton three times, courtesy of defenders Eric Harris, Courtney Stephen and Delvin Breaux.

Banks took a punt 78 yards to the end zone in the first quarter. But it was called back because of a holding penalty by Neil King, who quickly came to visit Banks on the sideline.

"He didn't apologize; he said we'll get getting another one," said the five-foot-seven 153pound return man, whose nickname is Speedy. "He doesn't need to apologize to me - I know he was working hard. He just told me to keep my head on, because we're going to get another one."

Indeed, they did. Banks went on to return punts of 99 and 88 yards for touchdowns. His second one sealed the game for Hamilton as the sun was peeking out for the first time on what had been an overcast and drizzly day in Steeltown. His five punt returns for 226 yards on the day was a CFL playoff record, besting the 202 yards on two scoring punt returns set by Larry Taylor for Montreal back in 2008.

"On that second return, it was like Casper the Ghost because it was like we were grasping and just getting air," Als coach Tom Higgins said.

Grigsby led all receivers with 18 carries for 93 yards, while Steve Tasker led the Cats' receiving corps with five catches for 80 yards. The Tabbies held star Montreal receiver Duron Carter to three catches for 25 yards, a player who had been uber-confident in the media all week.

It's been just a year since the Ticats lost the 2013 Grey Cup to the Saskatchewan Roughriders and then cut loose veteran quarterback Henry Burris to sign young Collaros. Sunday's game marked the seventh straight win for the Ticats inside their $145.7million new Tim Hortons Field, this one before a booming capacity crowd of 24,334 fans.

Hamilton will attempt to win its first Grey Cup since 1999. This time they won't face a hometown opponent or frostbiteinducing temperatures like last year in Regina.

It's been a winding road for a team that played its early home games at McMaster University this season when their stadium wasn't ready, and lived without a concussed Collaros for five weeks. The black and gold then went on a late-season tear - going 8-2 in their final 10 contests - to earn the Grey Cup berth.

"We're not big on excuses around here," Ticats coach Kent Austin said after the game, still looking around at the details of Tim Hortons Field, pieces of which are still being constructed and fine-tuned. "I look at it from a positive slant. Those things we faced may have actually helped us grow and helped us learn to win."

Associated Graphic

The Hamilton Tiger-Cats celebrate after defeating the Montreal Alouettes in the CFL's East Division final in Hamilton on Sunday.


Ticats QB Zach Collaros, centre, was manhandled by the Als' defence on this play, but finished with 199 yards passing.


McDavid practises with Team Canada
Five weeks after injuring his hand, the 17-year-old centre is cleared for contact and has been taking full slap shots since last week
The Canadian Press
Tuesday, December 16, 2014 – Print Edition, Page S3

Connor McDavid shrugged off the latest sign of progress in his return from a broken bone in his right hand.

The junior hockey star has been cleared for contact and has started practising with the rest of his Canadian world junior teammates. That came as no surprise to McDavid, who expected to be at this point in his recovery all along.

"It's kind of been the plan for a while now," McDavid said. "The last checkup was a couple Tuesdays ago, and that's kind of been the plan from Day One was to start contact on this date. Just kind of following the plan."

The plan has McDavid on track to be healthy and ready to go when Canada opens the tournament Dec. 26 in Montreal against Slovakia. But shedding the yellow no-contact jersey and getting through a full practice was an important step toward that goal.

McDavid did that Monday at Meridian Centre on the first day of Canada's main training camp.

Like McDavid, coach Benoît Groulx knew it was coming, and he knew what to look for in the 17-year-old's progress.

"How did they feel? Do they look confident on the ice when they skate, do they have poise with the puck, do they seem to have chemistry out there?" Groulx said. "When you look at Connor today, I thought he had all that, and it is good to see that."

McDavid reported no problems with his hand, as expected. The Erie Otters star and projected No. 1 pick in next year's NHL draft was able to take full slap shots last week.

On Nov. 11, McDavid broke the fifth metacarpal in his right hand when it struck the top of the boards during a fight with Bryson Cianfrone of the Mississauga Steelheads. A specialist he saw the next day in Toronto estimated McDavid would miss five to six weeks.

The five-week mark is Tuesday, and McDavid still has a few more practices he can go through before worrying about playing in a game. Canada has three international exhibitions: Friday against Russia in Toronto; Sunday against Sweden in Ottawa; and Dec. 23 against Switzerland in Montreal.

McDavid said he's still hoping to get into one or two of those exhibition games. The only hindrance to that at this point is getting timing back on the ice.

"I've been almost bag-skating for three weeks. My legs feel great, the legs aren't too much of an issue at all," McDavid said.

"Obviously, still getting the hands back is coming along, getting a little better. The only thing that's going to come is timing. The only way to do that is through competition and through contact and all that."

McDavid appeared to fit in seamlessly in Canada's camp lineup Monday, skating between Nic Petan and Robby Fabbri on the second line. Sam Reinhart centred the veteran first line between Max Domi and Anthony Duclair.

It was to be expected that teammates would hold back a little from McDavid in his first full practice, though the Newmarket, Ont., native said "they don't have to." Groulx didn't see players letting up.

"At first, I think when they see him, they want to make sure that they don't hit him on his glove," Groulx said. "You know it's there, so they've got to be careful. But over all, I think guys went pretty hard today."

McDavid, who wore a full cage and a white No. 17 jersey, has a few days to test his hand and get into game shape. Groulx said he didn't know if McDavid would play Friday against Russia at Air Canada Centre.

"We're not there yet," Groulx said. "Our focus is to prepare our team, go through our systems, lines, see how it works during practices. We will see how it plays out. We are not building our lineup for Friday yet."

Associated Graphic

Connor McDavid falls after getting dumped by Darnell Nurse during practice in St. Catharines, Ont., on Monday. McDavid hopes to play an exhibition game or two before the world juniors start Dec. 26.


Banged-up Cardinals in tough spot against a young, scary St. Louis defence
The Associated Press
Thursday, December 11, 2014 – Print Edition, Page S2

Even as the Arizona Cardinals are presented an opportunity to clinch a playoff berth, they have plenty to be concerned about.

Injuries, for one: No contender has been more damaged than Arizona. It's somewhat astonishing that they not only lead the NFC West, but could grab a wildcard spot with a victory at St.

Louis on Thursday.

Much easier said than done.

The Rams come off consecutive shutouts - yes, they were against Oakland and Washington. Still, St. Louis is not a team anyone wants any part of right now.

Particularly the defence.

"They've always been as good a front four as anybody in the league and you're watching them jell and become an outstanding defence," Cardinals coach Bruce Arians says.

Preparation is at a premium for a short week, but neither is a fancy team with a lot of tricks. Most important is keeping your own house in order, according to Rams coach Jeff Fisher.

"I'm fine with a Thursday night game. It's just getting to Thursday night, which is the challenge as coaches," he says.

Despite their records, the Rams (6-7, No. 19 in AP Pro32) are 31/2-point favourites over the Cardinals (10-3, No. 6 AP Pro32)

On a full week, with a healthier roster, the pick would be Arizona. That's not the situation at all, so ... RAMS, 17-16

No. 12 Cincinnati (pick 'em) at No. 20 Cleveland Johnny Football starts with loss.BENGALS, 20-14

No. 22 Minnesota (plus 71/2) at No. 8 Detroit Lions inch closer to postseason. LIONS, 26-17

No. 31 New York Jets (minus 1) at No. 32 Tennessee Loser might earn No. 1 overall draft pick, as well as bottom spot in power rankings. That would be J-E-T-S. UPSET SPECIAL: TITANS, 16-13

No. 18 San Francisco (plus 91/2) at No. 3 Seattle Not nearly the once-anticipated showdown it was. Niners keep it close. SEAHAWKS, 23-17

No. 16 (tie) Miami (plus 71/2) at No. 2 New England Patriots clinch division with win. BEST BET on it. BEST BET: PATRIOTS, 31-10

No. 4 Denver (minus 4) at No. 13 San Diego Like Patriots, Broncos take care of their division. BRONCOS, 27-21

No. 15 Houston (plus 61/2) at No. 7 Indianapolis Ditto for Colts, albeit in a close one. COLTS, 30-27

No. 1 Green Bay (minus 5) at No. 16 (tie) Buffalo Packers could be playoff-bound by end of Sunday's action. PACKERS, 24-20

No. 11 Pittsburgh (minus 2) at No. 23 Atlanta Can banged-up Falcons lose their way into playoffs? STEELERS, 23-20

No. 9 Dallas (minus 31/2) at No. 5 Philadelphia Still very anticipated. Eagles finish off sweep of Cowboys. EAGLES, 30-23

No. 30 Washington (plus 61/2) at No. 26 New York Giants Not at all anticipated. GIANTS, 31-20

No. 29 Jacksonville (plus 131/2) at No. 10 Baltimore Ravens might steal AFC North. RAVENS, 28-13

No. 27 Oakland (plus 101/2) at No. 14 Kansas City Previous loss to Raiders ruined KC's season. Won't be a repeat. CHIEFS, 17-14

No. 24 New Orleans (minus 3) at No. 25 Chicago, Monday night Any good hockey on TV Monday? SAINTS, 27-26

No. 28 Tampa Bay (OFF) at No. 21 Carolina Cam Newton's uncertain availability eliminates betting line. BUCCANEERS, 16-13

2014 record: Against spread: This week (10-5-1); Season (100-100-5).

Straight up: This week (12-4); Season (137-69-1)

Best Bet: 5-9 against spread, 8-6 straight up.

Upset special: 7-7 against spread, 5-9 straight up.

Associated Graphic

The Cardinals (10-3) may be leading the NFC West, but it's doubtful they'll be celebrating after Thursday's game.


Raptors host all-star benefit to celebrate life of Nelson Mandela
The Canadian Press
Friday, December 5, 2014 – Print Edition, Page S2

TORONTO -- Masai Ujiri remembers being a boy attending a basketball camp in his native northern Nigeria, and the excitement of being given an Hakeem Olajuwon T-shirt.

It was a small gesture with a big impact. "My eyes were so wide, to get that T-shirt was unbelievable," Ujiri said.

Ujiri speaks passionately about the power of sports to change lives. He's seen it first-hand through his Giants of Africa camp and Basketball Without Borders, and is himself living proof as the president and general manager of the Toronto Raptors.

It's a determination he shared with the late Nelson Mandela, who Ujiri and the Raptors celebrate Friday in an all-star benefit.

"How many people in those kinds of positions ever have any kind of relations with sport in some ways other than being like a guest of honour or something?" Ujiri said Thursday.

When South Africa won the 1995 Rugby World Cup, Mandela famously donned the Springbok sweater, a gesture he hoped would help unite his racially fragmented country.

Friday marks the one-year anniversary since Mandela's death at the age of 95.

Ujiri has assembled an all-star lineup for the event, including NBA legends Charles Barkley, Magic Johnson and Dikembe Mutombo, along with UN Goodwill Ambassador and 1999 Miss Universe winner Mpule Kwelagobe. Other guests include Raptors alumnus Tracy McGrady, Maple Leaf goaltender Jonathan Bernier and president Brendan Shanahan, former Toronto Argos star Michael (Pinball) Clemons, deputy commissioner of the NBA Mark Tatum and Amadou Fall, vice-president of NBA Africa.

Funds raised will go to both the Nelson Mandela Foundation and Ujiri's Giants of Africa.

The 6-foot-4 Ujiri played basketball in the United States at Bismarck State College, and then spent six years playing in Europe. He chiselled out a post-playing career, working as an unpaid scout for the Magic. He paid his own way on trips at times, and bunked with other scouts and players. He went on to be an international scout for Denver and Toronto, then won NBA executive of the year in 2013 with Denver, where he was the first Africanborn GM of a major North American sports team. He returned to Toronto to be the team's president and GM in 2013.

A big believer in never forgetting where you've come from, Ujiri said his experiences in Africa remain with him in his daily work back in Toronto with the Raptors.

"Honestly, it puts things in perspective," he said. "We take things for granted a lot of times, and I would never forget to be humbled by the position that I am in, and the blessings that I have to be in this position, with such good people around me that give me that opportunity to go help other Africans, and other youth."

Associated Graphic

Masai Ujiri

St. Louis signs Brodeur to one-year deal
The Associated Press
Wednesday, December 3, 2014 – Print Edition, Page S2

ST. LOUIS -- Martin Brodeur wanted to keep playing and the St. Louis Blues needed some help in net.

So one of the best goalies in league history will stick around for at least one more season.

The Blues signed the 42-yearold Brodeur to a one-year contract, picking up the NHL's leader in games, wins and shutouts while Brian Elliott is out with a knee injury. Coach Ken Hitchcock has said Elliott is week to week.

Brodeur joined St. Louis late last week and participated in his first full practice on Monday. He played 21 seasons for the New Jersey Devils, leading them to three Stanley Cups, and had been looking to resume his career since the off-season.

Brodeur said he knew before practice Tuesday that he'd be signing.

"I've been waiting for a great opportunity and it came from the Blues," Brodeur said. "I feel good in the net."

Elliott is out indefinitely and Brodeur likely will share duties with 24-year-old Jake Allen. Allen is likely to start Wednesday at Chicago and Brodeur is expected to make his Blues debut Thursday at Nashville.

"This is a big change for me," he said. "I spent the last four days enjoying my time here and really putting everything in perspective if I was ready to do this."

Elliott was tied for second in the NHL with a 1.82 goals-against average, going 8-4-1. Allen was 8-2-1 with a 2.16 goals-against average.

New Jersey made Brodeur the 20th pick in the 1990 draft. He won the Calder Memorial Trophy as rookie of the year in 1994, appeared in 10 all-star games and led the NHL in wins nine times, shutouts five times and games played six times. Brodeur is a four-time Vézina Trophy winner, the last time in 2008, and a five-time Jennings Trophy winner, the last time in 2010.

All the views he's fit to print
David Carr, media critic, The New York Times
Saturday, December 13, 2014 – Print Edition, Page B3

NEW YORK -- 'Hey boss." This is the first time I've met David Carr, the weathered and worn, witty and sometimes caustic media critic for The New York Times. But he greets me like an old pal as he slides into a corner table at Casa Nonna, an elegant Italian joint a couple of blocks from the Times where he's welcomed as a regular.

Mr. Carr doesn't do lunch much these days - "it's sort of a lost art for reporters" - but he comes here for the tables, he says, as we settle into "the corner shot," both of us facing out at other diners around us. "It's a good gangster table. You've got your back to the wall.

At least if someone's going to kill you, you know who it is," he says. Mr. Carr is no gangster. Nor is the 58-year-old Minnesota native unfamiliar with drugs, guns or the wrong side of the law. The darker chapters of his life are detailed in his 2008 memoir, The Night of the Gun. In its 385 pages, he reports on his descent into an all-consuming cocaine addiction that derailed his journalism career, left him struggling to care for twin daughters born prematurely to a previous partner amid one of many binges, and ultimately sent him to six months of in-patient rehabilitation.

He has emerged from it all feisty and sober, although a permanent stoop to his body betrays a life lived the hard way. His devotion to his family is evident - wife Jill, daughters Meagan and Erin, 26, and Madeleine, 17 - and he seems to be relishing what might seem an unlikely second chance chronicling the turbulence in his trade from a perch at the world's most renowned newspaper.

We settle on sharing the meatballs and a Caprese salad and order a pasta each as the conversation turns to Mr. Carr's busy schedule, which is about to get busier. It is mid-August when we meet, and he has recently added an endowed professorship at Boston University to his day job at the Times, and will begin teaching his course - on making and distributing content, dubbed "Press Play" - in just a few weeks.

"It's going to be like a bomb going off in the middle of my life. I'm terrified," he says. He's done guest teaching before, "but to take custody of young lives like that is ..." he says, trailing off.

Since the 2011 documentary Page One: Inside The New York Times made Mr. Carr something of a rock star in media circles, he has had no shortage of job offers. But Boston U has an added perk: His youngest daughter Madeleine is to start there as a student.

"It was Jill Abramson" - the newspaper's executive editor, ousted very publicly just three months earlier, who approved the teaching gig because she had taught at Yale, he explains.

When we meet, the dust is still settling after Ms. Abramson's sudden dismissal, and my query about the atmosphere inside the Times newsroom is met, at first, with a long pause.

"Um, one of the primary lessons of being part of The New York Times is the organism supersedes any one individual. So we were taught that lesson anew," he says.

Reports suggested Ms. Abramson had clashed with Times executives, who were concerned about her management style and brusque manner, over hiring decisions and her own pay. Mr. Carr doesn't think most reporters found it hard working under her - "Jill was and is a very good newsman," he says. Rather, it was those working most closely with her who "found it difficult to make a paper in an ongoing way."

That her successor is Dean Baquet - "known far and wide as a great dude and also a great newsman" - has eased the transition. And where Ms. Abramson blazed a trail when she was hired as the Times's first female executive editor in September, 2011, Mr. Baquet is the first black man to hold the top job, "so you pivot from history to history."

Still, the shift in power has strained the newsroom and few people within it had a more uncomfortable seat to survey the fallout than Mr. Carr, who wrote a column likening Ms. Abramson's undoing to "a particularly bloody episode of Game of Thrones."

"It was incredibly unseemly how it all happened," he tells me.

"And it was a very difficult topic to cover from inside the paper."

Mr. Carr would just as soon have kept the topic out of his column, "but we just thought, optically, that would be too weird. So, I wrote what I thought, including being fairly critical of our publisher [Arthur Sulzberger Jr.], and I saw him the next day. He came into the media editor's office. We don't see him much on our floor, and we both kind of sucked in breath. He said: 'I want to thank you for the story you did yesterday.' I said: 'I'm glad you feel that way - I think it was a little rugged, saying you had failed in your choices.' He said: 'I don't care.

Good for the readers, good for the paper, I'm happy you wrote it.' "Mr. Carr describes his position as "kind of complicated."

"I mean, I play for the Yankees, or the Red Sox. I cover baseball."

But he insists he's been allowed to dispense his pointed views free of any meddling. "At our shop, I mean, I've never once felt - and I can say this - the cold damp hands of ownership up my skirt."

One of the reasons Mr. Carr seems sanguine about his job is that he treats it like a happy accident. When the Times first came calling in 2001, it seemed to him "the most preposterous thing I had ever heard," as he writes in his book. He had never envisioned himself as "a Times guy."

He knows now how good he has it. He has been fired from a magazine for refusing treatment, slapped in handcuffs, and laden with guilt for years of tightrope fatherhood when drugs consumed him. And he has worked less-rewarding jobs, including at restaurants, for less pay.

At Casa Nonna, he is unfailingly polite. Not just to me - when the appetizers arrive, he serves us both, and when we tuck into our pasta course, he shovels a couple of his gnocchi onto my plate, unprompted - but also to the waiting staff. He repeatedly stops mid-sentence to say, "That's lovely, thanks so much," or "everything is lovely, thank you." And it's more than common courtesy.

"I waited tables for seven years, so I really care about stuff like that. It's [expletive] hard. I had a waiter dream last night. It was like: 'Table Four's been here a half an hour and they don't have any [expletive] water, what is going on?' Still. From the old days.

That's stress, man," he says, "that's real stress."

At the forefront of an industry dealing with a massive decline in advertising and readers' shifting media consumption habits, The New York Times can claim its fair share of stress in recent years. Its head count has bobbed up and down amid a series of cuts and the launch of a digital paywall in 2011. Just six weeks after our lunch, the paper announced it would eliminate another 100 positions - about 7.5 per cent of the newsroom - through buyouts and layoffs, as the paper tries to adapt to new digital imperatives.

Mr. Carr has leaped feet-first into journalism's evolving digital playground. His chatty Twitter feed ranges from news to life at home . He reads long-form stories on Gawker and BuzzFeed.

Yet, he has also felt the "whooshing" of the online "info stream" and the danger of drowning in it. A day earlier, he had rescheduled our lunch and stayed home after falling ill. "All I did was lily-pad from one thing to another to another to another. And just vast reaches of my day disappeared. And did I work yesterday?

I guess I did. At the end of the day, I felt a little bit like I had been looking at porn all day."

Daily print newspapers, which even he had once abandoned, have returned to his table. He gets The New York Times and Wall Street Journal delivered to his home in Montclair, N.J., and spends an hour with them each morning. He worries about print's "continued dominance" at the Times but still sees a future for it, if a more limited one. And he's emboldened by the success of the the paywall, which had 875,000 subscribers at the end of October.

"We're making a club, that's what we're making. This mass niche called people who read. It's a weird, kooky activity. We could have annual conventions, like the Shriners, with go-karts and clowns," he says.

More seriously, he adds: "I think the fact that The New York Times makes more money off consumers than advertisers" - a recent phenomenon - "is definitional, and it points the way forward."

Mr. Carr thinks the recent media upheaval has hit bottom. The bounce back to prosperity is less certain, but the experiments at adapting can be fascinating to a media reporter.

"We were in one room where we put white paper out on the street, people gave us green paper back. Now we're trying to get to another room where we provide information on all kinds of platforms and people give us money back - it might be Bitcoin, for all I know.

We're in that long, dark hall, still. And you know what? I like it in here, because it's cool," he says.

"It's just, like, unexpected."

We decline dessert - it's getting late, and Mr. Carr has writing to do. His phone trills and, apologetically, he answers it. Daughter Madeleine is heading to the airport, then to Europe, before school starts. A nervous parent, he finishes his call while we stroll back to the Times headquarters.

Outside the building, as Mr. Carr puffs on his second Camel cigarette (one habit he hasn't left behind), a passerby approaches.

Star-struck, he asks for a picture then explains he teaches media in French. "Does that thing do video?" Mr. Carr replies, pointing to the man's phone, then records a message for the man's students - even managing a word or two of American-accented French. After a tour of the newsroom, he sees me out with a wave.

"Okay boss," he says as we part.



Media writer for, editor of the D.C. weekly The Washington City Paper (19952000); editor of Minneapolis alternative weekly The Twin Cities Reader (1993-1995). Contract writer for Atlantic Monthly and New York Magazine.


Mr. Carr is a middle child from a family of seven children who grew in suburban Minneapolis, Minn. He married his wife, Jill, in 1994. They have one child together, Madeleine, born in 1997. His twin daughters, Meagan and Erin, were born in 1988 to his previous partner, Anna.


"Your professor is a terrible singer and a decent dancer. He is a movie crier but stonefaced in real life. He never laughs even when he is actually amused. He hates suck-ups, people who treat waitresses and cab drivers poorly, and anybody who thinks diversity is just an academic conceit. He is a big sucker for the hard worker and is rarely dazzled by brilliance. He has little patience for people who pretend to ask questions when all they really want to do is make a speech."

Associated Graphic


The fall of forestry Red tape and an industry stuck in the red
Tuesday, December 9, 2014 – Print Edition, Page B1

TORONTO, FORT FRANCES, ONT., VANCOUVER -- As Shanda DeGagne-Begin tells it, mind-numbing government regulations are helping to topple Canada's forest industry.

Ms. DeGagne-Begin is secretary treasurer of Leon DeGagne Ltd., a company her father, Leon, founded in 1968, which got into the logging business six years later.

She points to an Ontario Workplace and Safety Information course the company's loggers must pass, called mechanized harvesting for equipment operators, as an example of the proliferation of red tape.

"We don't want to minimize safety," she says, "but it's hundreds of pages of 'you have to tie your boots up, your have to have hearing protection.' "

Making sure employees are aware of such rudimentary rules costs the company thousands of dollars in training and represents thousands of hours in the classroom for employees, many of whom have already spent decades in the bush operating heavy equipment.

"We would never put somebody who is not competent working a $500,000 machine or a $250,000 machine," she says.

As Canada's battered forest sector battles to get back on its feet after a decade of widespread shutdowns and shrinking markets that wiped out more than 100,000 jobs, the common cry across the industry is the need for it to work together with governments to reduce costs and improve competitiveness, if Canada is going to compete in new products in international markets. And the starting point, many say, is to address the red tape that pushes up costs and constrains access to some of the country's best wood, the basis of the entire business.

"The key is access, not [just] to fibre, but to low-cost fibre," says Frank Dottori, the founder of forest products heavyweight Tembec Inc., who recently came out of retirement to buy a small sawmill in White River, Ont.

Just last week, when Resolute Forest Products Ltd. announced it would permanently close its newsprint mill in Iroquois Falls, Ont., it blamed, in part, a lack of availability and high cost of wood fibre.

A key issue, which is nearing a boiling point in Ontario, is access to, and use of, long-term licences that grant companies the rights to tracts of forest for up to 20 years, called Sustainable Forest Licences. In many areas where pulp and paper mills have closed, companies continue to cling to the SFLs. A recent report from the Ontario Auditor-General said that companies that had licences for timber allocated to them were only using a small portion of their allowable harvest - even through there was evidence that there were other companies that lacked access to the wood and could have found a market for it.

That supply constraint is a serious barrier, not only to access to high-quality, low-cost wood, but also to new investment in struggling mill towns.

Officials in Fort Frances, Ont., where Resolute closed a mill earlier this year, believe Expera Specialty Solutions LLC of Kaukauna, Wis., was prepared to buy that mill but couldn't obtain access to low-cost financing. The suspicion is that Expera was offered wood from east of Thunder Bay, Ont., instead of from the forest close to Fort Frances, which about 350 kilometres west of Thunder Bay.

Without commitments on a source of wood, "it's very difficult to get financing," Mr. Dottori said. "There's some pretty basic fundamental economics here that sometimes escape politicians. If you don't have a secure wood supply, you're not going to build anything."

The Ontario Auditor-General report noted that in 2009, a reallocation of Ontario licences attracted investment in new mills in the province, with the lure of access to a reliable longterm supply of wood. But the province hasn't done a significant re-allocation of timber licences since then, despite the closure of numerous mills. The government has been looking at ways to free up unused supplies and is in discussions with industry on a "use-it-or-make-it-available-for-others-to-use" regulation for forest licences, but there's no timetable for rewriting the rules.

Lowering the cost of accessing wood supplies is critical for Canadian producers that are increasingly competing in foreign markets beyond North America - many of which enjoy significant labour cost advantages.

"There are other places in the world that are producing pulp and paper at a fraction of the cost of production here in Canada. You can import paper from low-cost producers abroad," said Brian Downie, a former manager with the B.C. Forest Service who is now a councillor in the northwestern B.C. community of Terrace.

Yet, with North American demand for newsprint and other papers in irreversible decline, tapping those foreign markets is critical to the Canadian forest industry's future.

The United States is still by far the biggest foreign market for Canada's forest products, accounting for nearly two-thirds of all exports last year. But nonU.S. markets have increased their share of Canada's forestproduct exports significantly in the past decade, from 22 per cent in 2003 to 36 per cent in 2013. Canadian producers have increasingly tapped the Chinese market, which now makes up 16 per cent of all Canadian forest product exports, up from just 2.5 per cent a decade ago.

"We have grown our exports to China ridiculously," said Catherine Cobden, executive vice president of the Forest Products Association of Canada, noting that China is now the biggest foreign market for Canadianmade pulp.

Meanwhile, sales to India's massive market have only scratched the surface. Canada's forest-products exports to the country have nearly doubled in the past decade, but they are still only 1.5 per cent of the industry's total exports.

"In India, we're where we were 10 years ago in China," says Ms. Cobden.

"We've got some room to be cautiously optimistic," she said. "We hope we can inspire these communities and governments to look to forest products with a future."

Associated Graphic

Distribution centres, Catalyst Paper in B.C. pictured, have been busy as forestry exports to China have jumped 'ridiculously.'


B.C. terminal to delay expansion after slump in coal prices
Monday, November 24, 2014 – Print Edition, Page B1

PRINCE RUPERT, B.C. -- A federally owned coal-shipping operation in northern British Columbia is placing its expansion on hold for up to five years, getting only halfway toward its goal to double the terminal's capacity.

Ridley Terminals Inc., a Crown corporation put up for sale by Ottawa nearly two years ago, has been ramping up its capacity in anticipation of increased coal exports to energy-hungry customers in Asia. Some industry observers estimate Ottawa might have been able to fetch $1-billion had the government sold the operation in early 2013.

But as coal prices spiralled downward over the past couple of years, producers vastly scaled back or cancelled exports. Interest among prospective buyers of Ridley has waned and the terminal's market value declined. In less than two years, Ridley has gone from scrambling to keep up with surging demand to now having excess capacity - plenty of new equipment but dwindling supplies of coal that arrive in railcars at the Port of Prince Rupert.

During a tour last week, no ships waited to be loaded at the Ridley berth, and some conveyors used to help stockpile coal were halted. Ridley, which loaded its first coal ship in 1984, leases land from the Prince Rupert Port Authority.

In early 2011, Ridley had shipping capacity of almost 12 million tonnes annually before embarking on a $255-million, multiyear expansion in an effort to reach 25 million tonnes a year by the end of 2015. After the initial phases of construction, the terminal's capacity rose to 15 million tonnes annually in 2013 and is targeted to be at 18 million tonnes annually by the end of 2014.

But the expansion will be suspended for up to five years once it hits 18 million tonnes of annual capacity, disrupting Canada's hopes for a coal exporting bonanza from the Ridley site to Asia. That annual throughput for coal and petroleum coke is expected to be high enough for Ridley to handle demand for shipments until the end of 2019, Ridley chairman Byng Giraud said in an interview.

"We're just slowing down the expansion. We've slowed down the pace," he said. "We don't anticipate that we'll need more than those 18 million tonnes a year for the next five years or so. But to say it's all suspended is not exactly true. We need to be flexible should coal prices recover. Should things go better, we could ramp the expansion back up."

For now, the outlook for the coal market appears bleak for the foreseeable future, given a glut of supplies from countries such as Australia and Indonesia.

Over the years, a variety of Canadian and U.S. coal producers have reserved space through Ridley. Low coal prices, however, have hammered the industry. In northeastern British Columbia, coal mining firms have either closed or suspended operations over the past 20 months.

Ottawa hasn't shelved its planned sale of Ridley in a process overseen by Canada Development Investment Corp., but Mr. Giraud said it is common sense for any seller to know that divesting a still-valuable asset during depressed times would be foolhardy.

"This is still a profit-making and successful operation," he said. "Coal prices have gone down, and you have to reassess if it is the best time to unload the asset. You have to get the best value for the taxpayer."

Prices for metallurgical (or coking) coal, a key ingredient used in the production of steel, tumbled to roughly $120 (U.S.) a tonne earlier this year after surpassing $300 in 2011. In the first 10 months of this year, Ridley handled nearly 4 million tonnes of metallurgical coal exports, down 40 per cent from 6.6 million tonnes for the same period last year.

Since 2011, benchmark prices for thermal coal (used by power plants to generate electricity) have slumped more than 50 per cent to roughly $63 a tonne. Last month, Ridley didn't export any thermal coal, compared with more than 335,000 tonnes in October of 2013.

Including metallurgical and thermal coal, as well as petroleum coke, the Ridley terminal handled 6.46 million tonnes in the first 10 months of this year, down 38 per cent from 10.52 million tonnes in the same period last year.

This is no way to treat a key American ally'
Friday, December 5, 2014 – Print Edition, Page B1

CALGARY -- Canada's oil industry has a friend in New Jersey Governor Chris Christie.

The Republican presidential hopeful on Thursday used a soldout speech at the Calgary Petroleum Club - his first stop on his inaugural visit to Canada as governor - to chide U.S. President Barack Obama for delaying approval of TransCanada Corp.'s contentious Keystone XL pipeline.

"Keystone has now languished for six years," Mr. Christie, who also chairs the Republican Governors Association, told a standingroom only crowd of energy executives and financiers. "And I think this sends a very unfortunate signal."

"First, it reduces the willingness of investors to make significant investments in large scale, capital-intensive products that are needed to help our energy reach its customers.

Here in Canada, by limiting the ability of increased production from the Canadian oil sands to get to market, it stunts production and growth.

"Secondly, this is no way to treat a key American ally," he added, during a 35-minute address that elicited a standing ovation.

"This is not about sending 'your oil' across 'our land,'" Mr. Christie said. "It's about maximizing the benefits of North America's natural resources for all, about allowing markets to function, and about contributing to the prosperity of citizens of both the United States and Canada."

Earlier Thursday, Mr. Christie met with Alberta Premier Jim Prentice and talked about energy and trade.

Keystone XL would enable up to 830,000 barrels a day of oil sands and North Dakota Bakken crude to flow to refineries on the U.S. Gulf Coast. The project has been delayed for years by political wrangling and opposition from environmentalists who say the pipeline will exacerbate fastrising greenhouse gas emissions from the oil sands.

In some of his sharpest criticism of the $8-billion project to date, Mr. Obama last month revived a line used by Keystone XL's biggest detractors when he said it would be used to pump oil sands crude to global markets, bypassing U.S. refineries.

"Understand what this project is," the President said while on a visit to Myanmar. "It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else."

Mr. Christie said the delay over Keystone has hurt Canada-U.S. relations, while forcing more oil to be shipped on railroads and by truck. "That affords flexibility, but it is not without risk, or without higher costs."

The Governor, who is scheduled to be in Toronto and Ottawa on Friday, met behind closed doors with energy industry executives, including Murray Edwards, founder and chairman of oil sands independent Canadian Natural Resources Ltd.; Rich Kruger, chief executive officer of ExxonMobil Corp.-controlled Imperial Oil Ltd.; and Al Monaco, chief executive officer of Enbridge Inc.

He used his speech to burnish his foreign policy credentials, at one point praising Canada's involvement in the American-led coalition fighting Islamic militants in Iraq. He also advocated for improved labour mobility and smoother cross-border trade.

The Governor, widely pegged as a leading contender for the Republican nomination, said he would make his presidential ambitions known next year. "I'm not the shy and retiring type, so when I make a decision I'll be sure to tell you," he said.

Keystone backers in the U.S. Congress have pledged to make the pipeline a priority item once a Republican-controlled Senate resumes sitting next year. TransCanada chief executive Russ Girling said he welcomed the Governor's support for the project.

"He's obviously very supportive of trade and the trade relationship between our two countries," he told reporters. Mr. Girling noted TransCanada, which helped sponsor Mr. Christie's appearance, already has a relationship with New Jersey; its Ravenswood power plant in Queens, N.Y., helped power relief efforts following Hurricane Sandy in 2012.

"A trade relationship with him today and in the future is going to be important to us."

Associated Graphic

New Jersey Governor Chris Christie, right, meets with Alberta Premier Jim Prentice in Calgary on Thursday.


New Jersey Governor Chris Christie makes a point on Thursday at the Energy Sector Luncheon in Calgary.


After record runs, banks hit a rough patch
Saturday, December 6, 2014 – Print Edition, Page B1

It only took one quarter for all the fervour around Canadian banks to peter out.

When the Big Six lenders reported third-quarter earnings at the end of August, profits had arguably never looked better, with five banks making record amounts.

Three months later, expense control is all the range and certain banks are flirting with job cuts.

Some chief executives have gone so far as to warn investors that their short-term profit targets won't be met.

Investors got the message. Since the Big Six banks started reporting their earnings on Tuesday, their share prices have fallen an average of 4 per cent. Goldman Sachs Group Inc. reportedly unloaded a $600-million bankheavy basket of Canadian investments late Thursday.

The new outlook does not apply to all lenders. Royal Bank of Canada believes it can still grow at a fast clip next year. National Bank of Canada has shown that the troubled Quebec economy, to which it is closely tied, can still deliver growth, and management is optimistic about its wealth management opportunities next year.

But the second- and third-largest banks have both expressed caution. Toronto-Dominion Bank stressed the need to "streamline our cost base" on Thursday, and Bank of Nova Scotia reiterated this theme when it reported earnings Friday.

Even though Scotiabank preannounced $451-million of onetime charges in November, the stock still fell 2 per cent on Friday as investors grappled with the new reality. Chief executive officer Brian Porter described the situation as a "perfect storm" of charges and losses.

"In that regard, we're happy that 2014's over," Mr. Porter added on a conference call Friday.

Because the bank is retooling after a multiyear run of acquisitions and expansion, particularly in Latin America, chief financial officer Sean McGuckin said on the call that "expense discipline continues to be a major focus."

Scotiabank has announced plans to cut 1,500 jobs. TD Bank has foreshadowed a similar fate. Both banks warned that it will be tough to meet their desired earnings growth targets next year.

Bank of Nova Scotia's profit stumbled in the fourth quarter after the bank reported a number of one-time charges, finishing with earnings of $1.4-billion, down 14 per cent from the same period in 2013.

Over the full fiscal year, Scotiabank's profit totalled $7.3-billion, 10 per cent more than 2013. However, one-time items also cloud the full-year earnings, because the bank booked a significant $643-million gain during the third quarter on the sale of its stake in CI Financial Corp.

The bank's international operations remain a major focus for investors because the global economy has shown signs of cooling, hence the need to cut costs abroad.

Over the past year, Scotiabank has closed 55 branches in Latin America, and has plans to shut 120 more.

National Bank of Canada's fourth quarter profit rose to $330million, up 3 per cent from a year earlier. After stripping out onetime items, the bank reported a 14-per-cent rise in profit, led by its financial markets and wealth management businesses.

National Bank joined RBC as the only other major Canadian bank to have met or exceeded market expectations for fourth-quarter profit; it raised its quarterly dividend by 2 cents to 50 cents a share.

National Bank is keen on the growth potential of its wealth management business. The bank also strives to continue expanding beyond its Quebec base. Next year, more than 40 per cent of revenue is expected to come from outside its home province.

To help achieve this goal, National Bank has been looking for small international acquisitions, such as the investment recently made in Cambodia's ABA Bank. National Bank acquired 30 per cent of the lender for $26-million.

Bank of Nova Scotia (BNS) Close: $66.20, down $1.38 National Bank of Canada (NA) Close: $49.70, down 70¢

Associated Graphic

'Expense discipline' will become a major focus for Bank of Nova Scotia, which has announced plans to cut 1,500 jobs.


Fresh worries arise over GM's future in Canada
Wednesday, December 3, 2014 – Print Edition, Page B1

New doubts are being raised about the future of the General Motors of Canada Ltd. vehicle assembly operations later this decade.

The current General Motors Co. product plan points to the end of vehicle production in Oshawa, Ont., and a cut at a plant in Ingersoll, Ont. to a single shift, said Joe McCabe, president of auto industry consulting firm AutoForecast Solutions LLC.

"By 2019, we have Oshawa completely shut down," Mr. McCabe told the Automotive Parts Makers Association of Canada forecast conference Wednesday.

Each of the vehicle types made at the Canadian plants is scheduled to be made at another GM assembly plant in North America or has already been earmarked for transfer, he noted.

In addition, the vehicles assembled in Canada are not sold in this country in large quantities, unlike Honda Motor Co. Ltd. and Toyota Motor Corp., whose Canadian assembly plants build their bestselling vehicles in the Canadian market.

"Is there a compelling story for [GM] to continue to build here when the vehicles they sell here are not sold in massive quantities?" Mr. McCabe asked.

The fears about the future of GM's Canadian operations, which have also been expressed by Unifor president Jerry Dias and privately by senior executives of auto parts makers, have been growing as the expiry of a production commitment made in 2009 approaches.

In return for a $10.8-billion contribution by the federal and Ontario governments as part of a three-government bailout of the GM Co., the auto maker committed to maintain 16 per cent of its North American vehicle production in Canada through 2016.

The exodus of products begins next year when Chevrolet Camaro production stops in Oshawa and begins at GM's Lansing Grand River plant in Lansing, Mich.

In 2016, one of the two assembly plants in Oshawa is scheduled to close.

In Ingersoll where GM's Cami Automotive Inc. plant is running on three shifts, production of the Chevrolet Equinox and GMC Terrain crossovers is scheduled to begin in Mexico later in the decade, Mr. McCabe said.

He noted that when rumours arose in Toledo, Ohio, that Chrysler Group LLC might shift production of the Jeep Wrangler elsewhere, a local and statewide movement organized within 10 days to "save something that they didn't lose in the first place."

No such public movement has emerged in Oshawa or Ingersoll, he said.

A shutdown of Oshawa would eliminate about 3,600 unionized jobs at the two assembly plants. About 2,700 Unifor members work at Cami.

Tens of thousands more jobs at suppliers also depend on GM's Canadian production.

GM Canada spokeswoman Adria MacKenzie said the auto maker is investing $250-million in Cami to support future vehicle production.

The products assembled at the Flex Plant in Oshawa will continue to be built for the foreseeable future, she said, based on market demand.

Canada's share of North American vehicle production, which is already declining as auto makers invest tens of billions of dollars to build assembly plants in Mexico, is already set to decline.

Halting production in Oshawa and cutting output at Cami would slice Canada's share to 9.6 per cent by 2021 from 14.7 per cent last year, Mr. McCabe said.

Canada would slip to 15th spot among global auto producing countries, from 10th in 2013.

Ontario Finance Minister Charles Sousa, who also spoke at the conference, told reporters after his presentation that his plan to sell the province's common shares of GM is still in place.

"Where we can reinvest that money and make greater gains, I think it's important for us to make that decision," Mr. Sousa said. "I want us to invest - and the public requires us to invest - in infrastructure and things that enable future generations to be more competitive."

The Canadian Automotive Partnership Council, an industry advisory group, urged the federal and Ontario governments last week to create a joint automotive investment board that would seek new investments and find ways to retain existing assembly plants.

AGF takes 'hard look', pares dividend by 70 per cent
Wednesday, December 10, 2014 – Print Edition, Page B1

AGF Management Ltd. is cutting back its hefty dividend, a major step in the plan to turn the struggling asset manager into a more influential international investment business.

The company said Tuesday that it would prune the company's dividend by about 70 per cent in the first quarter of 2015, a move that will give AGF the flexibility to invest more in growing its business and deter investors who aren't aligned with the company's new direction.

"We've paid out a dividend for 46 years so it's something we want to maintain," Blake Goldring, chief executive of AGF, said in an interview. "But we took a hard look at the yield the industry is paying today. We want to get down to more what our peers are paying, from a dividend perspective."

AGF said it will pay out its quarterly dividend of 27 cents a share on Jan. 16, 2015, but warned that it will subsequently cut its dividend to just 8 cents. Looking back on the past four quarters, that would be the difference of paying out about $27-million, rather than the more than $90-million AGF passed on to shareholders.

But it's unclear exactly what the savings will be for AGF next year, because the company plans to renew its share buyback program in February next year.

AGF has more than $270-million in cash it could have used to prop up the dividend in coming years, but some analysts viewed the payouts as unstable for a fund manager coping with heightened competitive pressures and tight profit margins. The company has been working to improve investment results and has slowed the net outflows of money from its mutual funds in recent quarters.

AGF's stock is down nearly 40 per cent in 2014 and fell 14 per cent on Tuesday.

Among the shareholders most affected by the dividend cut will be the founding Goldring family, whose stake earned more than $14-million in dividend income last year. That would shrink to about $4-million at a rate of 8 cents a share. It was Blake's father, Warren Goldring, who cofounded of AGF, named after the American Growth Fund, the first U.S. equity fund opened to Canadian investors. AGF would become known primarily as a mutual fund investor and retail funds still make up more than half its assets under management.

The rich dividend yield AGF was paying kept some valuable institutional investors away at an important time, Mr. Goldring said. "To the extent that there were people only invested for the very high yield, it's just not realistic in this environment."

The dividend yield hit 11 per cent as of Monday's close before the announcement.

AGF is also contending with industry-wide trends reshaping the market for asset managers, such as changing regulations on fee disclosure and the threat that trailer fees, which are payments fund companies make to advisers who sell them, could be eliminated. Fund companies have begun to adjust their business for these changes, with several lowering prices in recent months.

Earlier this year AGF brought on Kevin McCreadie as chief investment officer to oversee the firm's $35-billion of assets under management and improve fund performance. Mr. McCreadie said Tuesday that the company could better use the capital that has paid the dividend to boost the company's investment performance, asset base and client relationships.

Mr. McCreadie wants to build out the company's institutional investor base and alternativeinvestments platform, which includes infrastructure. He says the company is contemplating opening representative offices in the Middle East and Asia to reach out to more prospective clients.

"In our minds this is a better use of the cash ... we can return capital over time through a share price that increases with our growth," Mr. McCreadie said.

Associated Graphic

The family of CEO Blake Goldring will see their dividends fall to about $4-million a year from $14-million last year.


BoC raises warning over growing consumer auto debt
Thursday, December 11, 2014 – Print Edition, Page B1

The Bank of Canada is raising a caution flag over growing auto debt among Canadian consumers, noting that auto loans have almost doubled in eight years to more than $120-billion amid growth that has outpaced other forms of household debt.

The central bank added its voice Wednesday to a growing chorus of consumer advocacy groups, analysts, bankers and even some senior auto industry executives expressing concern about long-term auto loans that are helping fuel record vehicle sales in Canada.

The bank said in its Financial System Review that it has "modest concerns" about the rise in auto debt, but "the recent changes in the auto financing landscape warrant continued monitoring in the context of already high household indebtedness, particularly if the debt is being incurred by borrowers who are already stretched financially."

The bank said two factors are being watched closely: the growth of loans to people with low credit rising to 25 per cent of the market, and risky practices such as longer-term loans and loans that are becoming a higher percentage of the total value of a vehicle.

The growth of longer-term car loans that stretch as long as eight years has helped propel the Canadian market to record sales that are expected to top 1.8 million vehicles this year.

The longer the term of the loan, the lower the monthly payment, which is the key element in consumers' minds as they consider new vehicle purchases.

But the danger to consumers is that if they want to trade in their vehicles before the loan has been paid, they can find that the vehicle is worth less than the amount of money remaining on the loan.

If they buy a new car, "now you've got yourself a loan on a new car, plus the residual balance on the old car and [you're] putting yourself in worse financial shape," said Scott Hannah, chief executive officer of Credit Counselling Society in Vancouver.

Mr. Hannah's concern is echoed privately by some dealers.

"It could be a young couple buying their first car and we tell them, 'You've got to think about three or four years from now, your life may change ... and a subcompact just isn't going to cut it,' " said one Toronto-area dealer.

"Consumer satisfaction goes down the drain. They get mad at us, they get mad at the vehicle, they get made at the brand."

Mr. Hannah is worried about the impact long-term car loans with fixed payments will have on the ability of consumers to pay mortgages and other debt "when interest rates rise, not a question of if, but when."

Many Canadian economists expect rates to begin rising during the fourth quarter of 2015.

"If you've already got a large vehicle loan factored in - that may have a term that is going to expire in three or four years - you're going to be in a worse position to deal with the rise in interest rates than a person who has been very careful in paying down their consumer debt," he said.

The average length of an auto loan stands at about 74 months, compared with 63 months in 2009, according to data compiled by consulting firm J.D. Power and Associates. The firm said 69 per cent of loans now exceed six years.

Part of the reason for that growth is the drop in vehicle leasing, which made up almost 50 per cent of the Canadian market before the 2008-09 recession. Some vehicle companies eliminated leasing entirely during the recession. It has returned but now represents about 20 per cent of the market.

Monthly payments, meanwhile, have grown since 2009 by just $20 to $542 this year. Transaction prices, minus cash rebates, have jumped to $31,389 this year from $26,774 five years ago, said Robert Karwel, senior manager of the Power Information Network in the consulting firm's Canadian office.

OPEC holds firm as oil prices spiral
Cartel's secretary-general blames falling prices on speculators, urges members to keep spending on exploration and production
Monday, December 15, 2014 – Print Edition, Page B1

CALGARY -- The head of OPEC defended the organization's recent stand on oil production on Sunday and argued that the relentless slide of prices could be the result of speculation rather than a reflection of oversupply.

Abdullah al-Badri, the Organization of the Petroleum Exporting Countries' secretary-general, said the cartel's members can survive the slump and urged Gulf states to continue to spend on exploration and production.

Down more than 40 per cent since June, oil prices hit five-year lows on Friday - a decline that has hammered equity markets around the world. The price drop, Mr. al-Badri said, is without merit.

"The fundamentals should not lead to this dramatic reduction [in price]," he said at a conference in Dubai, speaking in Arabic through an English interpreter.

He said only a small increase in supply had led to a sharp drop in prices, adding: "I believe that speculation has entered strongly in deciding these prices."

At the end of November, OPEC decided to maintain its production at roughly 30 million barrels of oil a day. The benchmark price for a barrel of oil in North America is down about 15 per cent since this decision. OPEC, Mr. Badri reiterated, does not have a target price for crude.

Falling oil prices have forced energy firms around the world - from U.S. shale plays such as the Bakken in North Dakota and the Eagle Ford in Texas to Alberta's oil sands - to crimp spending and reconsider expansion plans.

Canadian Oil Sands Ltd., for example, this month announced a dividend cut of 42 per cent. Cenovus Energy Inc. last week cut its 2015 budget by 15 per cent compared with 2014. Canadian Natural Resources Ltd. has earmarked $2-billion of its $8.6billion budget as optional, depending on commodity prices.

Encana Corp. will release its 2015 budget Tuesday, and it has already said it will break from the energy industry's trend toward austerity. Encana is attempting to shift toward oil and away from dry natural gas. The plan, however, relies on the company expanding in some potentially prolific - although not entirely developed - areas in North America.

Doug Suttles, the company's chief executive, last month said the company would spend "substantially" more than the $2.5billion (U.S.) to $2.6-billion it will outlay this year. The "predominance" of Encana's activity in 2015 will take place in the Montney, in Alberta and British Columbia; the Duvernay in Alberta; the Eagle Ford in Texas; and the Permian basin in Texas, he said.

Encana's push in three of these unconventional plays - the Montney, Duvernay and Permian - puts it in contrast with ConocoPhillips Co., one of the world's largest oil and gas firms. That company iced significant spending plans in those emerging areas when it released its 2015 budget earlier this month in reaction to sliding oil prices. ConocoPhillips kept the Eagle Ford play, which is generally more developed than the others, remains in its good books.

Encana's gamble could pay off if its competitors sit on the sidelines during the downturn in crude prices.

OPEC's Mr. al-Badri on Sunday continued to argue the cartel's decision to maintain production was not designed to undermine the potential for oil production in North America's shale plays.

"Some people say this decision was directed at the United States and shale oil," he said. "All of this is incorrect. Some also say it was directed at Iran and Russia. That is also incorrect." However, Kuwait's oil minister said on Sunday that OPEC's decision was designed so the 12 member countries could retain market share, even if prices dropped.

"OPEC, which includes Kuwait in its membership, took the decision not to cut production in order to maintain market share, even if not cutting output negatively affects prices," state news agency KUNA quoted Ali al-Omair as saying.

CP knew of faulty tank-car wheel before derailment, TSB says
Friday, December 12, 2014 – Print Edition, Page B1

A defective rail car wheel that caused a 2013 derailment and oil spill was flagged by Canadian Pacific Railway Ltd. as needing replacement, but permitted to run days before the accident in Northern Ontario, the federal rail investigator says.

Two tank cars spilled 102,000 litres of crude oil after tumbling down an embankment near White River in a 22-car derailment in April, 2013, after a broken wheel caused the rail to fracture, the Transportation Safety Board of Canada said in a report released on Thursday.

Four days before the derailment, the problem wheel was flagged by an automated trackside detector that warned the wheel should be removed from service, based on standards set by the American Association of Railroads.

"There was an opportunity to remove the wheel," Rob Johnston, a TSB manager for railways and pipelines, said in an interview.

However, "company guidelines permitted the wheel to remain in service," the report said.

The report also found the DOT 111 tank cars carrying the oil did not prevent spillage after the derailment when the top and bottom valves and fittings failed.

The railways do not generally own the cars they haul, but are responsible for their safety and allowed to make repairs and bill the owner. CP spokesman Jeremy Berry said the railway has since toughened its standards but could not say if they matched the AAR guidelines.

The automated system that detected the defect measures the impact of the wheel on the track as the rail car passes. Greater impacts indicate a wheel is cracked or out of round, and should be replaced.

The broken wheel that caused the track to break showed readings that said it should be replaced under AAR standards six of nine times in the previous 16 months. But the TSB report said CP's guidelines are more permissive of defects than those of the AAR, and that the wheel was allowed to remain in service until it failed.

Mr. Johnston said Transport Canada regulations are silent on wheel impact measurement, but that Canadian railways have voluntarily installed the detectors.

However, they are not bound by the tougher AAR standards when on Canadian tracks.

Since 1999, there have been six major derailments the TSB blamed on broken wheels that were previously flagged for replacement under AAR standards, but deemed by CP or CN to be within acceptable limits.

The report was also critical of CP's response to the derailment and spill, noting the railway did not set up a safety perimeter and access to the derailment site was not controlled. TSB investigators said communication with CP officials was poor, and the railway made no mention of the fire that occurred in the derailment. "In this case, there were significant gaps in the CP response to the release of highly volatile crude oil," said the report, adding efforts to clean up the derailment were poorly organized.

The derailment preceded the July, 2013, derailment and explosion of an oil train in LacMégantic, Que., that killed 47 people and wiped out the town's centre. The tragedy resulted in new standards for carrying crude by rail, including a phasing-out of the DOT 111 tank cars.

Moving crude oil is a fastgrowing business for railways capitalizing on a lack of pipeline capacity. CP said it plans to double its crude business to 200,000 cars a year by next year. Analysts estimate the energy business - hauling oil, fracking sand and drilling gear - has grown to account for about 10 per cent of revenues at both CP and Canadian National Railway Co.

Even as oil prices plunge, moving crude to refineries by train is expected to remain a key strategy for producers.

Market researcher IHS said the amount of oil on North American tracks will peak at 1.5 million barrels a day, or 10 per cent of production, between 2015 and 2016.

In a bid to bolster BlackBerry, Ottawa backs Vodafone purchases
Tuesday, December 16, 2014 – Print Edition, Page B1

OTTAWA -- Export Development Canada is lending British telecom giant Vodafone Group PLC $850-million (U.S.), the bulk of which will be used to finance the purchase of BlackBerry Ltd. handsets and services.

The financing package - the largest this year by the federal government's export lender - comes at an opportune time for BlackBerry, which is poised this week to unveil its latest smartphone, the Classic, and release third-quarter results.

The company, under the leadership of turnaround specialist John Chen, is attempting to revive its business following a steep drop in smartphone sales and a steady decline in lucrative service fees derived from its dwindling customer base, which includes about 40 million business and government users.

Of the total loan package, $750-million will go to pay for purchases by Vodafone, one of the world's largest wireless carriers, of the entire range of BlackBerry's offerings, including equipment and services.

The five-year financing, to be announced Tuesday, is being made at "commercial terms," but the rate is confidential, said Todd Winterhalt, EDC's vicepresident of international development.

Vodafone has been one of BlackBerry's largest customers since it began selling the company's smartphones to its business clientele in the early 2000s.

It marks the second time in two years that EDC has financed BlackBerry export sales to Vodafone, and the second BlackBerry-related financing with a major European telecom. At the end of 2012, EDC lent $750million, which Vodafone recently repaid. And last year, EDC provided $256-million in loans to Telefonica SA of Spain, also to finance BlackBerry purchases.

The loans will help BlackBerry "solidify their presence" in Europe's various emerging markets where Vodafone operates, Mr. Winterhalt said.

The EDC got involved because private-sector lenders typically won't finance purchases of this size, Mr. Winterhalt explained. "$750-million or $850-million is a big dollar amount and a lot of the commercial players can't do that," he said. "They would be maxed out."

Adam Emery, a BlackBerry spokesman, declined to provide additional details.

The remaining $100-million of the loan package will go toward expanding Vodafone's base of smaller suppliers in Canada.

A bonus of this deal is the $100million to help Vodafone identify other potential Canadian telecom suppliers, particularly smaller ones that otherwise wouldn't be able to get in the door at a customer of that size, Mr. Winterhalt said. "These transactions are not just about two big companies. This is really a small-business story."

Vodafone has mobile operation in 26 countries and 438 million wireless customers. It also has fixed and broadband operations in 17 countries.

EDC officials said they specifically target companies whose purchasing needs match up with expertise in Canada.

The Vodafone financing is EDC's second major one this year with a European telecom company. In September, EDC provided financing of $254-million to Telefonica SA of Spain. That package was aimed at encouraging the company to purchase equipment and services from Alcatel-Lucent, a French company with extensive operations in Canada.

So far this year, EDC has arranged financings worth $19.2billion, up from $16.3-billion at the same time last year.

Associated Graphic

Export Development Canada is financing BlackBerry export sales to Vodafone for the second time in two years.


Don't look now, but the Raptors are - gasp - the best team in the East
Monday, November 24, 2014 – Print Edition, Page S1


By the end, even LeBron James couldn't believe what was happening.

In the dying moments of his team's 110-93 whipping by the Toronto Raptors on Saturday night, cameras caught James sitting on the Cavaliers bench, staring disconsolately into the vast nothingness.

He'd come out fairly vibrating with intensity. As you may have heard, things are not going quite to script in Cleveland.

The Cavaliers were up by 18 points within four minutes. That speed burst lasted a single quarter. Cleveland spent the next three sliding into the ditch. The knife was fully stuck in by Toronto's Lou Williams, who repeatedly embarrassed James one-on-one. Williams scored a career-high 36 points, and looked as if he could've scored 80 if he'd felt the urge.

Williams only rated a news brief when he was brought here over the summer, as part of the deal to get rid of John Salmons. Right now, he may be the best off-season pick-up by value in the entire NBA - and that's including James.

Williams for Salmons doesn't just seem like a great deal any more. It seems as if it ought to prompt a criminal investigation.

"This is not even the lowest it's going to get for us," James said afterward, surprising America with the news that there can be something worse than losing to Canadians at basketball.

There was a Freaky Friday feel to the whole thing. One of these teams was supposed to walk away with the East. And it's the other one actually doing it.

Toronto didn't just dominate - they swaggered. Even behind by 20, you could sense their ease.

They knew they were coming back.

James and his Cleveland coworkers left the opposite impression - brittle, waiting for the sandbag to come out of the rafters.

"We're a very fragile team right now," James said. "Any little adversity hits us, we just shell up."

A week ago, you figured Cleveland would work out the kinks. Just by himself, James should be able to drag this team to a final.

Now, you're not so sure. They may still be great. But that 'may' is beginning to pulsate in the background. Eventually, it will completely undo them.

And if Cleveland isn't the best team in the East, I've got some alarming news for you - Toronto is.

We knew the Raptors would be good. We had no idea they could be this good. What's happening here is beyond numbers and rotations. It's alchemy. This roster fits together perfectly. They have what great teams have - contentment. Each man knows his place and is comfortable in it. With due respect to general manager Masai Ujiri, you can't build a team like this. It just has to happen.

You wish you could go back in time, to the start of the season, and truffle out a prediction from every guy in the room. Not one would have given themselves any chance of winning their conference.

"I haven't heard one person in our locker room talk about where we are in the standings," coach Dwane Casey said Saturday. Just because they aren't talking about it, doesn't mean they aren't thinking it. I'll bet you anything they've started thinking it.

They're 11-2, and already six games ahead of the competition in their division. The Atlantic is already won. That puts them no worse than fourth in the East come playoff time.

That was the optimistic guess at the start of the year - third or fourth, with a decent shot at winning a playoff round.

But this run to the top suddenly looks sustainable. They are beating teams every which way, at both ends of the floor. Every night, there's a new hero, and usually off the bench. This team is talented, but just as importantly, it's deep. It's built to travel the distance of a season.

No other Eastern squad has quite the same advantage.

The Cavaliers are edging toward a Lakers-level meltdown. It doesn't look as if Derrick Rose will ever get back to fully fit, which pushes Chicago's dial toward mediocrity.

Washington's been great, except for that time two weeks ago they got annihilated at the Air Canada Centre. Where Dwyane Wade goes, Miami will follow - so far, so good, but history suggests there's at least one major breakdown coming.

Everyone else has problems. The Raptors have solutions. As long as they remain healthy, there is no reason for them to fade.

There is a large part of you that would like to see them embrace their new status as front-runners. That's another defining characteristic of great teams - they don't pretend anything short of titles will satisfy them.

It's still early days in that regard.

As the season gets better and better, everyone connected to the Raptors has gotten quieter and quieter. They're terrified of jinxing things. That's the exact word. After an orgiastic early season column, one of the team's execs came to me fretfully and said, "Don't jinx us."

They're beyond jinxes now, but they still push the underdog angle hard. Even Williams - who's only been here for a few weeks - spent much of Saturday's postgame talking about "respect" and the old "chip on the shoulder."

It sounds a little tinny considering how many opposing coaches and players are lining up to heap praise on this squad. U.S. outlets are falling over themselves trying to be the first to 'discover' this team.

But if that's what Williams & Co. require as motivational fodder, continue on with the imaginary poor mouthing.

That's what makes this team so different from any Raptors side of the past. Those squads, even the good ones, were always asking for respect. City by city, this one is taking it.

Follow me on Twitter:@CathalKelly

Woods pins hopes on his old back magic
The star golfer is working on a 'new, but old' swing that incorporates previous moves dating as far back as his amateur days
The Associated Press
Wednesday, December 3, 2014 – Print Edition, Page S2

WINDERMERE, FLA. -- Tiger Woods is making his latest comeback in golf with an eye to the past.

Equipped with a new teacher and a stronger body, Woods said Tuesday he is working on a swing that incorporates previous moves that date as far back as his amateur days. He referred to it as "new, but old," and the 14time major champion will start testing it this week against an 18-man field of elite players at the Hero World Challenge.

How old were some of those videotapes he watched of his previous swing?

"Actually, it's pretty interesting trying to find a VHS recorder," Woods said. "I have a lot of tape like that. Fortunately, my mom is of the age where she has that still in the house. So that was very beneficial to look at some of the old tapes."

Otherwise, it's another new beginning.

This is the fifth time Woods has returned from injury - the back, this time - over the past five years. The breaks have ranged from four weeks to four months. He last competed on Aug. 9, when he missed the cut at the PGA Championship, ending the shortest season of his career (eight tournaments) and the first time he did not have a top 10.

Woods said he had enough time off to let his body heal and to think about where he wants his game to go.

First, he split with swing coach Sean Foley, ending a three-year relationship that produced eight PGA Tour wins but no majors.

"I think that physically, I just wasn't able to do some of the things that we wanted to do in the golf swing," Woods said.

Woods said there was no reason to look back at old swings at the time because he felt he was headed in the right direction - three victories in 2012, and five wins in 2013, in which he was voted PGA Tour player of the year for the 11th time. Those two years were relatively free of injuries.

"But unfortunately, physically I was getting damaged doing it," he said. "So in retrospect, you look at it. Was I ever hurt when I was little? Granted, I don't think we all were. I think we all could jump off roofs and nothing would break. But playing detective and looking back on it, you have to somewhat have an understanding, physically, of where you are at the time."

He announced just more than a week ago that he had hired Dallas-based Chris Como as a swing consultant, after long-time friend Notah Begay III put them together.

Woods said he had a plan, and that Como was on the same page.

"I was very surprised and very excited to see what he felt my swing should look like, and should look like going forward," Woods said. "Because that was very similar to the vision I had."

Woods did not delve into specifics of his swing, which he rarely did when going through an overhaul with Butch Harmon, then Hank Haney and Foley.

"It is new, but it's old," he said. "I say that because I haven't done it in a very long time. We looked at a lot of video from when I was a junior, in junior and amateur golf ... And it was quite interesting to see where my swing was then and how much force I could generate with a very skinny frame. How did I do that? How do I generate that much power?

That's kind of what we are getting back into it."

Even so, Woods concedes that age - he turns 39 at the end of the month - has kept him from overpowering golf the way he once did.

Along with four operations on his left knee, and problems with his Achilles tendon in 2011, Woods lately has been coping with back problems. He had surgery a week before the Masters and missed two majors. Upon his return in the summer, he had his worst 72-hole showing in the British Open and missed the cut in the PGA Championship.

"I've gotten stronger. I've gotten more explosive. I've gotten faster," he said. "I now just need to hit more balls. But the body is good. I don't have the sharp pain like I used to at the beginning of the year. I don't have that any more. I still have some aches and pains, just like anybody else who is my age and older."

It took Woods about 18 months to work out the big change under Harmon, and about a year to adapt to changes under Haney. He won his first tournament just more than a year after working with Foley.

He doesn't know how long this change will take, although he said the motor patterns are vaguely familiar.

"Am I game-ready? Probably not quite as I would like to be," Woods said. "How long does it take me to get back into the flow of a round? Sometimes it takes me a shot, sometimes it takes me three or four holes after a long layoff. I don't know.

We'll see on Thursday."

Associated Graphic

Tiger Woods hits during the 2014 PGA Championship at Valhalla Golf Club in August. Woods has hired Dallas-based Chris Como as a swing consultant.


Leafs burn Flames with Brian Burke in the house
Wednesday, December 10, 2014 – Print Edition, Page S2


It was Brian Burke and Dion Phaneuf, together again.

Just like old times.

Whether they like it or not, those two are going to be linked for the rest of their time in hockey, all because of one blockbuster deal Burke pulled off back in 2010 when he was still a relatively new general manager with the Toronto Maple Leafs.

Not only did he land Phaneuf from Calgary, he slapped the captain's 'C' on him quickly, a controversial move that still has ramifications today.

These days, both are riding high, too.

The Flames made their one and only visit this season to Toronto on Tuesday, but, with their president up in a familiar spot in the press box glowering down at a Leafs roster filled with players he acquired, it wasn't a happy occasion for the visitors.

The Leafs showed some pluck in beating Calgary 4-1, going up two goals early on and then using a lopsided second period to hand the Flames their second straight regulation loss.

Fittingly, a Phil Kessel emptynetter was what put the game away for good.

Burke has had a charmed existence in Calgary this season, his second in a high-level executive role with the rebuilding club. His team wasn't expected to do much of anything after finishing fourthlast a year ago, but the Flames entered Tuesday's game in solid playoff position, five points up on Toronto and the feel-good story of the league.

The odd thing about the Flames' success is they look a little like the Leafs in their last season under Burke, a young team that started with a surprise burst out of the gate and faltered badly late in the season in what became known as "the 18-wheeler going off a cliff."

This was Leafs Collapse No. 1, for those keeping count.

Hockey's new legion of quants are predicting much the same for Calgary this year, and the Air Canada Centre crowd witnessed why.

Toronto, a team that is still very much a work in progress when it comes to its possession game, ran over the Flames in the middle frame in particular, outshooting them 13-4 and sending wave after wave of attacking forwards deep into the Calgary zone.

This isn't something the Leafs are known for. In fact, it may well have been their most dominant period of the year.

Only netminder Jonas Hiller kept Toronto from building on what was already a 2-0 lead, one created by goals from Peter Holland (off his skate) and James van Riemsdyk (on the power play).

Picking up an assist on that second marker was Phaneuf, who has had a charmed year of his own.

Asked about having Burke watching on, he spoke to how much he respected the man who swung for the fences and landed him in that seven player deal nearly five years ago.

"Burkie has had a big influence on the team we have here," Phaneuf said, referencing the 10 players left over from Burke's largely unsuccessful regime. "He was a guy that I really enjoyed working for. He was honest. He'd tell you how he felt, but you could be honest with him, too. I've got a lot of respect for him and what he's done in the game."

While Burke has earned plenty of kudos for the Flames' turnaround, Phaneuf's transformation this season has been just as dramatic.

In part, it's come because the Leafs have made his life much easier, with a new partner (Cody Franson) and less onerous minutes. In response, the captain's possession game has improved more than most defencemen in the league, a big boost to Toronto's playoff chances in the weaker Eastern Conference.

Unlike the year of the 18-wheeler - and the two years after that, technically - this time the Leafs success is less of a mirage, with more depth on the roster to help them stay in contention over the longer haul.

They're not world-beaters, but they're better than they've been.

Burke isn't at the reins in Calgary the same way he was here, but he certainly still has a say, and it'll be fascinating to see if he opts for more of a slow build in Alberta.

For all the big deals he made (and won), his biggest mistake in Toronto was a lack of patience in reconstructing the train wreck of a roster he inherited.

He has more to work to do with the Flames, but it'd be unwise to look at their hot start and suddenly start making roster decisions presuming they're further along than they are.

Unlike a lot of execs, he gets a chance at a do-over, in an easier situation, to turn things around.

That isn't all that much different than Phaneuf, who already seems to have learned a thing or two from failures past.

We'll see if it all lasts.

Associated Graphic

Toronto Maple Leafs forward Peter Holland, right, celebrates after scoring on Calgary Flames goalie Jonas Hiller during first-period action in Toronto on Tuesday.


Saunders excited about chance to patrol left field for Blue Jays
Victoria native looks forward to joining Toronto lineup packed with all-stars and MVP finalists
Friday, December 5, 2014 – Print Edition, Page S1

TORONTO -- Michael Saunders has always prided himself on the care he takes to prepare himself for the rigours of a baseball season.

And for that reason he said it stung him upon hearing the remarks made by Jack Zduriencik, the Seattle Mariners general manager, at the conclusion of the 2014 season that seemed to be calling into question the 28year-old's work ethic.

"The comments came as a surprise, I'm not going to lie to you," the newest member of the Toronto Blue Jays said during a telephone conference call on Thursday afternoon. "I've never had my condition or my workouts be called into question before."

It certainly was not an issue with the Blue Jays and Alex Anthopoulos, the team's general manager, who on Wednesday continued a bold off-season when he traded starting pitcher J.A. Happ to the Mariners in exchange for Saunders, a native of Victoria.

Anthopoulos said that Saunders will be the Toronto's everyday left fielder next season as the Blue Jays have obviously abandoned any hope of getting into any bidding war to re-sign Melky Cabrera. Cabrera became a free agent at the year's end and remains on the open market.

Saunders is a six-year veteran, all with the Mariners, who played for Canada at the 2008 Olympics in Beijing and at the 2013 World Baseball Classic.

He said now having the opportunity to play in Toronto for Canada's only major league team is another feather in his cap.

"If I was to get traded to a team I couldn't have picked a better one than Toronto," Saunders said. "I'm extremely excited to be able to play for the Blue Jays. But it's not just about representing the Blue Jays, it's also about representing my country."

Saunders, who runs surprisingly well for a 6-foot-4, 225pound athlete, will provide a much-needed left-handed bat in the Blue Jays lineup as well as being a defensive upgrade to Cabrera in left field.

And the Blue Jays are hoping that he can regain the form he displayed in 2012 when he swatted 19 home runs, eight of them at Seattle's Safeco Field, one of the most pitcher-friendly environments in the majors.

Saunders said he is looking forward to playing half his games this coming season in the homer dome that is Rogers Centre with a lineup that features such sluggers as Jose Bautista, Edwin Encarnacion and, most recently, Josh Donaldson, the former Oakland Athletics' star third baseman who joined the team last week in the Brett Lawrie trade.

"I'm more excited about being put into that lineup that's there right now," Saunders said. "You have multiple all-stars, you have MVP finalists and guys that really know how to hit. There are certain people in the game that strike fear into you when you're on the opposing team and there are a couple different guys in that lineup that do that."

Last season was one that Saunders would just as soon forget, his playing time limited to just 78 games after making two trips to the disabled list for a shoulder strain and then a left oblique injury. Saunders would also miss time with a sore knee.

A career .231 hitter, Saunders batted .273 in 231 at-bats in 2014 and clouted eight home runs for the Mariners, who went a respectable 87-75 and were not eliminated from postseason contention until the last day of the season.

After the year was over, Zduriencik was asked about Saunders' future with the team. The GM's response was that Saunders needed to ask himself how he could prepare himself to play an entire season without injury.

"I think the comments might have come out of more frustration than anything due to the fact that we were one game away from going to the playoffs," Saunders said on Thursday. "And a question was asked by a reporter about me and that's what was said. Jack and I have had numerous conversations since then and there's been no hard feelings.

"But as far as calling my condition into question is something that I think is uncalled for. I work just as hard as anybody to prepare myself to play 162 games."

While Saunders said he is excited about the move to Toronto the father of two said his wife, Jessica, has also given her stamp of approval.

"It was funny, when we first met we were discussing where we would raise the kids and she said absolutely not in Canada, we're raising them in the U.S.," Saunders said. "And then she came to visit me when we were on the road and she said, 'Okay, I'll let you raise the kids in one spot in Canada and that's Toronto.' She was very happy about the trade as well."

Associated Graphic

Michael Saunders, whose playing time was limited last season, batted .273 while clubbing eight homers for the Mariners.


Calgary's Giordano 'keeps kicking down doors'
Tuesday, December 9, 2014 – Print Edition, Page S1

CALGARY -- Michael Futa was the general manager of the Owen Sound Attack when Mark Giordano was 18 and approaching a career crossroads. Giordano, a Tier 2 junior at the time, had enrolled at York University and was about to pick his classes when Futa came with an offer to play major junior. It was a dilemma - for the team and for Giordano.

"Because he had his college set, you had to be prepared to offer a pretty substantial education package to commit to the guy," Futa recalled. "So I went to watch him play, and then went to the [Giordano's] house [in Toronto] and sat with the family." And at that point, Futa knew Giordano had a future. "I've never met a more humble kid, someone you knew you could hang your hat on.

"I've always said he and Wayne Simmonds were the two most easy-to-read, genuine human beings I ever had, that they were going to do everything possible to get to where they had to be."

"[Giordano] is the only kid who was undrafted everywhere. We never drafted him in the [Ontario Hockey League]. We couldn't get anybody to draft him in the NHL, but he just keeps kicking down doors."

Now 31, Giordano has officially become an NHL star. The captain of the Calgary Flames - who make their only visit to Toronto this season to play the Maple Leafs Tuesday - is the league's reigning player of the month, after scoring 16 points in 13 games as the Flames went 9-4 in November. He was also plus-12, tops in the league plus-minus rankings, during that span.

Going into last night's games, he was 10th in NHL scoring overall, and tops among defencemen. Last month, when the league circulated a press release announcing the format for all-star balloting, it dropped the usual names (Sidney Crosby, Steven Stamkos, Duncan Keith, Ryan Miller) and a handful of new ones (St. Louis forward Vladimir Tarasenko, Columbus centre Ryan Johansen and Giordano).

A third of the way through the season, the Flames are unexpectedly in the playoff race in the Western Conference. Despite a 3-2 loss to the San Jose Sharks Saturday night that snapped a fourgame winning streak, Calgary is third in the Pacific Division.

According to coach Bob Hartley, Giordano is a big part of the reason the Flames are off to such a good start, as he sets the tone every day - at practice and in games - with the blue-collar style that's made them so successful.

He's modest to a fault, and so even though he's starting to get a lot of individual attention for the season he's having, he deflects most questions about his performance and impact, and credits team play and their system.

"Honestly, I just try to play my game," he said. "I'd rather not look or read or watch things like that."

Far from an overnight sensation, Giordano didn't stick with the Flames straight out of junior.

He had stints in the American Hockey League and a season over in Russia before becoming a regular in Calgary. And while he's played in his hometown before, against the team he grew up cheering for, this is the first time he returns as a star.

"I remember my first game at Maple Leaf Gardens - my dad somehow got tickets, we were way up in the greys," Giordano said. "I was a young kid - five or six years old - and I'll never forget it. They were playing the Penguins. They lost 8-6, but that building was unbelievable, the atmosphere. Growing up, I was just a big, huge Leaf fan."

He plans to avoid the spotlight during off hours in Toronto. "I'm going to go and see my family."

According to Futa, now the vice-president of hockey operations for the Los Angeles Kings, when Giordano arrived for his first training camp in Owen Sound, he didn't even have matching equipment.

"I remember the owner's looking at me like, 'Who is this guy?' because this guy comes out on the ice looking like he's playing for Vic's Video in the Sunday night league," Futa recalls. "He ended up having an unbelievable year for us, and by the time he was done, he was the OHL overage player of the year and Calgary [scout] Tommy Webster loved him to death.

"It would have been the easiest sneaky fix ever if I was in the National Hockey League at the time. He wouldn't have been going anywhere but where I was working. You knew he was going to play. Then it was just a matter of letting his natural personality, leadership, fitness, commitment and everything else kick in - and see where the ceiling ends up."

Follow me on Twitter:@eduhatschek

Associated Graphic

Mark Giordano

According to Flames coach Bob Hartley, Mark Giordano is a big part of why the team is off to such a good start.


Two goalies and one crease, but zero controversy
The Canadian Press
Saturday, December 13, 2014 – Print Edition, Page S4

TORONTO -- Netminders Zach Fucale and Eric Comrie have already locked down spots on the Canadian world junior team.

What's far less certain is who will get the nod when Canada opens tournament play Dec. 26 against Slovakia. Head coach Benoît Groulx said Friday that the starting job is up for grabs.

"They're on the team, but they've got to compete and they've got to prove themselves," Groulx said. "They've got to have the right attitude and so far we're very pleased with Eric and Zach because they're both competitors.

You can tell they enjoy the game.

They love to compete and they love to be out there.

"I think that's what we need and it's a healthy competition among the two of them."

As team brass did last year, Canada finalized its goalies in advance. A third goalie could always be added during the tournament if needed.

That takes a little pressure off the netminders in the buildup to the Dec. 26-Jan. 5 world junior hockey championship in Montreal and Toronto. The other 28 players in camp will battle it out for the remaining 20 roster spots.

Fucale appears to be the favourite to land the first starting assignment.

The Halifax Mooseheads goalie was on the team at last year's tournament in Malmo, Sweden, where Canada settled for a fourthplace finish. Fucale was also drafted in the second round (36th overall) of the 2013 NHL Entry Draft by the Montreal Canadiens and is from Rosemère, Que.

So it would seem logical that he'd play Canada's opening group stage game, given that it will be at the Bell Centre. However, Groulx said the job is open and the netminders' performances in practice and exhibition games over the next two weeks will be key.

"We believe in both of them and we've been evaluating them for two years," he said. "The evaluation process is still an ongoing process every day."

The two goaltenders are quite similar. Both are 19 years old, both are 6-foot-1, and both weigh about 180 pounds. They were both drafted in the second round last year, with Comrie taken 59th overall by the Winnipeg Jets.

They have posted similar statistics this season and have been teammates at various tournaments in the past. They're also roommates and good friends.

So while the battle is underway, there does not appear to be any tension. They're both saying the right things and seem very supportive of each other and the team.

"I'm not looking at it as a competition," said Comrie, who's from Edmonton and plays for the Tri-City Americans. "I'm looking at it as we're a team here. We're building towards one single goal.

We're not fighting against each other to reach a gold medal. We're fighting with each other to reach a gold medal."

Groulx said each goalie will get a start when Canada plays exhibition games against the CIS Toronto Selects this weekend before heading to St. Catharines, Ont., for pre-competition camp.

"Me and Eric, we have a lot in common," Fucale said. "One of those things is we're team players and we just want to help the team every time we get out there. It's good that we're on the same page and we have the same goal in mind. I think that's very good for the team."

Canada is hoping to end a fiveyear gold medal drought at the tournament. Fucale, one of seven returning players from last year's team, said he has made strides over the past 12 months.

"I have become better mentally, stronger physically and technically everything has got better," he said. "I feel very good. I feel great coming into this event. It's a great opportunity once again. I'm just looking forward to the whole experience and living in the moment."

Groulx put the players through a tough 90-minute workout Friday morning at MasterCard Centre. It was the first full team workout as seven players missed the opening session a night earlier due to travel delays.

A timeline for player cuts has not been finalized. There could also be some late additions since NHL clubs have until the Dec. 19 roster freeze to decide whether they will lend players to the team.

Despite beefed-up national broadcast schedule, regional blackouts puzzle Canadian TV viewers
Thursday, December 11, 2014 – Print Edition, Page S1

Understanding the regional blackouts appears to be the No. 1 problem for Canadian television viewers in the first year of the NHL's national broadcast rights coming under the control of Rogers Communications Inc.

More games are being shown nationally on Rogers networks as well as the CBC, but judging by the reaction from people who read a recent Globe and Mail story on the mixed results in the ratings after the first two months of the season, many of them are frustrated that some games are still blacked out in their markets.

This is probably the result of a combination of factors, from Rogers' enthusiastic promotions that promised more games than ever before - which may have resulted in some viewers assuming that just about every game would be televised - to flawed listings that fail to indicate which games are blacked out in which markets.

In simple terms, the NHL does not allow the broad distribution of one team's games in another team's market area. The idea is to maximize the price for each team's regional broadcast rights, which are sold in packages separate from the 12-year, $5.2-billion national deal that Rogers struck with the NHL. For example, the league believes that if it allowed every Toronto Maple Leafs game to be shown in Vancouver, it would drive down the price of the Canucks' regional broadcast package.

However, many games are designated as national broadcasts - 350 this season on the Rogers networks and the CBC - and they can be seen across the country, generally on Wednesday, Saturday and Sunday nights. The regional games are shown on the networks that bought them from the individual teams. In Canada, the regional English rights for the Montreal Canadiens, Canucks, Edmonton Oilers, Calgary Flames and some of the Leafs games are held by Rogers in addition to the national package. Rogers says it added 10 Canucks, Oilers, Flames and Habs games to the national broadcasts this season because it owns their regional rights as well.

TSN, owned by Rogers rival BCE Inc., has the rights to 26 Leafs games in addition to the Ottawa Senators and the Winnipeg Jets. BCE also holds the regional French rights to the Senators and Canadiens through RDS.

There are two ways around the regional blackouts - but both cost money, of course. One is a subscription to NHL Centre Ice, the cable package that carries all the regional broadcasts that are blacked out in certain areas on conventional channels. With Rogers cable, that will cost $219 for the full NHL regular season (playoff games are all available on regular channels) or, if you wait until Jan. 1 to sign up, $139 for a half-season. Prices are similar with Bell and other cable providers.

The second solution is a subscription to Rogers NHL GameCentre LIVE, a videostreaming service. This can be purchased even if your Internet or wireless provider is not Rogers. A full season costs about $200, but again the price can be prorated if it is bought later in the season.

There is one catch here: Rogers is offering the service free to its Internet and wireless data customers until Dec. 31 and for the rest of the season on a couple of other wireless and Internet packages.

While the GameCentre LIVE package is cheaper than NHL Centre Ice, Canadian regional games that belong to TSN and other Rogers rivals are blacked out on GameCentre LIVE.

Some of the unhappiness of viewers was caused by mistakes in the television listings, which generally are provided to media outlets by an outside company.

On Nov. 4, the Chicago Blackhawks were in Montreal to play the Canadiens, an attractive game between two top teams. Many listings, including Rogers', did not indicate that the game was blacked out in other parts of Canada, including Ontario, which upset a lot of viewers who had tuned in to the Sportsnet channel carrying the game.

An unscientific survey of online television listings showed it is hitand-miss when it comes to noting specific blackouts. But a Rogers spokeswoman said the company shows which games are subject to blackouts on the Sportsnet listings at

Patterson continues his hot shooting
Second unit drives Raptors' success despite DeRozan's absence due to injury
Tuesday, December 16, 2014 – Print Edition, Page S2

TORONTO -- For much of Monday night in Toronto, it felt like a big upset was brewing, like the Toronto Raptors might not find a way to win this time.

After going without a field goal for the final six minutes of the first half and allowing the Orlando Magic to seize an eightpoint lead, it looked as if the Raptors might lose to the young Magic for the first time in nine meetings. But as they often do, the Eastern Conference-leading Raptors woke up down the stretch and escaped with a 95-82 win, their second in as many nights as they improved to 19-6.

Dwane Casey's words before Monday's game served as foreshadowing. The Raptors coach spoke of the last time the Orlando Magic visited the Air Canada Centre, on Nov. 11, and it just seemed like the sort of polite thing the coach of a heavily favoured team would say about a plucky, young opponent well down in the standings. The Magic had "ambushed" Toronto during their last visit with a 33-point first quarter, Casey warned; they were playing well at the moment; they were a squad well ahead of other NBA teams with young talent; they could attack off the dribble if the Raptors weren't in the right defensive mindset.

But in fact this home contest against the 10-16 Magic should have been a gimme.

The Raptors, coming off an overtime win over New York in the Big Apple the night before, jumped out to an early lead on Monday. They were ahead 28-25 after the first quarter, but then things fell apart.

Toronto had been scoring at a good rate, but Tyler Hansbrough's lay-in with 6:52 left in the quarter would be the team's last field goal of the half. The Raptors went totally dry from the field in the final six minutes, allowing Orlando's Ben Gordon and Tobias Harris to score at will while their own shots refused to fall. DeMar DeRozan sat courtside in a tan blazer, beside the team's coaches, still sidelined with that nagging groin injury, and the team seemed to be missing him more than ever. The Raptors allowed their young opponents to take a 52-44 lead into the half.

But the Raptors quickly regained control in the third quarter. Kyle Lowry, who had just six points in the first half, exploded for eight more right away. Then Toronto's reserves stepped up: James Johnson made timely buckets, and Patrick Patterson started to hit threes like he had the night before in New York. Toronto built a 71-65 lead as the final quarter began, and then stretched it to a 10-point cushion.

Lou Williams led the way for Toronto with 18 points; Lowry finished the night with 17 and added eight assists. Amir Johnson contributed 11 points, while Patterson had 10 to go with six assists.

Patterson is standing out on scouting reports lately, especially after his defensive performance on Carmelo Anthony in New York. He has scored in double-digits in nine of his last 10 games. Coming into Monday, he had shot .645 (20 for 31) from the field over the last four games, which is the best shooting percentage in the NBA during that span.

"He's shooting the ball extremely well, better than the first time we saw him and better again than the second time we saw him," said Magic coach Jacque Vaughn. "He's a guy who's on your scouting report because you have to play a little differently, whether you'll put a small on him or a big on him - his ability to stretch the floor.

He's shooting very confidently right now, and that second unit is one of the best in the league."

Next up, the Raptors will host the Brooklyn Nets on Wednesday, which is Drake Night at the Air Canada Centre.

Associated Graphic

Toronto Raptors forward Tyler Hansbrough shoots past Orlando Magic forward Channing Frye during first-half action in Toronto on Monday.


Bye bye, birdie Cabrera flies off to Chicago's South Side
Monday, December 15, 2014 – Print Edition, Page S1

TORONTO -- It was September in Boston and members of the media were kept waiting for what seemed an eternity until Melky Cabrera presented himself to talk about a broken right pinky finger that had ended his season prematurely.

Most of the interview was conducted in Spanish, with third base coach Luis Rivera translating the left fielder's answers into English.

At the end of the session, Cabrera - who could speak and understand English better than he let on - was asked if he wanted to stay in Toronto, And he was asked if he could respond in English, to make the television cameras happy.

"I stay in Toronto," Cabrera said.

You want to stay, a reporter asked?

"Yeah," Cabrera answered.

The 30-year-old may have been responding truthfully, that he wanted to be a part of a Toronto Blue Jays organization that took a chance on him two years earlier when he signed a deal after a steroid controversy.

What else was he going to say, really?

But in the end, Cabrera let his pocketbook dictate his future and on Sunday it was reported that the free agent has agreed to terms on a new three-year, $42million (all figures U.S.) deal with the Chicago White Sox.

The White Sox have not confirmed the signing which, according to, will not become official until Cabrera passes a physical exam that is to take place early next week.

The terms of the contract were actually surprising since it was felt that Cabrera, who turned down a qualifying offer of $15.3-million for one season from the Jays, was seeking a new deal that would extend at least four to five years.

Still, it is a substantial raise from the two-year, $16-million deal he signed with the Blue Jays following the 2012 season. That came after Cabrera was suspended for 50 games by MLB following a positive test for testosterone.

The acquisition of Cabrera concludes a busy week for the revamping White Sox after trading for pitcher Jeff Samardzija and the signing of free-agent reliever David Robertson.

The Blue Jays effectively terminated any hopes of re-signing Cabrera earlier in the month when they traded starting pitcher J.A. Happ to the Seattle Mariners in exchange for Michael Saunders.

At the time of the trade the Victoria native was told by general manager Alex Anthopoulos that he would be Toronto's everyday left fielder for 2015.

After a disastrous 2013 campaign where his performance was compromised by a benign tumor that was discovered in his back after the season had concluded, Cabrera made an impressive comeback for Toronto this past season.

Batting second in the order ahead of Jose Bautista, Cabrera, a switch-hitter, batted .301 with a .351 on-base percentage with 16 homer runs and 73 runs batted in.

Cabrera played in 139 games before his injury and, despite his limited range, was surprisingly effective defensively in the outfield.

His 13 outfield assists was second only among American League left fielders to Yoenis Cespedes, who amassed 16 over the course of the season with the Oakland Athletics and then the Boston Red Sox.

While the Blue Jays will miss Cabrera's bat, they will be getting a defensive upgrade in left with the fleet-footed Saunders. The team is hoping that Saunders will be able to revert to the offensive form he displayed in 2012, when he swatted 19 home runs and batted .247.

In an injury-marred 2014 that limited him to 78 games, Saunders batted .273.

And Saunders certainly comes cheaper than Cabrera. He is projected to earn approximately $4-million through arbitration.

The one upside to Cabrera signing with the White Sox is that the Blue Jays will receive a valuable compensatory pick after the first round in the 2015 draft.

The Blue Jays had lost their first-round pick to the Pittsburgh Pirates after they signed freeagent catcher Russell Martin.

Associated Graphic


Mumps is the word as players face off against league epidemic
The Associated Press
Friday, December 12, 2014 – Print Edition, Page S2

NEW YORK -- Once mumps invades a professional sports dressing room, it finds a fertile breeding ground and the NHL is finding that it is not easy to get rid of.

Multiple players on multiple teams from coast to coast have come down with the mumps, an illness more typically associated with children.

It started in Anaheim and plagued the Ducks, who had three players affected. The Minnesota Wild were next, with five victims. Tanner Glass of the New York Rangers then came down with it, and as recently as Wednesday, the New Jersey Devils had two players turn up sick.

The Ducks hosted the Wild in mid-October, New Jersey and the Rangers played each other a few days later and Minnesota visited the Rangers not long after that before facing the Devils in midNovember.

"You see the hits that they have, and sometimes the spraying of saliva," said Dr. Judith Aberg, chief of the infectious diseases division at the Icahn School of Medicine at Mount Sinai Hospital in New York. "I think they are high risk. I am surprised we haven't actually seen this before."

The illness isn't just hitting hockey players, of course. Students on college campuses have also recently fallen victim in another close environment that promotes spreading of the very contagious virus.

"It is relatively uncommon since the vaccine was licensed in the early 1960s, but this year we've actually had more cases," Aberg said. "In 2013, we had less than 500 cases, and already this year we're looking at about 1,000 cases in the United States. One person is expected to infect 10 others."

Millions are vaccinated at a young age, but Aberg said the immunity can wane with age and "10 to 20 per cent of individuals who have been vaccinated may not have full protection."

The NHL and the players' association have provided information to teams and players on ways to protect themselves against the mumps. Vaccination decisions for any disease are made by club medical staffs and the players themselves. The Rangers quickly moved to give boosters to players, and other teams have done the same. The Ducks cleaned and sterilized their entire operation following the outbreak that hit Corey Perry and others.

"Simple coughing and sneezing and getting those respiratory droplets on each other can cause the spread of mumps," Aberg said.

"The problem is that it is contagious before you have symptoms.

That's where it gets tricky because you don't know you're going to come down with the mumps, and you're contagious.

Then you are contagious for five days or so after you have symptoms."

The illness even felled Minnesota iron man defenceman Ryan Suter, the rare American-born player to be affected.

Suter, who hadn't missed a game since joining the Wild in 2012, led the NHL in ice time each of the past two seasons.

"I probably wash my hands more than anybody," he said. "I go out of the way to make sure I'm a clean guy. So for me to get it, it stunk. I always tell these guys, 'You've got to be mentally strong and you'll never get sick.' So they're all giving me a hard time."

Time machine With Classic, BlackBerry goes back to the future
Saturday, December 13, 2014 – Print Edition, Page B1

John Chen is about to put in place the last piece of his turnaround plan for BlackBerry Ltd. by doing something almost unheard of in the smartphone business, or the tech industry in general: launching a flagship product with old features the company previously abandoned in the name of progress.

On Wednesday, the chief executive officer of the Waterloo, Ont.based company will unveil the Classic, a smartphone aimed at its most die-hard, change-averse customers: executives and other keyboard-dependent "power users" who have held on to their aging BlackBerry Bold phones rather than upgrade to the company's newer touchscreen products. Mr. Chen will make the point by unveiling the Classic in the museum-like Italian neo-Renaissancestyle surroundings of Cipriani, a restaurant in New York's financial district with painted ceilings and marble columns.

The Classic will restore familiar BlackBerry features like the "belt" - a row of four physical keys for calls, accessing menus and going back one step, anchored by a mouse-like trackpad. The company is also bringing back many keyboard-based shortcuts that were mainstays on older BlackBerrys, such as typing C to compose a message. Those features disappeared from newer "BlackBerry 10" smartphones in 2013.

This is more than tinkering with product features: It is the centrepiece of Mr. Chen's effort to reconnect the struggling firm, which once ruled the smartphone market, with core customers it ignored in its push to match Apple and Android touchscreen devices. Gone is the pursuit of consumers; back is a focus on business people who mainly use smartphones for typing e-mails, and on serving the needs of employers who manage fleets of smartphones, whether or not they are BlackBerrys.

Mr. Chen, 13 months into his BlackBerry rescue attempt, has vowed to win back business and government customers by improving the company's software and services offerings and also by improving its smartphones. He launched Passport, an oversized smartphone aimed at business users in September, but the Classic is his attempt to offer something familiar to old friends.

In an open letter this fall, Mr. Chen said he was guided by the adage, "If it ain't broke, don't fix it," and recently told reporters: "I've spoken to a lot of people and they want it; a lot of people say 'I am waiting for this.'"

But is the Classic the right product to bring BlackBerry back to the smartphone fore? Or will it calcify the company's reputation as a has-been and herald its exit from making phones altogether? Even insiders aren't sure.

"A small subset [of users] will be pleased, but the overall market has completely moved past what this product will offer," said one former senior executive who worked under Mr. Chen. "This is a short-term capitalization play: They can meet [pent-up] demand and probably make some money off it. ... But my overall thesis is that BlackBerry will be out of handsets at some point."

Courting loyalists

Kristina Rogers is the kind of customer John Chen has in mind for Classic. Ms. Rogers, a Canadian based in Istanbul who heads the consumer products group of consulting giant Ernst & Young, now known as EY, is a diehard BlackBerry user who has made do with the all-touchscreen Z10 since 2013. But as a travelling executive who writes many e-mails, she misses the keyboard and plans to upgrade to a Classic.

"People who are actually typing still appreciate the tactile feeling of the buttons," she said. Judging by all the people she sees using old BlackBerrys or keyboard accessories for iPads in airports, Ms. Rogers expects many others will do the same. One such user is Peter Brorsen, deputy executive director of the European Institute of Peace in Brussels, who has used BlackBerrys for a decade. He never upgraded to BlackBerry 10 and considered leaving the fold "but I couldn't really find an alternative.

"Maybe we'll finally get a modern phone that's useful at work, too," he said of the Classic.

Mr. Chen believes there are millions of people like them. He has set a relatively modest target for BlackBerry's hardware division: If it can sell 10 million handsets a year, it will break even. If not, it shouldn't be in the phone business. That's a sliver of the global market (BlackBerry, which sold 3.7 million handsets to end users in the first half of this year, has less than a 1-per-cent market share), but even that could be a struggle; Morgan Stanley analyst James Faucette estimates the company will sell only eight million handsets next year, that division will lose $180-million (U.S.), and BlackBerry will struggle to meet its other revenue targets.

BlackBerry has fallen steadily in the smartphone race since Apple released the iPhone seven years ago. After trying unsuccessfully to compete with touchscreen phones built on its old software, then-co-CEO Mike Lazaridis decided BlackBerry needed a new operating system. But BlackBerry 10 took longer to develop than promised and was conceived at a moment when the leadership was split; Mr. Lazaridis wanted to focus on handsets while co-CEO Jim Balsillie favoured repositioning around offering software and services to carriers. Their successor Thorsten Heins chose hardware, but Mr. Lazaridis, then on the board, grew disillusioned when the new management focused on touchscreens at the expense of its flagship keyboard products.

That was followed by a disastrous launch of BlackBerry 10 in early 2013. Consumers were indifferent to the all-touch Z10 and many long-time power users were bewildered by the Q10, which had a keyboard but was missing popular mainstays like the belt. The user experience was different and non-intuitive compared with past BlackBerrys; customers couldn't figure out how to perform basic functions, including cutting and pasting, and even answering the phone.

"It was such a foreign experience, [long-time users] literally threw up onto it," one former senior insider quipped. Insiders say the company has sold fewer than seven million BlackBerry 10 devices to end users; at its peak four years ago, it shipped nearly twice as many smartphones in one quarter.

Weeks after the BlackBerry 10 launch, U.S. wireless giant Verizon gave the company a list of seven items it suggested should be changed immediately to make the devices more appealing, one former senior insider said. That included restoring the "back" button. BlackBerry's software engineers felt it was no longer needed because of touchscreen functions, but carriers and customers wanted it back. "Verizon got real pointed with us," the insider said. "They stripped us down."

It wasn't until Mr. Chen arrived that those concerns had the CEO's full attention. When Mr. Chen met with CEO-level BlackBerry users, many told him the Bold 9900, released in 2011, three years after the original Bold, was the best product the company ever made - even though it supported few apps and featured a sluggish Internet browsing experience. Mr. Chen decided the company should make a phone that ran on the new operating system but restored the physical keys and functions core users missed that made a BlackBerry feel like a BlackBerry.

"I still would like the user to experience all the new features," Mr. Chen said in an interview this year. "[Launching the Classic] is my statement to tell the world that we value our customers, we understand why some of the discontinuity happened, we are trying to bridge that particular gap."

Mr. Chen killed every other product in development except Passport (a product he initially didn't like but which was well advanced in development) soon after his arrival and directed his engineers to deliver the Classic as soon as possible. Developers initially struggled to meet his demanding timeline. Early models were "so ugly, like a child's flip-flop" sandal with a big rounded top, one insider said.

The Classic is now rectangular and a bit taller than the 4.7 inchlong Q10. Meanwhile, developers had to write a lot of code on top of the new touch-oriented operating system to ensure the physical buttons functioned properly.

What BlackBerry has produced, based on company previews and early reviews of the Classic, looks to be a sturdy smartphone that is far from cutting edge, but may be enough of an advance to impress old-fashioned users. The device has an eight-megapixel camera (industry standard on new smartphones, including Passport, is now 13); the screen, at 3.5 inches diagonally, is smaller than the five-inch standard on top-selling "phablet" smartphones, but much bigger than the Bold 9900 (2.8 inches) and the Q10 (3.1 inches). While the company has improved its app offerings by making Amazon's array of Android programs available, it still lags rival platforms. Its touch pad will not work properly in many Android applications as the programs were built for touchscreens and not with physical buttons in mind, tech blogger and app developer Eric Harty said in a recent posting.

"There's probably a segment of loyalists" who will like Classic and see it as an upgraded Bold, said John McKinley, former chief technology officer with several Fortune 1000 companies, including Merrill Lynch. But "I don't think this gets you new customer" demand, he added.

A big question is whether core users like banks and governments will order the device in big numbers. Sources at three Canadian banks say they haven't rushed to make major orders, and are increasingly letting employees pick their own smartphones. Many are choosing Apple's iPhone 6.

"One of the mistakes that BlackBerry made was to move away from their loyal customer base," independent technology analyst Rob Enderle said. "The result was that they lost a lot of customers to Android and Apple - because if you have to relearn something anyway, you might as well learn something totally new" and it will be hard to win them back. The Classic, he added, "is the phone they should have led with two to three years ago."

Some insiders who recently left the company aren't convinced that trying to right a historic wrong is the right answer for BlackBerry.

"It's such a nondescript offer that the only people who will be interested are those who are genuinely mourning the loss of a Bold," one said. "Of the people who say they're interested, only a fraction of them will actually follow through. I do believe it will be a letdown." Another said users expecting an updated Bold might be put off.

"The pitch is familiarity. The story sounds good. But it's still a completely different operating system." Besides, the source added, it is likely to appeal to "a small market. What you are left with are people who don't want to learn something new. It's not a bad idea to go in and grab some of those users, at least for one product cycle."

Will it be enough to keep BlackBerry in the devices business? "I don't necessarily see the Classic being a saviour," said Desmond Lau, an analyst with Veritas Investment Research. "BlackBerry needs to keep innovating every year."

Associated Graphic

BlackBerry CEO John Chen: 'A lot of people say "I am waiting for this."'


The BlackBerry Classic, held by CEO John Chen, restores familiar features like the 'belt' - a row of four physical keys for calls, menus and going back one step, that had disappeared from the Q10, top.


Billable milliseconds? Meet Ross, lawyer of the future
Friday, December 12, 2014 – Print Edition, Page B1

In the next few years, there may be a new junior associate, called Ross, working at a Bay Street law firm. He will handle legal research on big cases, and the senior partners are really going to like him: He is quiet, works orders-of-magnitude faster than any other lawyer on Earth and has a steel-trap mind. He even won a TV quiz show a few years ago.

This new associate, however, is lousy company at the law firm's cocktail events. That's because he is a computer program.

Ross is the brainchild of a group of University of Toronto students given access to Watson, the artificially intelligent computer system developed by International Business Machines Corp. that made headlines with its victory on the TV quiz show Jeopardy! in 2011. Instead of feeding Watson a diet of general knowledge, they trained its powers on a body of Ontario corporate law decisions and statutes.

"Basically, what we built is the best legal researcher available," explains Ross co-founder Andrew Arruda, 25, a University of Saskatchewan law graduate who is articling at Toronto law firm Azevedo & Nelson. "It's able to do what it would take lawyers hours to do in seconds."

The idea of using artificial intelligence to transform the practice of law has attracted a lot of attention in recent years. Some U.S. legal startups and researchers have been using computer analysis of databases of past cases to predict outcomes of future ones.

And specialized, artificially intelligent software can now "learn" as it combs though millions of e-mails to find relevant information before high-stakes litigation.

Since the success on Jeopardy!, IBM has been putting Watson's ability to sift through billions of pages of data in seconds to use in other areas. A medical application processes mountains of medical research for doctors helping cancer patients, even offering recommended treatments.

A Guelph, Ont.-based outfit, LifeLearn Inc., has developed a similar app for veterinarians. In one experiment, Watson was used as a robot corporate director, listening in on a mock board meeting and offering recommendations on what to do. Efforts to bring Watson and what is known as "cognitive computing" to the legal world, while under way, are not yet as advanced.

But Ross, and other similar efforts being spearheaded by IBM, may help change that. This year, IBM offered 10 top universities - U of T is the only one outside the United States - access to its Watson system remotely, using cloud computing. U of T held a competition, selecting Ross as the winner to face teams from the other nine schools in New York in January.

At stake is $100,000 in seed money and continued access to Watson. All five of U of T's student teams competed with different legal applications for Watson: One, called Divorcesay, was an online app to help you split with your spouse. Ross won, based not only on its use of the technology but on its business plan.

Here's how Ross's creators say it works: You ask it a legal question, and it spits out an answer, citing a legal case, providing some relevant readings and a percentage number indicating how confident Ross is he got it right. If a new case that might be relevant to your question comes into the database, Ross knows right away and alerts you on your smartphone, perhaps as you are heading to court.

"When we are short of time, we just say it is Siri for lawyers," says Ross team computer engineer Jimoh Ovbiagele, 21, referring to the Apple iPhone's talking concierge program. He adds that "Watson is a lot smarter than Siri."

Mr. Ovbiagele, who is also lead engineer at a tech consulting firm and has previously worked on predictive text technology and self-driving cars, says the goal is not to replace lawyers, but to help them do better work.

He compares the concept to "centaur" chess tournaments, where human players are allowed to consult chess computers on their moves. These socalled "centaurs" tend to beat both computers or humans acting alone.

Rick Power, IBM's Watson business leader for Canada, said the impetus for IBM's project involving the universities was to start to build up an "ecosystem" of developers familiar with Watson and finding new ways to use the technology.

Watson, which is physically the size of three pizza boxes, is available through IBM's cloud computing system without needing to be physically present. And next year, Mr. Power said, the program that spawned Ross is set to be expanded to involve 100 universities: "We feel that Watson is really the dawn of an era of cognitive computing."

Associated Graphic

From left, Akash Venkat, Andrew Arruda and Pargles Dall'Oglio are three members of a U of T team developing an artificially intelligent legal researcher using IBM's Watson.


Stock rout tests Canada's image as a safe haven
Saturday, December 6, 2014 – Print Edition, Page B1

After Canadian stocks were pounded this week amid relative calm elsewhere, investors are starting to ask themselves an uncomfortable question: Has Canada's stock market become a chronic laggard?

The benchmark S&P/TSX composite index has staged a sudden reversal of fortune, largely due to broad sell-offs in the key energy and financial sectors. The index has dropped 4.2 per cent in the past two weeks, including Thursday's 284-point plunge - its worst one-day decline in over a year.

Over that time, the TSX has been hit by four triple-digit declines for a net loss of more than 600 points, even as the S&P 500 closed this week at a fresh record high.

"The two respective equity markets are seemingly going in polar opposite directions of late," Doug Porter, chief economist at BMO Nesbitt Burns, said in a note.

Investors can blame much of the current bout of turbulence on crude oil's collapse and its impact on Canadian energy producers. But the bigger picture isn't looking much better.

The financial crisis gave investors a feeling that the Canadian market was one of the safest.

Far from collapsing, Canadian banks never even cut their dividends. Commodity prices were hammered but they rebounded just as fast, putting Canadian energy producers and miners back on course for the so-called commodities supercycle.

Now, "safe" is the last word you should use to describe Canada.

Crude oil has fallen nearly 40 per cent since the summer, dragging energy stocks into a bear market. Canadian Oil Sands Ltd., a company that defines the sector, has cut its dividend dramatically in an effort to buttress its balance sheet.

There are problems elsewhere, too. Gold miners are suffering from high expenses and lower gold prices. And those rock-solid Canadian banks are turning cautious about their earnings outlook for the upcoming year, due to low interest rates and high consumer debt levels.

If that looks like a collection of near-term concerns that will blow over, look again: Longer-term performance numbers suggest that the Canadian stock market can challenge an investor's patience.

Canadian stocks are lagging the gains in U.S. stocks in 2014, putting them on track for their fourth-straight year of underperformance.

The TSX has risen 6.3 per cent, lagging the 12.3-per-cent gain for the S&P 500. In U.S. dollar terms, the TSX is down 1.3 per cent for the year because the loonie has fallen sharply next to the greenback.

One bad year can be dismissed as a fluke. Even the past five years - a period in which the TSX has lagged the S&P 500 by about 60 percentage points, without factoring in currency changes - can be explained away by extraordinary monetary policies from the U.S. Federal Reserve and a global fascination with U.S. assets.

But how do you explain the fact that Canadian stocks have also underperformed over the past 10-year, 20-year and 30-year periods, the latter by a whopping 640 percentage points? The S&P 500 has risen a total of about 1,164 per cent since November, 1984, or 11.4 per cent a year on average (not factoring in dividends). The TSX has gained just 523 per cent or an average of 6.3 per cent a year.

If you own a mutual fund or exchange-traded fund that tracks the index, or one that closely resembles it, your portfolio is also lagging.

This underperformance wouldn't be a problem if investors devoted a relatively small portion of their financial assets to the Canadian stock market, which accounts for just 4 per cent of the world's market capitalization.

But like many of the world's investors, Canadians have a home-country bias and invest a disproportionate amount of money in Canadian stocks - about 60 per cent of their equity holdings, according to a recent study by Vanguard.

The S&P/TSX composite index is often criticized for being an undiversified index that relies far too much on commodity producers and financials. Together, these areas represent nearly 70 per cent of the index in terms of their market capitalization.

There's another related problem: The index is skewed toward cyclical sectors that tend to rise and fall with the business cycle, rewarding nimble (or lucky) investors who can time their entries and exits but punishing investors who prefer to buy and hold.

The Canadian stock market has a lot going for it, especially when commodity producers and financials are firing on all cylinders.

Now, its flaws are showing.

As loan growth slips, BMO looks to the U.S. for profits
Wednesday, December 3, 2014 – Print Edition, Page B1

After spending heavily south of the border, Bank of Montreal will lean on its U.S. operations to combat a slowing Canadian market and soaring technology and regulatory costs.

As Canadians curtail their borrowing, the country's biggest banks have watched growth rates on their personal lending portfolios fall to low single digits. Until now, BMO had been an outlier, churning out impressive lending growth.

But during the fourth quarter, the bank fell in line with its peers with personal lending growing just 1 per cent, quarter over quarter. At the same time, BMO's expenses have skyrocketed. The bank's revenue climbed 8 per cent in the quarter from the year prior, but expenditures jumped 14 per cent.

Finding the right means to counteract these forces is crucial for BMO because its earnings growth has been muted. Profit in fiscal 2014, which ended Oct. 31, climbed 3 per cent from the previous year and jumped only 1 per cent from 2012 to 2013. The bank's return on equity (ROE) amounted to 14 per cent in fiscal 2014, shy of its 15-per-cent target.

On Tuesday, chief executive officer Bill Downe stressed that the best way for BMO to fight through these headwinds is to look south, where the bank has invested in capital markets operations and personal and commercial banking, largely through the acquisition of Marshall & Ilsley for $4.1-billion (U.S.) in 2010.

BMO has hired investment bankers to build out its underwriting and advisory business, and the bank is also optimistic that the tough market for commercial lending will ease.

The bank's commercial loan growth south of the border is already impressive, climbing 17 per cent year over year. But the division's profits have suffered from fierce competition that has weighed on margins. Mr. Downe believes this pressure is starting to ease.

"We have earned our way through pricing declines in the market," he said. "Our own view is that those headwinds ... have abated and that that business should be able to show good ROE [and] revenue growth."

Mr. Downe also stressed that some of the expenses incurred during fiscal 2014 should help to improve the efficiency of its regulatory reporting, which all banks have said is an expensive endeavour in the wake of the financial crisis.

BMO's fourth-quarter profit totalled $1.07-billion (Canadian), almost the exact same amount reported a year ago. Earnings per share totalled $1.56, or $1.63 after stripping out one-time items - falling short of analyst estimates by 5 cents a share.

There were bright spots in the earnings. Canadian personal and commercial banking capped off a strong year that saw annual earnings climb to more than $2-billion for the first time, after stripping out one-time items.

Wealth management assets jumped 17 per cent, even after excluding assets from the acquisition of Britain's F&C Asset Management this year for $1.2-billion.

The bank also raised its quarterly dividend by 2 cents to 80 cents.

However, the quarter was widely viewed to have had a lot of "moving parts," making it hard to spot overall momentum. Earnings in the bank's capital markets operations dropped 12 per cent from the same period a year ago, and 38 per cent from the previous quarter. The sudden slump stemmed from a one-time $39million charge related to its derivatives portfolio, as well as volatile bond markets that scared clients in September and October.

Before the latest set of earnings, BMO, like many of its peers, benefited from booming capital markets and wealth management revenues. Hot markets made it much more likely for companies to raise cash or strike a deal, which helped investment banks earn advisory fees, and banks earned bigger money management fees as equity values rose.

Some banks relied on growth in these fees to mask slower personal and commercial banking growth, but BMO's domestic retail operations stood out for much of the year, sporting personal loan growth in the mid-tohigh single digits. Although the bank was historically known for commercial lending, Mr. Downe has pushed hard to expand its retail banking presence by being aggressive in areas such as mortgage pricing.

The benefits from this strategy may not be as bountiful in the near future. "Against the backdrop of a cooling housing market, consumer de-leveraging and quarterly loan growth averaging 1 per cent this year, our outlook for earnings growth remains tempered over the near term," Barclays Capital analyst John Aiken wrote in a note to clients.

Bank of Montreal (BMO) Close: $81.42, down $1.87

The costly seduction of private-public partnerships
Monday, December 15, 2014 – Print Edition, Page B1


Revelations that cash-strapped Ontario may have squandered as much as $8-billion on dozens of infrastructure projects is shocking enough.

But the real stunner for taxpayers is that the province, and governments across the country, risk repeating the same costly mistakes on hundreds of future projects.

Governments in Canada have become seduced by the wonders of private-public partnerships - so-called P3s - and blind to their potentially costly flaws. In a typical P3 project, the government pays a private sector group to build, finance and operate everything from transit lines to hospitals, sometimes over decades.

These projects almost always cost significantly more than if governments just put up the money themselves and hired contractors to build the same infrastructure, under conventional contracts. Ontario Auditor-General Bonnie Lysyk found the province may have overpaid $8-billion for 74 major infrastructure projects, dating back nine years.

A key factor is financing. Private-sector companies can't borrow as cheaply as governments, adding significantly to the cost, especially on contracts that may run for decades.

Other transaction costs are also typically higher with P3s. But the biggest variable is the substantial price tag put on the risk shifted from governments to the private sector. Ontario is convinced the risks of cost overruns, delays, design flaws and the like are substantially lower with public-private partnerships, and it's willing to pay a premium for that peace of mind.

Unfortunately, the government has struggled to accurately price that risk, relying on the murky and potentially inflated calculations of outside consultants. As Ontario Economic Development Minister Brad Duguid sheepishly admitted: "It is a bit of an art, identifying risk, as much as a science."

Ontario's Auditor-General is blunter, suggesting the government's so-called "value assessments" are little more than junk science. "The probabilities and cost impacts are not based on any empirical data that supports the valuation of risk," she said in her report.

And yet quantifying risk may be considerably more straightforward than Mr. Duguid suggests. Change orders routinely add about 5 per cent to the cost of conventional infrastructure projects, according to a consultant involved in numerous government infrastructure projects in Ontario. He said that's a fraction of the steep risk premiums Ontario and other governments routinely put on their P3 projects.

And that miraculously flips around the cost comparison, making P3s the clear value winners. A 2013 study by InterVistasConsulting Inc. for the Canadian Council for Public-Private Partnerships, estimated that governments across Canada saved a total of $9.9-billion on 121 publicprivate projects between 2003 and 2012, compared with conventional contracting.

"Risk premiums are really tipping the scale in favour of P3s," said University of Toronto associate professor Matti Siemiatycki, who wrote a 2012 study on public-private partnerships. He found that P3s cost an average of 16 per cent more than conventionally tendered contracts, based on data from 28 P3 projects in Ontario.

Governments are buying the equivalent of a very expensive insurance policy against something going wrong, without a valid actuarial calculation of the real risks involved, Prof. Siemiatycki argued. He said governments will never get value for money unless they do a much better job of quantifying risk.

But Mark Romoff, president and chief executive of the Canadian Council for Public-Private Partnerships, disputed the notion that governments are exaggerating the risks of traditional procurement.

"If you were to collect that information it in fact would demonstrate categorically that projects procured in the conventional way are consistently overbudget and late," Mr. Romoff said. "We all know that intuitively."

And yet the stakes are simply too high to rely on shaky or absent data. There are roughly 220 P3 projects worth more than $70-billion operating or planned in Canada. The next big one is the federally funded replacement of Montreal's Champlain Bridge, a project that could cost as much as $5-billion.

Ottawa and many provinces remain deeply committed to the public-private model.

The allure may have a lot more to do with politics than sound financial management. These projects give governments the ability to push spending down the road, with ribbon cuttings today and most of the bills due later.

They also allow governments to duck the inconvenient responsibility when things go terribly wrong. No politician, or bureaucrat, wants to have to explain why a high-profile project is late or over budget.

Taxpayers may have a very different perspective on the responsibilities of public officials, and a few good suggestions on what to do with an extra $8-billion.

Nothing to crow about: Why Canada's chicken pricing is unfair
Monday, November 24, 2014 – Print Edition, Page B1

OTTAWA -- So you're in the meat aisle of the grocery store, looking for some chicken.

The price for two boneless breasts is nearly $8.

Is that a fair price?

It is a reasonable question to ask, given that chicken prices in Canada are fixed by the supply management regime - not at the store level, but by what producers get paid for their chickens at the farm.

This floor price affects the cost of chicken throughout the supply chain, from meat-packing plants to restaurants and grocery stores.

There is both good news and bad news on the fairness question.

First the good. Ontario, the chicken price-setter for the rest of the country, is rewriting its pricing formula to better reflect what it actually costs farmers to raise chickens.

The bad news is that the province will continue to let the chicken industry craft its own pricing scheme. And the details of the proposed new formula, like the old one, remain a closely guarded secret.

That's troubling because Canadian consumers already pay substantially more for chicken than people in much of the world, most notably Americans.

In 2012, retail prices for whole chickens were 75 per cent higher in Canada than in the United States, and the gap was 52 per cent higher at the farm-gate, according to figures compiled by Restaurants Canada, whose members buy $2.5-billion worth of chicken a year.

The lobby group for the country's restaurant industry has been pressing the Ontario Farm Products Marketing Commission, a provincial regulator, to release details of the new formula, along with the workings of the old price mechanism to help it evaluate the proposed changes.

Restaurants Canada said it was told the information was "proprietary" and that they should file an access-to-information request, according to Rick Hall, the association's federal policy director.

"We don't know the current cost of production. We don't know what the amendments are. We don't have any idea, whatsoever," Mr. Hall complained. "On what basis are we supposed to provide commentary? It's laughable."

Commission chairman Geri Kamenz denied it hasn't been open to suggestions, pointing out that consumer groups - including restaurants - have had ample opportunity to be heard.

He did acknowledge problems with the current price formula, which he likened to a "black box" that few people understand. He said that's precisely why the commission has been prodding farmers for three years now to come up with a fair and transparent pricing scheme.

"If you, as a concerned consumer, were trying to figure out how the product is priced now you would throw up your arms in frustration," Mr. Kamenz said. "That's just not good enough for the 21st century."

The commission is hoping the new system, initially promised in 2013, will be in place by February, 2015. And if anyone isn't satisfied he can bring their complaints back to the commission. "It is not the end of the road," he insisted.

Pricing is considerably more transparent in the the dairy industry, which along with eggs and turkey, is also part of the supply management system. The Canadian Dairy Commission, a federal regulator, consults regularly with retailers, restaurants and the public. Its cost-of-production formula is independently produced, audited and publicly available.

In Ontario, the price of live chickens is now set by tallying up three things: the cost of chicks, the price of feed and a fixed profit margin for the producer. But the details of how these various components affect the price and change over time are closely held by the Chicken Farmers of Ontario, which did not immediately respond to a request for comment.

The plan now is to incorporate data from surveys and several "model" farms to get a better handle on true costs, including cheaper and more efficient feed techniques.

Restaurants argue that if the old formula was faulty, they and all Canadians may have been overcharged, possibly for years. And if so, they are entitled to rebates, Mr. Hall said.

A common-sense solution to this Kafkaesque dilemma would be to dismantle supply management and move to the kind of market-based pricing system that exists in other farm commodities.

Short of that, Canadians deserve fair, transparent and independently set prices, not a black box.

And the governments that continue to coddle this farmer-run regime should justify to Canadians the steep premiums consumers are paying at the checkout counter.

Banks eye cost cuts as growth slows
Financial stocks fall as CIBC, TD report expense growth that outpaces revenues; TD cites need to 'increase efficiency'
Friday, December 5, 2014 – Print Edition, Page B1

Cost control has become a major concern for Canadian banks as the country's largest lenders grapple with slower growth and soaring expenses.

Canadian Imperial Bank of Commerce and Toronto-Dominion Bank, both of which released fourth-quarter earnings Thursday, reported expense growth that outpaces revenues, while Bank of Montreal reported the same trend earlier in the week. The banks' profits came out on the same day that the S&P/TSX bank index fell 2.5 per cent

At TD Bank, management said it is ready to take action to protect the bottom line. Chief executive officer Bharat Masrani stressed the need to "increase efficiency and streamline our cost base" during a conference call Thursday. Such language usually portends job cuts and restructurings.

Bank of Nova Scotia management used similar words in April, when the lender's retail banking head stressed the need for "expense management" and "operational excellence." Six months later, it announced to cut its work force by 1,500 people, including two regional heads.

However, some banks are less concerned - at least for the time being. Executives at CIBC have not expressed any worries because elevated expenses have largely tracked the bank's investment in its retail operations. Whether CIBC acts swiftly to contain costs will depend on how much additional revenue the revamp generates.

TD is particularly keen to crack down on expenses. Mr. Masrani has raised renewed concerns about the bank's shortterm growth prospects.

TD management warned about a tough banking landscape at the start of fiscal 2014, but changed its tune midway through the year once capital markets and wealth management earnings caught fire.

Mr. Masrani is now rehashing the old language, going so far as to say on Thursday that it will be hard for TD to meet its earnings growth targets next year. "We continue to aspire to deliver 7 per cent to 10 per cent [earnings per share] growth over the medium term. In the current environment, it is difficult to see how we will get into that range next year," he said on the conference call.

The warning came just one day after Royal Bank of Canada expressed confidence in delivering 7-per-cent annual earnings growth.

The recent cost crackdown comes as Canada's largest banks are reporting enormous profits.

TD made $7.9-billion in fiscal 2014, which ended on Oct. 31.

However bank executives have long stressed the need to balance cost control with creating "shareholder value." CIBC's profit slipped 1.7 per cent in the fourth quarter from a year earlier to $811-million, largely because of weaker capital markets earnings, but overall earnings were in line with analysts' expectations. The bank raised its quarterly dividend by 3 cents to $1.03 a share and also appointed former cabinet minister John Manley as chairman of its board, replacing the outgoing Charles Sirois.

CIBC's full-year profit totalled $3.2-billion, down 4 per cent from 2013, after incurring a substantial charge in the second quarter to write down the value of its Caribbean business. CIBC's shares fell 3.4 per cent to $103.52.

CIBC is looking to expand its wealth management footprint, particularly in the U.S. On a conference call Thursday, chief executive officer Victor Dodig said the bank is currently assessing deals worth between $1-billion and $2-billion.

In Canada, the bank is investing heavily in its retail banking systems, such as one that will make it easier to cross-sell products to clients. These expenses are expected to make it difficult to realize profit growth in the near future.

TD's strong earnings momentum cooled in the fourth quarter, with profit falling short of analyst expectations. However, TD still made $1.7-billion, 8 per cent more than the same period in 2013. TD's stock fell 5.1 per cent to $54.03.

Looking forward, chief financial officer Colleen Johnston said in an interview that "a number of the macro challenges will remain into 2015," including low interest rates and stiff regulation that has increased compliance costs.

Should the U.S. economy continue to gather steam, however, TD is one of the best-positioned Canadian banks because of its big investments to expand its retail business south of the border.

Ottawa's Price Transparency Act is supposed to bring consumer prices in line with those in the U.S. But combatting the problem won't be that simple
Wednesday, December 10, 2014 – Print Edition, Page B1


Think of Industry Minister James Moore as the matador, waving a red cape in front of a raging bull.

The bull, that's us - hard-working Canadians, angry and frustrated by consumer prices that seem to be consistently higher than in the U.S. And the cloak is a diversion from all the practical things Mr. Moore and the Conservative government could be doing to enhance competition, but choose not to.

The government promised to do something about the price gap in its most recent budget, and on Tuesday Mr. Moore responded with the Price Transparency Act. The law would give the Competition Bureau expanded powers to investigate and publicly shame businesses found to be engaged in what he called "unfair" geographic price discrimination.

Speaking at a Toronto-area Toys 'R' Us store, Mr. Moore said the law would "help ensure that Canadians are not unfairly charged more than Americans simply because we live in Canada."

The government backed off a threat to make the practice illegal and to sanction offenders. The retreat follows warnings from lawyers and other experts that the government would be on shaky legal ground and might provoke trade retaliation from the U.S. and other countries.

But that does not make this a good law.

The government could have done many things to inject more competition into the economy. For example, the government intentionally shields key sectors from the full weight of foreign competition, including telecom services, banking, airlines and the dairy and poultry industries. Ottawa also tolerates persistent interprovincial trade barriers, which impede the free flow of goods and labour across the country.

These policies, many of which were designed to solve problems that no longer exist, stealthily cost Canadians thousands of dollars a year.

The government isn't going there.

Ottawa could also increase duty-free exemptions for crossborder shopping and purchases made from U.S. online stores, as University of Toronto economist Nicholas Li suggested in a recent C.D. Howe Institute report.

Doing so would quickly bring price discipline to Canada, as manufacturers and retailers move to protect their market shares.

The larger challenge for Mr. Moore and the Competition Bureau is that the reasons for the price gap are many and complex. An Industry Canada backgrounder released Tuesday cites a Statistics Canada estimate that put the price gap at "about 25 per cent" in 2011 when the dollar hovered near par. How much of that is due to foreign manufacturers applying unjustified countrywide prices will be tough to prove, particularly now that the dollar has sunk to roughly 87 cents (U.S.).

As Conservative Senator Joseph Day admitted after releasing an exhaustive 2013 report on the problem: "There is no one answer ... the marketplace determines prices."

And the bureau isn't getting any more resources to do what could be an impossible assignment.

"There are so many variables involved that it's going to be very hard to arrive at a definitive opinion of what is unjustified or unfair. That's worrisome," remarked George Addy, a former head of the Competition Bureau who is now a partner at law firm Davies Ward Phillips & Vineberg LLP in Toronto. "Unfairness is often in the eye of the beholder."

Manufacturers may charge higher margins to cover higher transportation costs, taxes, labour rates and government regulations. It's hard to escape the reality that the U.S. market is much denser and easier to serve than Canada's population, which is spread thinly across a vast geography.

Another danger is that the Competition Bureau's powers become a political tool to go after unpopular industries or companies unfairly fingered by rivals. Just responding to an investigation could lead to hefty bills, even in the absence of unfair practices.

Watch for the government to begin touting the new law and its much-hyped "consumers first" agenda over the next few months in TV ads.

But don't be distracted. If you want to know what the government is really doing to shrink the price gap, keep your eye on the matador, not his cape.

Thursday, December 11, 2014


A Wednesday Report on Business column incorrectly said Senator Joseph Day is associated with the Conservative Party. In fact, he is a Liberal senator.

Talisman talks heat up as oil falls again
Shares in Canadian company jump 18 per cent after confirmation of Repsol negotiations
Tuesday, December 16, 2014 – Print Edition, Page B1

CALGARY -- Repsol SA's board of directors evaluated the details of a possible multibillion-dollar takeover of Talisman Energy Inc. on Monday following several days of negotiations between the two companies, bringing the Calgarybased firm a step closer to becoming a part of the Spanish multinational.

In a statement to Spain's stock market regulator, Repsol said a potential acquisition of Talisman, rather than the purchase of some of its assets, was on the board's agenda for the Monday meeting. Sources said there was no formal offer yet, and a deal was still not a certainty.

However, the situation is said to be advancing quickly as oil prices sink to new five-year lows daily. West Texas Intermediate crude fell $1.90 (U.S.) a barrel to settle at $55.91 on Monday.

"The company reports that, at the ordinary meeting of its board of directors to be held [Monday], it will submit for consideration, among other matters, the analysis of a possible transaction consisting in the acquisition of the total share capital of the Canadian company Talisman Energy Inc.," Repsol said in the statement to the Comisión Nacional del Mercado de Valores.

Repsol has said in the past it is anxious to deploy a sizable cash war chest on oil and gas operations in developed countries such as Canada and the United States, where Talisman has extensive assets. Sources said executives were in Calgary for negotiations last week.

After hefty gains as word of the talks spread, Talisman shares surged another 18 per cent on Monday to $5.97 (Canadian) on the Toronto Stock Exchange.

The company had been under heavy selling pressure as oil prices declined rapidly in recent weeks, reducing its outlook for cash flow and increasing its relative debt burden as a result.Talisman reiterated in a statement Monday it is in discussions with Repsol about a possible deal and has been approached by other parties regarding potential transactions. Bloomberg reported that Canada Pension Plan Investment Board was one of the other parties weighing potential transactions with Talisman.

The company cautioned there can be no assurances that any deal will be consummated or on what terms.

A bid for Talisman could land in the $6-to-$8 per share range, according to sources. The middle of that range would put a value of about $7.3-billion on Talisman's equity.

That price would represent a large premium to recent values, but would be well under the level of the stock price last year when major shareholder Carl Icahn bought his position as Talisman proceeded with a restructuring that included plans for extensive asset sales. At the time, investors wagered that the activist investor would shake up the company and lift the share price. That has proven to be more difficult than hoped.

Repsol has already made largescale investments in North America. Its Houston office is its second largest and it has invested in U.S.

shale operations as well as the Gulf of Mexico offshore.

It has no current oil and gas production in Canada, but has looked at assets in the past. The company has exploration acreage on the East Coast as well as a 75per-cent stake in the Canaport liquefied natural gas facility in New Brunswick.

Talisman (TLM) Close: $5.97, up 93¢

UP in the AIR
The early returns for Timberwolves rookie Andrew Wiggins are mostly positive. The 19-year-old's defence is sound, but his offensive bursts are still inconsistent. He knows he has a lot to learn. And as Timberwolves teammate and fellow Canadian Anthony Bennett tries to repair his reputation, the two have bonded in their struggle, David Ebner reports from Minneapolis
Saturday, December 13, 2014 – Print Edition, Page S1

Andrew Wiggins is in the air

Andrew Wiggins, the celebrated No. 1 draft choice playing in his 10th NBA game, has shaken off a New York Knicks defender, bolted to the basket and sprung upward. Samuel Dalembert, the Knicks' 6-foot-11 centre, slides into the lane to dissuade the attack. Wiggins, his back arched, clips his left hip on Dalembert's right shoulder, so that when he tries to slam the ball home, it ricochets off the rim and the Knicks retrieve it. Wiggins falls to earth.

This is the purgatory between prodigy and superstar.

It is a Wednesday in midNovember, a few minutes into a game between the Knicks and the team on which Wiggins has landed, the woeful Minnesota Timberwolves. This frozen north is where the Canadian kid, all of 19 years old, is to marshal his considerable promise. It is all about repetitions. Dribbling drills. Shooting drills. And under the bright lights of a game, it's often a schooling at the hands of older, stronger opponents. There are also doubters - scouts who question whether, for all his physical gifts, Wiggins has the drive needed to deliver on what has been foretold.

So far the returns are mostly positive. As a defender, he has fared well guarding some of the most potent scorers in the NBA. On offence his bursts of energy come and go. A lot, immediately, rests on him: The Timberwolves have been ravaged by injuries to veterans, and along with the offcourt trappings of incipient stardom - Adidas commercials, fashion spreads in GQ magazine - have come enough sterling performances on the floor to win Wiggins the season's first rookieof-the-month award in the Western Conference, for his play in November. A couple of days after the Knicks game, teammate Anthony Bennett scores a careerhigh 20 against the San Antonio Spurs. Like Wiggins, Bennett is from Toronto and was a No. 1 draft pick one year earlier - a rare arrival of two top picks in a single place. The next night, it's Wiggins's time to shine: 29 points in a loss to the Sacramento Kings.

"Man!" Kings centre DeMarcus Cousins says afterward. "I like Wiggins."

Cousins knows the grind: a No. 5 in 2010 with obvious talent but a reputation as a head case, now finally emerging as a full-blown force. "I told him after the game, he's going to be a special player," Cousins says of Wiggins. "And I like Anthony Bennett as well. He took a lot of heat his first year. He stuck with it, kept his head high. I like both of them. They're going to be something special."

'Couldn't ask for a better position'

Anthony Bennett was born in 1993 and Andrew Wiggins in 1995. They were raised 30 kilometres apart in the Toronto area, Wiggins in Vaughan and Bennett, first at Jane and Finch in the city, and then in Brampton. They are both children of immigrants. Their mothers arrived from the Caribbean when Toronto was a much more homogeneous city: Marita Payne, Andrew's mom, in 1970, and Edith Bennett in 1980. The boys grew up after Toronto had transformed into a mosaic, and professional basketball - the Raptors and Vince Carter - was making its mark.

Bennett and Wiggins have played together before, having first met in the summer of 2010, when Anthony was 17 and Andrew 15. They helped win a bronze medal for Canada at the under-17 world championships in Germany.

Bennett went on to one season at the University of Nevada, Las Vegas, before the Cleveland Cavaliers made him the surprise No. 1 pick in 2013, a first for a Canadian. Wiggins played one season, last winter, at the University of Kansas before he was also chosen No. 1 by Cleveland.

LeBron James upended the story. Basketball's biggest name returned to Cleveland from Miami, and the resulting tremors sent disgruntled Timberwolves all-star Kevin Love to Cleveland with Wiggins and Bennett heading to Minneapolis. The trade unfolded in slow motion over the summer. It was, for Wiggins, an introduction to the business of pro sports. For Bennett, it was a new beginning, after an awful rookie season when he had played poorly, slowed by injury and middling fitness.

The Timberwolves had missed the playoffs 10 consecutive seasons, and over that decade lost more games, 520, than any team in the NBA. Love indicated he wanted out and fans soured on him. The new arrivals were introduced in late August at the Minnesota State Fair alongside another athletic rookie, 19-yearold Zach LaVine, and newly obtained veteran Thaddeus Young from Philadelphia. It was a perfect summer day - sunny, 22 C. Bennett ate fried alligator - tastes like chicken, he concluded. Wiggins whirled on carnival rides.

On the Wolves, family is paramount. After the fair, everyone went to dinner at the house of coach Flip Saunders. His son Ryan is an assistant coach. Two sons of retired coach Rick Adelman, for whom Saunders took over, are also on the team's staff. This is a milieu Wiggins and Bennett know well. Wiggins is one of six kids, Bennett the youngest of three.

The party was a good one. Ribs were cooked. Wiggins's parents and Bennett's mother were there. It was a salve, the end of a summer in limbo.

"It was just long," Wiggins says of the lead-up to the trade. "Not really knowing where you're going to end up."

In November, Wiggins sits beside Bennett for an interview in a small, cinderblock room at Target Center in Minneapolis.

Despite the team's losing ways, both relish the chance to play and improve.

"We couldn't ask for a better position," Wiggins says.

"Like he said," Bennett adds, "we're in the best situation we can be."

'To be a pioneer'

The name Minnesota is derived from a Dakota Sioux word meaning "cloudy water." This is the land of lakes and the headwaters of the Mississippi. The Minneapolis region is home to 3.5 million people, about the same as Seattle and larger than anywhere in Canada but Toronto and Montreal. Like much of Canada, it gets cold - in midNovember, the wind chill pushed the downtown temperature to -20 C.

The state has forged singular talents: Judy Garland, Bob Dylan, Prince, the Coen brothers. "Minneapolis gets a reputation for being earnest or Midwest," said writer and musician Jim Walsh in 2005, but it's "sophisticated, too." In sports, there has been less success. The Twins won World Series in 1987 and 1991, and the Vikings - the most popular team in the state - lost four Super Bowls long ago. On ice, the North Stars lost more than they won and decamped for Dallas; the Wild, who miss the playoffs more than make them, are on a recent upswing.

The Timberwolves languish. There's talk the team is cursed. Two versions: Target Center is built on a native American burial ground, or Joey Two-Step, a fired employee from the early days, cast a hex on his way out the door. There was a single sparkling era, from 1995 through a Western Conference finals appearance in 2004. It began when Kevin Garnett was a 19-year-old rookie and Saunders a first-year NBA head coach. Saunders was fired in 2005, and Garnett was traded not long after.

A full circle begins to form. In November, Garnett, now of the Brooklyn Nets, talked about becoming a Timberwolves coowner when he retires. And Saunders has a rare second shot in Minneapolis to shape a top talent. He shares a birthday with Wiggins: On Feb. 23, Saunders will hit 60 as Wiggins turns 20.

Saunders returned to Minnesota last year as team president, and installed himself as coach last spring. He sees the opportunity for these young Wolves to upend the team's history. "To be a pioneer always means something more, to be the first," Saunders says. "To be the first to get to the NBA Finals. Maybe to be the first to win a championship."

'It's going to take some time'

Anthony Bennett hangs from the rim. He has taken a pass from veteran teammate Corey Brewer and thrown down a thunderous two-handed dunk, kicking up his legs so that, for a moment, his back is parallel with the floor a couple of metres below.

The dunk looks good but makes little difference. The score in the third quarter is 91-62, the visiting NBA champion San Antonio Spurs demolishing the Timberwolves. The home team is severely undermanned, missing four of its regular five starters.

If Bennett and Wiggins had remained in Cleveland, their roles would have been more modest, while Minnesota provides a rapid, generally humbling apprenticeship in the NBA. The gulf in experience is a canyon. Tim Duncan, the Spurs' No. 1 draft pick in 1997, plays his 1,499th game against Minnesota. It is Wiggins's 11th, and Bennett's 62nd.

Amid the trouncing, Bennett found his game, scoring a careerbest 20. Much as he savours dunks, his best weapon is a sweet stroke from mid-range, his accuracy surging from his rookie year, when he scored an abysmal four points a game.

The mood afterward is muted. "I was confident," Bennett says of his game. "I wish we got the win, though." He's received a text message from his mom: "Good game." They always exchange words, before and after he plays.

Bennett slides on his Balenciaga Arena high-top sneakers, dark green pebbled calfskin - $625.

He loves shoes and credits a teammate, rookie Glenn Robinson, with the counsel on the Balenciagas, a brand also favoured by Wiggins. "Learning from my man right here," Bennett says, pointing to Robinson beside him. "He's the fashion king."

The NBA is a fraternity, despite the fierce competition. Players know how tough it is, how potentially fleeting, how elusive the brass ring. Calvin Booth, the Wolves' director of player programs who suited up for eight teams in his decade-long career, is an in-house mentor. "How quickly he's been able to bounce back," Booth says of Bennett, "it's been impressive."

While Wiggins was born in basketball - his father Mitch played in an NBA Finals - Bennett came to the game as a teenager, after his mom moved the family to Brampton when he was 10. He is quiet, but teammates know another side. "He comes off like he's shy, but he's not shy," says Brewer, who calls Bennett the "music man" for his extensive music catalogue. And on the court, Brewer declares, "once he gets more playing time he's going to show people why he was the No. 1 pick."

The Spurs players see the difficulties ahead for Bennett and Wiggins. "Eh, it's tough," point guard Tony Parker says after the game, his feet in an ice bath.

"Especially playing with a young team, you know?" A Frenchman, Parker arrived in 2001, when the Spurs already ranked among the best.

"Bennett, you know, he's playing with more confidence, it looks like. He's always had a pretty good shot. So we'll see.

It's going to take some time."

'That's the good stuff, right there'

Andrew Wiggins is being primped. A couple of hours after a practice, a makeup artist brushes his nose. An assistant cleans lint off his black T-shirt. Kamp Grizzly, a small Portland film company, is shooting a promo of Wiggins for an Adidas magazine project.

Stars can make a fortune. Garnett has earned more than $300million (U.S.) in his career in salary alone. Wiggins is just getting started: His salary this year is $5.5million, while his Adidas deal is worth more than $2-million. "It's a lot of money for a rookie," agent Donald Dell says.

On the practice court, there's a quick photo shoot. What's your pose, the photographer asks, invoking the iconic Nike Wings poster, Jordan's arms outstretched, a basketball in his right hand. Wiggins suggests his arms crossed in an X in front of his chest, two balls palmed, framing his face. "It's not my pose," he says humbly - just a pose he's used for shoots before.

Wiggins is comfortable. "It just another day for me," he says. "You get used to it." There's been a spotlight on him since he was 14.

He was on the cover of Sports Illustrated before he played a game in college. He had a twopage spread in GQ in November.

"The new kid," the caption read.

When he was drafted No. 1, he dressed boldly: a floral print tuxedo jacket, with a classic birds-eye weave. Modern, too - skinny pants, short on the ankles, and sockless. "I'm going in with a bang," he told GQ of his draft-day style. It might seem too calculated - Wiggins has a personal stylist - but he has gravitated to fashion.

The men who have come before approve. "Back in the day," says Wolves general manager Milt Newton, himself finely dressed, "when you had Dr. J and Magic, they came to the arena nicely tailored. That's the good stuff."

To Chris Rivers, an Adidas manager who works closely with Wiggins, comportment counts. "They have to listen," Rivers says. "There are 12-year vets who are pros - but not professionals."

Earlier this fall, an Adidas commercial for the NBA's new swingman jersey played on the word wingman. The director had an idea and Wiggins embraced it.

The spot shows Wiggins, in his Wolves uniform, shooting hoops, and in runs his swingman, in a Cleveland Cavaliers jersey. Wiggins looks over. The swingman freezes, and retreats. "I guess," the chastened swingman says, "I missed the biggest sports story of the summer."

"That was fun to do," Wiggins says. "You have to have a sense of humour about certain things."

'A baby on its stomach'

Wiggins and Bennett are wobbling. One goes through a series of exercises, courtside after practice, and then the other. First: stretches with blue rubber bands. Next, standing on the left leg, the right leg extended behind, back parallel with the floor, lifting a weight in the left hand. Then, the opposite. Last, five pushups, slow.

This is part of the apprenticeship: turning athletic bodies into NBA bodies, built to last. The work is conducted under the watch of Koichi Sato. Raised in Japan, Sato is director of sports performance. On Wiggins and Bennett, he exercises small muscles, strengthens them, which helps prevent injury - Bennett struggles with various ailments - and increases stamina.

One idea is reflexive-core stability, where the body subconsciously anticipates movements and prepares muscles and joints for quick shifts. Other notions are adopted from a Prague doctor, Pavel Kolar, who promotes concepts based on the movement of babies called "dynamic neuromuscular stabilization."

Sato, after practice, is on his stomach on the floor in the hallway, demonstrating the infant poses he puts Wiggins and Bennett in. Sato elevates his chest and head, and rests his weight on his forearms. There's a tendency for adults to use back muscles for support. "If you put a baby on its stomach," Sato says, "they'll use their arms. It's the most efficient."

The next day, after another practice, the veterans are done. Flip Saunders oversees one of his favoured drills for young recruits. Toss a 10-pound medicine ball in the air, rebound it, then leap again, dunk it - the ball barely fits through the hoop. Repeat five times. Then, with a basketball, same thing.

Bennett is cheering on Gorgui Dieng, a second-year centre from Senegal. "Yeah, D!" Bennett shouts. "You got it! Push. Push.

Push." Next it's Bennett's turn - AB to his friends. At centre court, Brewer whoops it up: "Yeeaahhh, AB!" Bennett hangs on the rim as he puts down his last one.

Next, Wiggins. "Get up, Wigs!"

Brewer yells. "Here we go, here we go," Saunders chants. "That's three, that's three." From the bench courtside, Bennett, all smiles, lets out a roar of encouragement: "Aarrrgggghhhhh!"

"You've got to explode," Ryan Saunders says of the aim. "We want him to use his gifts."

'The world is in his hands'

Wiggins's critics - and they have been vocal since his college days in Kansas - do not doubt his gifts. What they question is his intensity, whether he has the sustained drive, the win-at-all-costs commitment of such transcendent stars as Michael Jordan, Kobe Bryant and James.

They see him make stirring plays, then seemingly disappear at other points of the game, or sustain excellence in one game, then fade out the next. This week, he finally delivered in back-toback games, capped by 23 points and 10 rebounds in a win over Portland. "Wiggins looked like the No. 1 pick tonight," Saunders said afterward. Still, stats geeks, weighing overall impact, rank him low against this year's NBA players and against 19-year-olds of the past - the likes of James, Garnett, Anthony Davis. Critics wonder whether Wiggins has what's required to be not only good but great.

But he is young, and quiet, and watching. "Sometimes when you're quiet," says Wolves assistant coach Sam Mitchell, who was NBA coach of the year in 2007 with the Toronto Raptors, "you're listening - and you're learning."

Wiggins plainly has a lot to learn. His coach has devised a drill in practice, dubbed the Wiggins Drill. It's a five-man fast break, no defenders, six times up and down the floor. Usually, a different player scores each time, but in this one, Wiggins has to score all six times.

"His mindset has to be that no matter what, you're always running," says Saunders, who well knows that Wiggins's mother, Marita Payne, won two sprint relay medals for Canada at the 1984 Olympics. "I want him to know every time, whether it's a make, miss or whatever, that you're sprinting."

As a defender, Wiggins is more advanced. He relishes guarding the NBA's best, using his quickness and athleticism. "He enjoys playing defence," Knicks rookie head coach Derek Fisher observes. "That's a skill in itself."

Wiggins's father Mitch, a role player on a stacked Houston Rockets team in the mid-1980s, was defence-oriented as well. Former teammate and Wolves broadcaster Jim Petersen remembers a cerebral player, with the mind of a coach. "Mitch was always like that," Petersen says. "How to stop Michael Jordan. How to stop Clyde Drexler."

Mitch, watching a game from the stands, considers where his youngest son stands. He is obviously biased but believes Andrew will be a top-15 two-way player in the NBA - by the end of the year. "How many players play defence?" Mitch says.

Young Wiggins's 29-point performance against the Kings gives him - for a week or so anyway - the rookie scoring lead against rival Jabari Parker of the Milwaukee Bucks, the No. 2 draft pick and another 19-year-old against whom Wiggins has competed in high school and college.

In the Kings' locker room, Rudy Gay knows the expectations. Gay played more than six seasons in Memphis - the first at age 20 - before bouncing through a bad spell in Toronto and landing in Sacramento. "I played a lot, and it helped me. They get to make mistakes and learn on the fly. That's what you want from the future of your franchise," he says.

As winter grips Minneapolis, the Wolves sit last in the Western Conference. Top veterans, including Spanish guard Ricky Rubio, are sidelined with injuries. Wiggins and Bennett, the faces of the future, are carrying the load now.

They have each other for support.

During Bennett's hard year in Cleveland - and Wiggins's attimes-challenging one at Kansas - Bennett often sent words of encouragement to his friend.

"Always giving me advice," Wiggins says, their Toronto backgrounds forging bonds. "Everyone knows each other. A lot of mutual friends."

"Just telling him to keep going," Bennett says. "Pretty much the world is in his hands."

Associated Graphic

Andrew Wiggins, 19, of the Minnesota Timberwolves, and the NBA's No. 1 pick in the recent draft, won the season's first rookie-of-the-month award in the Western Conference for his play in November. Wiggins and fellow Canadian Anthony Bennett are predicted to become 'something special.' Bennett was the No. 1 overall pick last season.


Andrew Wiggins of the Minnesota Timberwolves moves the ball up court against the Sacramento Kings last month in Minneapolis.


Rookie Timberwolves star Andrew Wiggins enters the court for a November game against the Sacramento Kings.


Wiggins, 19, and Anthony Bennett, 21, are both from the Toronto area and played on a bronze-medal-winning team at the under-17 worlds in 2010.

Though some observers question whether Wiggins has the drive to be an NBA great, coaches and scouts are impressed with his maturity on defence.

Fans greet the fashionably dressed Wiggins outside the Timberwolves' locker room after a game at Target Center in Minneapolis last month.

Uneasy lies the head that wears the crown
Leafs dethrone Kings, but the higher the climb, the greater the fall
Monday, December 15, 2014 – Print Edition, Page S1


Things were going so well hockey-wise, we spent the pregame discussing immunology.

"I just got my shot today," said Leafs coach Randy Carlyle, referring to the NHL's widening mumps outbreak. "They dragged me in. I was the last one. I thought that I had it 58 years ago so I didn't think I'd need another one, but I guess there's a new strain out that they better look after us."

Sounds serious. What's this all about?

"I think it started over in England last year or two years ago. It's something we didn't really hear about," said Stéphane Robidas, snapping on his CDC nameplate.

Are they right? Should we all be stockpiling ammunition and getting mentally prepared to begin slaughtering our neighbours? Just in case.

Well, God knows. If we were any good at science, we'd have real jobs.

Everyone's just making sure to stay well away from everyone else. The usual hugs and gentle caresses between the Leafs and their many admirers in local media have been replaced by amicable, from-across-the-room nods.

It's a bit of a letdown, because we were beginning to come around to the idea that the Leafs might not just be looking good.

They might actually be good.

Less than 24 hours after laying a comprehensive beating on the Red Wings in Detroit, the Leafs were back at work against the Stanley Cup champion L.A. Kings.

The Kings are presently Kingsing through the regular season - looking profoundly unengaged by non-elimination hockey. But they're still the Kings.

"I would say we played the game in two parts," Carlyle said following a 4-3 shootout victory.

He's exactly right. There was a good part and a bad part.

Toronto owned the first period, and came away with a 2-0 lead.

The season's surprisingest of a few surprise packages, Mike Santorelli, scored the opener on his 29th birthday. The Leafs are 13-0 in games in which they score first. They are also 1-0 on Mike Santorelli's birthdays.

After all that good early work, they lay down and died at the end of the second. Defenceman Jake Gardiner allowed L.A.'s Justin Williams to walk through him on a one-on-one rush. That the goal probably should have been called back on a high stick didn't seem to matter. It felt like the sort of bad call you deserved, as a form of punishment.

Two more soft goals on either side of the second intermission put Los Angeles into the lead.

And you began to think to yourself - this is where the Leafs start coming back to Earth. Oh well. It was fun while it lasted.

They've been on a compelling roll since their 9-2 humiliation against Nashville a month ago.

That seems like a long time ago, but it doesn't feel like a memory.

They continue to win games in which they've been largely outplayed. Twenty of their 30 games have been at home, far and away the most in the NHL. They'll set out on an onerous two-week, seven-game road swing once the World Juniors ramp up around Christmas.

Everything is going their way, and it doesn't seem sustainable.

Hadn't we all agreed this team was puddle-thin and lacking gumption? But it's sustaining - what's more compelling than that?

They managed it again on Sunday, in front of a somnambulent afternoon crowd.

James van Riemsdyk tied it on the power play - which was remarkably fluid and very un-Leaflike through the whole game.

Having dragged it into overtime, you felt satisfied. That's the real Blue-and-White disease - a poverty of ambition. Toronto strung it as far as the shootout.

Joffrey Lupul was the only scorer.

Once again, James Reimer put in a strong performance. This town is finally enjoying the correct sort of goalie controversy - one where you don't want to drop the pair of them off at the bus station with 50 bucks and a warning to be gone before sundown.

The Leafs are 9-1-1 since Nashville. They're one win off first place in the Eastern Conference, with a game in hand. Aside from the reassuringly vicious presence of Richard Panik, nothing's really changed. They just carry themselves differently. It's all more purposeful. Randy Carlyle has gone from despair to acceptance to surprise to worry. If they keep winning, he's going to round back to despair again - he's learned not to trust anything in this city.

"I always try to temper my enthusiasm," Carlyle said mournfully. Pity Carlyle when he wins - it's immediately back to the professional ennui.

Given how threadbare these wins can sometimes seem, especially on the stats sheet, do you feel any sense of danger?

"There's always danger," Carlyle said. "Pro sports is about danger."

Hmm. I thought it was about bitterness and grinding disappointment. But unlike Carlyle, I grew up here.

It's difficult to not let that attitude infect what the Leafs are managing at the moment. You can metricize what they're doing to death. From that perspective, they are more lucky than good.

"It's still early in the year, but ... we've got room for improvement," Robidas said. "You have to keep moving."

Robidas, an off-season signing, is as close to a disinterested observer as you're going to find in the Leafs' locker room. That does not sound like someone who thinks the current wave is going to keep cresting. He knows that some of this is fortune.

But since luck is all they have to count on, and since this year had been treated like an extended mulligan from the jump, I'll take it. I suspect Robidas will as well.

However it turns out, this team has at least proved that while it may not be one of the NHL's bully boys, it has the wherewithal to keep swinging as its going down. And maybe - just maybe - the Leafs can do a good deal more.

Follow me on Twitter:@cathalkelly

Associated Graphic

James van Riemsdyk celebrates after scoring late in the third period to tie the game at three. The Leafs won in a shootout.


Daniel Alfredsson calls it a career in a remarkable day of wall-to-wall Alfie in Ottawa. The former Senators captain was overwhelmed by the adulation, calling it surreal
Friday, December 5, 2014 – Print Edition, Page S1


Fire the ovens. Hockey players have been bronzed and honoured in Edmonton and Los Angeles (Wayne Gretzky), Boston (Bobby Orr), Detroit (Gordie Howe), Pittsburgh (Mario Lemieux) and Montreal (Howie Morenz, Rocket Richard, Jean Béliveau, Guy Lafleur).

All good Canadians, so far, who played the Canadian game at the highest possible level and came to personify the cities in which they played.

Strangely, though there are statues all over the City of Ottawa, none is of a hockey player, though a bronzed Rocket Richard can be found across the river in Gatineau and a statue is in the works to honour Lord Stanley of Preston, the Governor-General who gave the Cup that mysteriously vanished from Canada almost 22 years ago.

It is hardly as if Ottawa has lacked for hockey gods. "OneEyed" Frank McGee once scored 14 goals in a single Stanley Cup game and was later killed in action in the Great War.

"King" Clancy once played all six positions - including goal - in a Stanley Cup match, guarding the net while goalie Clint Benedict served a penalty and finishing the game with a perfect 0.00 goals-against average and 1.000 save percentage.

But last night in Ottawa, the Canadian Tire Centre scoreboard called Daniel Alfredsson "the greatest Ottawa Senator of all time" - and there wasn't a dissenting voice in the sellout crowd that came to welcome the Swedish prodigal son home.

It was a remarkable day of wall-to-wall "Alfie" - radio and television filled with tributes, a morning news conference and a photo-op signing of a one-day contract so that Alfredsson could retire from hockey as an Ottawa Senator rather than the team he switched to in 2013, the Detroit Red Wings.

The media gave him a standing ovation at the presser; radio hosts interviewed every player who had ever touched a puck in his vicinity; his story led off the television newscasts; and the cheers during the warm-up, when the 41-year-old former Ottawa captain scored on the first "rush," were, as expected, the greatest cheers of the night.

It was a day on which they could have renamed the airport Daniel Alfredsson International, when the Ottawa River could have become Alfredsson Creek, when the road to Toronto could have been changed to Hwy. 11 - if only to jab the scab that Daniel Alfredsson will always be in the Toronto sports memory.

He went undrafted as a kid playing in Sweden, eventually plucked in the sixth round by the Senators as a 22-year-old no one expected to make the team. But he was, by far, the best player at the 1995 camp and could not be denied.

He was the NHL's rookie of the year in a season he almost bailed from, so dysfunctional was the team as managers changed, coaches were fired and a new rink opened. But it all began to change with him.

He stuck it out, playing 17 of his 18 NHL seasons in Ottawa, 13 as captain, and taking the Senators to the Stanley Cup final in 2007. In the summer of 2013, unable to come to financial terms with the team he had once rewarded by playing for a fraction of what he might have commanded, he left for Detroit and one last chance of a Cup. It was not to be. Eventually, back problems convinced the head that it was time to move on.

There was bad blood, but it dried and was entirely gone Thursday by the time Alfredsson, his wife, Bibbi, and their sons Hugo, Loui, Fenix and William took to centre ice for the anthems prior to Ottawa's match against the New York Islanders.

As in olden times, the fans chanted "Alfie! Alfie! Alfie!" and chanted it all again each time the clock struck the 11-minute mark of a period.

Alfredsson took one last spin of the ice in full uniform, the "C" once again over his heart and, as he had predicted, tears rolling.

"It was tough," he said when the tribute was over.

"It's so overwhelming that it's hard to comprehend almost. It gives you goosebumps and it makes me extremely nervous." He felt he had botched his memorized speech and left out things he wanted to say, but in reality it was less about him speaking to a city than a city speaking to him. They wanted to thank him for his hockey, for his dedicated work on mental illness. They want him back home. The family wants to come home. The team wants him back in any role he might wish.

"It's up to him where he wants to be," owner Eugene Melnyk said.

"I didn't expect my retirement would be this big a deal," Alfredsson said.

"The way I've been welcomed back has been almost surreal."

Surreal, too, during the warmup when, briefly, a curious thought passed through his head.

"I couldn't have played," he said. "I'm not in good enough shape. But I skated a couple of laps and you feel like, 'Maybe a few shifts.' " The Senators, struggling of late, might well use him, yet he leaves the NHL with better numbers than any player who was taken in the draft year in which he was ignored: 444 goals, 713 assists in 1,246 NHL games. He played in five Olympics, winning gold in Turin in 2006.

Talk will now turn to the Hall of Fame and whether those numbers are good enough - though a larger block may well turn out to be unforgiveness in Toronto, home of the Hall, for the various transgressions he is felt to have committed against the Leafs in long ago Battles of Ontario.

No matter. In Ottawa he requires no Hall, no statue.

"You made your town our town," he told them for himself and for his family.

"Thank you. À bientôt." Same to you, said the cheers.

Follow me on Twitter:@RoyMacG

Associated Graphic

Daniel Alfredsson acknowledges fans as he takes part in the warm-up skate before the Senators played the New York Islanders in Ottawa on Thursday night.


Former captain Daniel Alfredsson skates by Senators players as he takes to the ice for the warmup Thursday. The Senators were beaten by the New York Islanders 2-1.


When the argument turns to semantics instead of violence: The Rices pick up Goodell's fumble and run with it
Wednesday, December 3, 2014 – Print Edition, Page S1

The Ray Rice redemption flotilla left harbour quietly on Friday.

Coming up on a week later, it's puttering along in very shallow water. But, amazingly, the fleet is still seaworthy.

A month ago, we agreed that Rice was finished as an NFL player. In a milieu where you can always find a contrary voice, none had piped up in his defence. The video showing him knocking out then-fiancée Janay Rice in an Atlantic City elevator was too jarring.

But where there is the promise of money and an engaged audience, no story can be allowed to die. The average cable-news viewer was willing to plow through only so much soulsearching on domestic violence.

No one was going to read/listen to/watch reports on Rice's quiet withdrawal into private life.

There was only one way to push this boulder forward.

So right now, it's probably 50-50 that Rice plays again. He could be back in pads by the weekend.

How did that happen?

Most of the fault lies with the chief disciplinarian. Most of the work has been done by the victim. In between, the news cycle continued to lend the story legs, long after it had lost the use of its own.

It started with NFL commissioner Roger Goodell. He was of two minds on this file. When he first heard about it, he moved to protect his employers and his employee. When the release of the video showed that to be a disastrous error in judgment, Goodell pulled the handbrake in the midst of freeway traffic. He accused the running back of a cover-up, attempting to suspend him into retirement.

Because no American tyrant can admit what he is, Goodell wanted the cover of capital-J Justice. He brought in a retired judge to review the case. She cut emotion out of the mix, reducing the incident to an administrative matter.

In a disciplinary meeting, did Rice tell Goodell he'd "slapped" his fiancée, or did he say he'd "hit" her? Did he say she'd "knocked herself out" as she fell, slamming her head into a railing?

The judge sided with the player, as well as the recollections of others in the room. Rice hadn't tried to minimize what he'd done. There was no basis on which to impose a second punishment of indefinite suspension.

Rice's lifetime ban was rescinded.

It didn't change a thing about what he'd done, but suddenly we were in an argument about semantics instead of violence.

This was the wedge the Rice camp needed to swing the narrative in their favour - "Roger Goodell is a liar."

The media - old and new - don't like Goodell. He's too slick, too imperious and, most important, too rich. After chewing all the flavour out of Rice, the pack's attention turned on the wounded commissioner.

The public went right along with them. They'd spent months kicking Rice's head around. They wanted a new one.

The ruling came down Friday.

The Rice camp had seen this moment coming a long ways off.

They'd already dangled an exclusive in front of ESPN, and been hard at work on a sympathetic take. The Worldwide Leader in Sports does tend to enjoy following.

ESPN spent hours with the woman Rice had beaten, and her family. Janay Rice told a moony, compelling story about her husband. Parts of it read like the back cover of a Sweet Valley High novel.

The key point: This was a onetime-only mistake by an absolute sweetheart of a guy.

Everyone will view what Ray Rice says through the lens of their own experience, but it is impossible to aggressively rebut someone in the midst of an act of forgiveness. Janay Rice placed herself in front of her husband. Attacking him now seems like attacking her.

So everyone stopped.

Janay Rice blamed the man who'd hit her, but she did not fault him. "I know for a fact ... that Ray told the honest truth that he's been telling from February," she told NBC's Today.

Ray Rice: formerly a wife-beater, currently a teller of honest truths.

The only fault Janay Rice wanted to talk about was the commissioner's.

On Goodell: "I can't say he's telling the truth."

Roger Goodell: formerly a stand-in for every slippery authority figure in your life; currently a liar.

What's lost here is why Goodell played loose with the language.

He absolutely did it to deflect attention away from the league.

Doing whatever's necessary to protect the shield is why he's paid so much ($44-million [U.S.] last year).

But Goodell also wanted to give people what they were demanding - a way to get rid of Ray Rice.

The commissioner miscalculated on the motivations of a medialed mob. It wants something until you give it to them. Three or four cycles later, there's no new information. Nobody's squirming. It's all getting pretty dull.

Now the mob wants the opposite of what you give. It wants pathos and redemptive tears. It wants all of this to mean something and be tied up neatly so that it can move on to the next outrage.

The NFL had nothing to give, so it turtled. It lost control of the story. Ray and Janay Rice and their team of flacks and lawyers picked up that abandoned initiative. They gave people the cheap transcendence they were looking for.

We won't know if it's paid off until a team decides to offer Ray Rice a job. Even if his plan works, he may come to regret it. A return to football gives people a chance to be furious with him again. Only this time, they'll know where to find him.

Shortly after the ex-judge's ruling came down, the Rices were spotted out at a New York bar.

They seemed to be celebrating.

Out with a few friends. Drinks on the table.

Back to where they started, just like the rest of us.

Follow me on Twitter: @cathalkelly

Stampeders quarterback Mitchell throws four TD passes and runs in a score himself to secure an easy victory in the West final as Calgary looks to cap a stellar season with a Grey Cup win over Hamilton
Monday, November 24, 2014 – Print Edition, Page S1

CALGARY -- A couple of days ago, Nik Lewis told everybody about his nightmare: How just before the Calgary Stampeders were to play host to the CFL's West Division final, he'd dreamed they would lose to their archrivals, the Edmonton Eskimos, in what was likely his last-ever game at McMahon Stadium. Lewis's fears summed up the city's mood heading into a game in which the 15-3 Stamps were the heavy favourites.

They couldn't lose to an underdog opponent in the playoffs again, could they?

Could they?

No. It turns out Lewis's premonition was as faulty as the Eskimos' play in the first 35 minutes of a game that was never as close as the final score. The Stampeders raced out to a 25-point halftime lead and then made it last for a 43-18 victory to qualify for their second Grey Cup final appearance in the past three years.

On a perfect Sunday afternoon weather-wise, with the temperature a moderate -1 C at kickoff, the Stampeders won what was effectively their first meaningful game in five weeks, or since they clinched top spot in the West back in mid-October.

There were concerns expressed then about their readiness, after three games of playing out the string at the end of the regular season followed by a bye directly into the final. Their fears, like Lewis's, proved unfounded.

"Nobody let us forget that we've had a couple of stumbles in the playoffs, and the guys remember that," linebacker Juwan Simpson said. "We came in on day one and said we were going to get to the Grey Cup. We stayed focused, regardless of what it took - practising a lot during the bye week, whatever it was, guys were ready and did what they had to do. We got a win, but we're not happy [yet].

We want to win the Cup."

The Eskimos set out to stop the Stampeders' ground game, and on a purely statistical level, their game plan mostly worked. Calgary managed just 10 rushing yards in the first half and 44 in all.

But that didn't stop the CFL's rushing leader, Jon Cornish, from rattling off two big plays through the air, including a 78-yard touchdown completion that came off a two-foot shovel pass from quarterback Bo Levi Mitchell.

Mitchell, making his first playoff start, was exceptionally sharp, completing three passes of 45 yards or more in the first half alone - touchdown tosses to Cornish and Marquay McDaniel, along with a 61-yard completion to Simon Charbonneau Campeau, which set up a two-yard quarterback sneak for a third TD.

By then, it was all over but the trash talking. Calgary pledged not to turn the ball over - its single biggest failing in last year's divisional final loss to Saskatchewan - and the Stamps lived up to that promise. They had zero turnovers in the game.

"We knew they were going to try and take away the running game and stop Corn [Cornish]," Mitchell said, "but Corn is one of those guys, you can get him the ball anywhere. We got him the ball in the pass game and made some great plays - everybody all around did. The defence stopping them, giving us field position, and receivers making great plays down the field."

Mitchell's counterpart, Eskimo QB Mike Reilly, gutted it out on a bad foot until early in the fourth quarter, when a hit from Stampeders defensive end Shawn Lemon knocked him out of the game. Reilly had a hard time getting anything going against the Stampeders' defence until midway through the third quarter, at which point Calgary had switched into bend-but-don't break mode and he rattled off consecutive TD passes to get Edmonton to within 18 points. Matt Nichols finished up and couldn't get the Eskimos any closer.

"The better team won today," said Eskimos receiver Adarius Bowman, who scored one of the two Edmonton TDs. "Hats off to Calgary, they're a great team."

"It was mental for us," added Edmonton defensive back Aaron Grymes. "We didn't come out with the spark we had the last two weeks. If you come out flat against a team like this, they're going to capitalize on it."

So the Stampeders, who last won the Grey Cup back in 2008, will travel to Vancouver and try to avenge their defeat in the 2012 championship at the hands of the Toronto Argonauts. Calgary won both its regular-season meetings with Hamilton, but they haven't played each other since mid-August.

"We stood up to a giant today," said Stampeders defensive end Charlston Hughes, who returned to the lineup after a long injury absence, but left the game early and had his right foot back in a walking boot afterward. "Those Eskimos are a good team and they came out and played their hardest. Mike Reilly came out and gave it his all. But we overcame. We were clicking on all cylinders. The offence played good. The defence played good. Special teams held them at bay. I can't tell you how proud I am of my teammates today."

It was a celebratory locker room afterward, but cautious too. The sense that nothing had been won yet permeated through the bedlam, from coach John Hufnagel to Mitchell and to Eric Rogers, who caught two TD passes, one in each half. Rogers's 30yard catch with five minutes gone in the third quarter put Calgary up 36-4.

"I want to smile, I want to have fun, I want to celebrate it, but we've been in this position before," said Mitchell, who threw for a season-high 336 yards and four TDs in all. "We're one game closer to the goal we set at the beginning of the year - and we're going after it."

Follow me on Twitter:@eduhatschek

Associated Graphic

Stampeders back Jon Cornish, centre, was held to 44 yards rushing, but had a 78-yard touchdown on a shovel pass.


Masai Ujiri and Jeff Weltman met in Denver about 10 years ago and hit it off. Their partnership is a testament to their respect for each other and the power behind the Raptors' turnaround
Tuesday, December 9, 2014 – Print Edition, Page S1

It started a little more than 10 years ago in the Denver Nuggets' second-best executive office.

Jeff Weltman was the assistant general manager. The team's video guy asked him to meet someone - Masai Ujiri.

At the time, Ujiri was working on a volunteer basis for the Orlando Magic. Weltman agreed to see him.

"I honestly don't remember what we talked about," Weltman said. "I just remember how impressive he was. We completely hit it off."

Midway through the conversation, Weltman got up from his desk. He went next door to Denver GM Kiki Vandeweghe's office and told him they had to hire Ujiri.

Then he walked back in and picked up where he'd left off.

At the end of that season, Denver gave Ujiri his first paying job in the NBA - two years for a total of $85,000 (U.S.) to be an international scout.

In 2010, after a steady rise, Ujiri was hired to be Denver's GM. Instead of taking the big office, he moved into Weltman's former hidey-hole.

"I wanted to be back where it started," Ujiri said.

Basketball is a who-you-know business, but not necessarily a friendly one. It's hard to maintain a real sense of loyalty when you are occasionally forced to fire your pals.

Ujiri and Weltman managed it. They built their friendship on the road, during overseas scouting trips. Ujiri likes to tell stories. Weltman likes to listen. They share the same dry sense of humour and a wry take on life.

Ujiri moved on, but they continued to talk. All the time. Via text or e-mail or phone. Sometimes several times a day.

Basketball was the theme of these conversations, but not always the focus.

They were two youngish executives using each other as sounding boards as they made their way in the league.

When he got the top job in Toronto a year and a half ago, Ujiri made Weltman his first priority. MLSE gave them a three-year mandate to remake the Raptors - in time for the 2016 NBA All-Star Game.

They did it in less than one.

Superficially, they're an odd pair.

Ujiri projects largeness, in every sense.

Six-foot-four, impeccably dressed, solicitous, always on.

Weltman is the son of a long-time basketball executive, a lifer in the game. He is a warm, receding presence. Elegant and - if you don't know him - easy to miss. He appears most comfortable in Ujiri's shadow, quite literally.

But if you spend any time around this team, you know they are a matched set.

Weltman has a hand in all of Ujiri's major decisions, often as devil's advocate.

"My role is to help Masai achieve his vision for the team," Weltman says. "He knows who he hired. He knows I'm going to overanalyze things. Probably be a little too cautious at times."

We talk for two hours over lunch. Through most of it, Weltman worries that he's going to come across as puffed up or pompous. He is leery of attracting any attention at all. Fair to say that, at this level in professional sports, it's an unusual trait.

"He's right," Ujiri says later, when I repeat Weltman's self-assessment. "He's the critic, the overanalytical one. He's thoughtful, creative. He wears me out. And then he wears me out again.

"If I want to bitch and scream, if something's nagging at me, that's the first office I go into. Right away, he's on it. Calming. He'll read the situation. He's just one of those guys who, once you listen to him, you know you're going to get it right."

Ujiri is the man who does the deals. Weltman is the one who urges him to go back and get more. So far, they haven't put a foot wrong.

When Ujiri was thinking of taking the top job in Toronto, Weltman did what he'd always done - acted as an ad hoc adviser.

Without asking his friend, Ujiri made Weltman one of his negotiating platforms: "I told [Maple Leaf Sports and Entertainment] that there's one guy I have to get.

Jeff was that important to what I wanted to do."

Once things were certain, he formalized the approach.

"I said, 'Hey, this thing is going to happen. I'm coming right after you,' " Ujiri recalled. Weltman was under contract in Milwaukee.

More importantly, he was happy.

It was pointless to struggle: Ujiri has a way of getting what he wants.

If Weltman is worried about calling attention to himself, so is Ujiri. He knows he's going to lose his consigliere at some point. He wants to that to happen. Just not right now.

Weltman's name is making more frequent appearances on the NBA's rumour mill lately. He's 50 years old - in his prime. Would he leave to take the top job somewhere else?

"I've had a few opportunities," Weltman shrugs. "I told one guy who called, 'I don't know who else you're interviewing. I don't want to be the fifth horse in a four-horse race.' He said, 'If anything, you're the No. 1 horse.' I thought about it. I called him back and said, 'Dude, we have boxes that are still [not] unpacked. It's not the right time.' "I have aspirations to be a GM one day, but I don't know. It has to be right. Part of that is because of the spot I'm in. I love it here.

The city. And, hey, I get to work for my best friend."

Follow me on Twitter:@cathalkelly

Associated Graphic

The Toronto Raptors' Terrence Ross drives to the basket against the Denver Nuggets' Wilson Chandler during first-half action in Toronto on Monday.


With Eakins gone, MacTavish knows he could be next on the chopping block
Tuesday, December 16, 2014 – Print Edition, Page S1

In the kind of graphic admission you rarely hear at a press conference, Craig MacTavish explained why he fired Dallas Eakins as the Edmonton Oilers' coach, some 10 days after giving him a vote of confidence.

"There's blood all over my hands in this, because I put the lineup and roster together," MacTavish said. "And I'm not here to absolve myself of accountability for the situation we're in."

In confirming that he would go behind the bench on an interimbasis, but eventually turn the job over to Todd Nelson for the remainder of the 2014-15 NHL season, MacTavish added: "I had no real good reason to do this, outside of performance. And that's really the bottom line we're all judged by - the performance level of the hockey club, and the record."

Ultimately, 15 losses in the Oilers' past 16 games cost Eakins his job. He finished with a 36-63-14 record in his first NHL coaching position and left with more than 21/2 years of salary owed to him on the four-year contract he signed to replace Ralph Krueger.

The decision to hire Eakins was supposed to end the parade of coaches trying to turn the Oilers around, which began when MacTavish himself was replaced back in 2009 by Pat Quinn. Instead, the Oilers went backward in Eakins's tenure and failed to build on the progress Krueger had made in his one season behind the bench.

All in all, it was an eventful day in the city of former champions, one that had an entirely different vibe from MacTavish's previous meet-the-press event, in which he went to great lengths to defend the status quo. On Monday, before catching a flight to Phoenix for Tuesday's game against the Arizona Coyotes, MacTavish was far more blunt about how deeply his team's problems run and referenced his own fragile position in the Oilers' union.

"Everybody in the organization continues to be evaluated," MacTavish said. "My superiors will continue to evaluate me. We'll evaluate our scouting staff. We've got to make changes. To think this is a coaching issue would be naive. It's deeper-rooted than that. We have to get to the core of it - and we will."

MacTavish wouldn't put a timeline on how long he would stay behind the bench before handing off to Nelson, saying only it would be long enough to get a clearer picture of what's gone wrong. In effect, he's going from the executive suite to the shop floor to see how things tick. The intel he gathers will ultimately guide him with the moves to come.

More than anything, MacTavish and Nelson, who's being promoted from the team's American Hockey League affiliate in Oklahoma City, need to instill some life and joy in the team. As the losses mounted, there didn't appear to be any push-back from the Oilers. They lost in all sorts of ways: Some nights they gave up too many goals; other nights they couldn't score any. You can ponder all the advanced stats in the world, but sometimes the basic ones tell you all you need to know. In a 30-team league, the Oilers were 28th in total goals for and 30th in goals against going into last night's action.

Eight consecutive seasons out of the playoffs earned them a lot of high draft choices, including three No. 1 picks overall, but unlike the Tampa Bay Lightning and the New York Islanders, who managed turnarounds by drafting the likes of Steven Stamkos and John Tavares, respectively, the Oilers didn't show similar improvement behind Taylor Hall and Ryan Nugent-Hopkins, the best of their young bunch.

Up until now, MacTavish has been reluctant to trade any of the organization's young assets and said he wouldn't discuss that possibility "until I get a hands-on understanding of what's happening in [the locker room]. I've got a pretty good understanding of that, but I want ample opportunity to have eyeball-to-eyeball conversations with the core group in hopes that we can move this thing forward before I'm willing to do anything."

At the least the Oilers need to be trending in the right direction when their new downtown arena opens prior to the 2016-17 season. There are starting to be some empty seats in the old one now, something sure to catch the eye of owner Darryl Katz and the new second-in-command at Rexall Sports Corp., Bob Nicholson, the former Hockey Canada president.

Something needs to change, and if it isn't a blockbuster trade, maybe it'll be as simple as landing a highly regarded prospect such as Connor McDavid or Jack Eichel in the 2015 NHL entry draft.

Fans may ponder the long-term benefits of that, and team officials may, in their most private moments, wish for that, too.

From his perspective, MacTavish cannot. He needs to prove to Katz that this team, his baby, is heading in the right direction. Otherwise, he will be like Eakins, looking for a new opportunity.

Follow me on Twitter: @eduhatschek

A captain's last journey
In a fitting tribute to a legendary star known for his accessibility, hundreds of regular fans join politicians, former teammates and current players at icon's funeral. Sean Gordon reports from Montreal
Thursday, December 11, 2014 – Print Edition, Page S1

When the hearse pulled up to the ornate façade of Cathédrale Marie-Reine-duMonde, someone along the steel barricades lining the roadway started clapping, slowly.

Soon, a few hundred people who had braved the chill wind and driving snow were producing a muted tribute of melancholy applause.

Of course they turned up - this is what fans do. Especially when it represents a final opportunity to bid adieu to an icon.

There have been many remarkable manifestations over the past week of the deep respect and high regard in which Jean Béliveau was held.

On Wednesday, there was an obvious one at his funeral.

For several months now, Montreal's police cruisers have been covered in stickers protesting proposed changes to the municipal pension plan.

Officers have also taken to wearing gaudy camouflage pants. But every police car outside the church was immaculate, everyone on hand for crowd control clad in crisp regulation blue.

As befits the stature of the man whose life was being celebrated, the pews inside the edifice - a scaled-down replica of Catholicism's most important church, St. Peter's Basilica in Rome - were occupied not just by legends of the hockey world (Mario Lemieux, Luc Robitaille) and current Montreal Canadiens standard-bearers, but by politicians, business figures and other people of weighty consequence.

Two former Canadian prime ministers and at least three former premiers of Quebec were on hand. Stephen Harper and Philippe Couillard were in the front row, as was Governor-General David Johnston.

"He was an individual who was great in his sport but ultimately even greater than his sport," Harper told reporters on his way into the cathedral.

The Prime Minister, like everyone else, took care to refer to Béliveau as "Mr."

Inside, the coffin bearing the former Habs great, who played 18 years in the NHL and won an astonishing 10 Stanley Cups (he missed the postseason only once), was accompanied to the altar by a sextet of pallbearers, all of them former teammates: Serge Savard, Jean-Guy Talbot, Bobby Rousseau, Yvan Cournoyer, Ken Dryden and Phil Goyette.

When Cournoyer's turn came to speak, he described the quasi-filial relationship he had with his former teammate, at one point his voice becoming strangled with emotion.

"This rose that I wear today, I will keep it for the rest of my life in your memory," he said touching the fresh-cut flower pinned on his left lapel, over his heart. "O captain, my captain, bon voyage."

Club owner Geoff Molson, whose first childhood memory of Béliveau was of an impossibly tall man leaning over to say hello, said "he was the man whose footsteps our parents wanted us to follow."

Dryden, as is his wont, contributed a little lyricism in his eulogy to the first NHL road roommate he ever had, saying, "This is not a time to say goodbye, this is a time to say thank you."

He continued on to say that Béliveau's greatest accomplishment "may have been that he was a very nice man."

"As a great star, he knew he had the responsibility not to live as a star, but as a good person," the Hall of Fame goaltender said.

That good person, who died on Dec. 2 at 83, had a knack for being accessible - his home number is listed in the phone book, and it seems as if nearly everyone in Montreal has a story about a Béliveau encounter.

Thus, it was fitting that a few hundred seats were set aside for regular folk, who mourned alongside hockey power-brokers such as NHL commissioner Gary Bettman and Toronto Maple Leafs president Brendan Shanahan, as well as legendary former players Darryl Sittler and Gilbert Perreault (among a great many others).

Above all else, Béliveau symbolized success and elegance. As Molson put it, "His victories were our triumphs."

In the crowd outside, one spectator had brought a giant provincial flag, while another had a Maple Leaf with Béliveau's number four in the centre.

After the service, the Canadiens flag that had covered the casket was gathered up by Guy Lafleur, Béliveau's Hall of Fame teammate, and given to his widow, Élise.

The spectators who had braved the weather were joined by a few hundred new arrivals, and when Béliveau's family emerged, a louder, more rousing cheer went up.

As the attendees spilled out onto the steps of the cathedral, the words of several current Habs suggested Béliveau's passing has left a deep impression.

Forward Max Pacioretty told a clutch of reporters that his example "motivates all of us to be better people."

"This past week has been overwhelming and emotional, it's something special. I hope to never forget this feeling," he said.

Associated Graphic

Pallbearers carry Jean Béliveau's casket after the funeral service Wednesday for the Habs legend in Montreal.


Montreal Canadiens fans show support at the funeral for Habs legend Jean Béliveau in Montreal on Wednesday.


The end of a chapter
The ceremony at the Bell Centre to honour Le Gros Bill was solemn. It was a night to remember the former Habs great, and perhaps also a fading past, Sean Gordon writes
Wednesday, December 10, 2014 – Print Edition, Page S1

MONTREAL -- There is no official tally of the people who trooped through the Bell Centre earlier this week to pay their respects to former Montreal Canadiens great Jean Béliveau, who died last week at 83.

They streamed in over two full days, so it had to have been in the tens of thousands. Béliveau's widow, Élise, flanked by their daughter Hélène and granddaughters Magalie and Mylène, insisted on personally thanking each and every visitor.

Whenever the octogenarian felt as if she needed a rest, they shut the doors. Nobody complained about the wait.

It seems Le Gros Bill, a man about whom no one ever had a bad thing to say, may not even have been the most gracious member of his family.

As the ceremonies began prior to Tuesday night's game, Élise Couture-Béliveau and her family were at their familiar station three rows behind the Habs' bench. But one seat - the one to her right with Béliveau's familiar No. 4 affixed to the seatback - was conspicuously empty.

When an errant puck flew over the glass early in the first period of Tuesday's game, the first home date since Béliveau's passing, the memento was quickly passed along the rows until it found the white-haired lady in row EE of Section 102.

It wasn't the most poignant moment of the evening involving the Béliveau family.

Whenever a minute of silence is observed in a hockey arena, there is usually audible chatter, a few whistles. Not this night.

It broke with a thunderous ovation and, as the applause rained down, Couture-Béliveau covered her face, then dabbed her eyes, bowed her head. After a time, she waved both arms above her head and appeared to mouth "enough."

The crowd kept cheering. The great Sports Illustrated writer Michael Farber once opined that "only two organizations in western civilization truly get ceremony: the House of Windsor and the Montreal Canadiens."

He's onto something. If you're going to celebrate the life of a stately, elegant figure, gaudy simply won't do.

So it was that at the beginning of the ceremony, rink announcer Michel Lacroix muted his legendary baritone to introduce a video tribute to Béliveau that was projected onto the ice, after which the usual minor-hockey flag-bearers - both wearing No. 4 of course - took a twirl around the ice in silence. This was not an occasion for pump-up music.

Then the players trooped out onto the ice - again, in silence - to line up across the blue line.

On this occasion, the opposition was provided by the Vancouver Canucks, who made a point of going to Béliveau's visitation Monday as a team (the Habs won 3-1 Tuesday). They, like the Habs, skated backward a few dozen feet to get a better look at a second video tribute set to Ginette Reno's Ceux qui s'en vont (or Those Who Leave).

Images of grief and bereavement are often arresting, and the image that may define Béliveau's passing may well be that of his widow and surviving family at Tuesday's game.

Or it may be that of Hall of Fame winger Guy Lafleur, his spiritual heir as franchise-defining star, kneeling alone on Monday evening before his former teammate's coffin and bronze likeness.

"He was my idol and he became my friend," Lafleur told reporters afterward. "Today I lose both."

This level of heartbreak is not commonplace among professional athletes, but then none of the usual rules apply to titans.

In a sense, Lafleur understood how Béliveau must have felt at the passing of Maurice (Rocket) Richard, an all-time great as a player and a figure of no small social consequence in Quebec.

If Richard became synonymous with the Quiet Revolution and Québécois standing up to the boss - and he was, whether he was comfortable with it or not - there was never any question that Béliveau would be anything but the boss.

The fiery icon of the 1940s and early 1950s gave way to the cool, above-the-fray exemplar of the 1960s, who in turn made it possible for the embodiment of the 1970s, Lafleur, to express himself.

Of the Canadiens who have come since, only Patrick Roy - a far pricklier character than Béliveau - can plausibly be added to the legends' line of succession.

And so perhaps the Habs also commemorated a fading past on Tuesday when the club bid a final official farewell to Béliveau. His funeral will be held Wednesday.

Associated Graphic

Élise Couture-Béliveau, standing next to her husband's empty seat, salutes the crowd at the Bell Centre prior to the game between the Montreal Canadiens and the Vancouver Canucks Tuesday. Habs legend Jean Béliveau died last week at 83.


Leafs focus on 'process,' not points
Even after going 7-1-1 in past nine, club's brain trust is worried about possession metrics and poor play
Friday, December 12, 2014 – Print Edition, Page S2


He is but one voice in the front office, but Kyle Dubas has quickly become an influential one for the Toronto Maple Leafs.

Far from simply working with the team's new analytics department, the Leafs' 28-year-old assistant general manager has been handling a little of everything in his first season: scouting, working with the farm team and building up the player development personnel into one of the largest groups in the NHL.

But his most important contribution might be simply adding some perspective.

For years, the Leafs have had a complacency issue when they've risen in the standings early, as they have each of the past four seasons.

For whatever reason, the notion that they were okay as long as they were in a playoff spot has been prevalent among executives, staff and players, even if they were frittering away games again and again.

"We're still in eighth place," former goalie coach François Allaire said back in February, 2012, prior to the Leafs going 6-13-3 to end the year.

"Nobody is looking at how high we are in the standings," former executive Dave Poulin said midway through last season, before the wheels fell off again.

Contrast that with what Dubas had to say on Thursday, when on the heels of back-to-back wins he explained to reporters that no one in the organization was satisfied despite the Leafs holding one of the better records (16-9-3) in the Eastern Conference.

Their win over the Detroit Red Wings a night earlier - their seventh victory in nine games - had raised more red flags, as Toronto was badly outshot and outplayed and won thanks only to their netminder and a shootout.

Dubas doesn't believe that's a long-term recipe for success. And the word he used again and again on Thursday was "process," stressing that the how behind Toronto's wins was more important than how many.

"I don't think you have to be someone that's invested in analytics to know that being outshot 42-19 and coming out of the game with a shootout win in large part thanks to James Reimer [isn't ideal]," Dubas said.

"We're not a group, of management and the coaching staff, that wants to hang on and win games.

We want to find the most efficient way to do so and to be able to close out games a little bit better."

There are lot of ways to break down the Leafs season to this point, but this simple exercise might be the most instructive of how unsettled their position is.

After beating Detroit, whom Toronto will face again on Saturday, the Leafs have 35 points after 28 games.

Over a full season, that's a 102.5point pace, which would qualify for the playoffs by a large margin.

But it's also only slightly better than the league average, which is about 31.5 points per 28 games.

In a long season, that 3.5-point margin can slip away pretty easily.

The trouble, too, is that Wednesday wasn't a one-off situation. It may have been the Leafs' weakest game territorially this year, but this is a team that, while improved from a year ago, still ranks poorly in all of the possession metrics available.

According to, Toronto is the fourth-worst possession team in the league, a problem that has plagued the organization for three seasons now under coach Randy Carlyle.

It's a weak point that Dubas has spent considerable time on in the first 21/2 months of the season - and one he says that everyone is committed to fixing.

"We work on that every day," he said. "The coaching staff is very inquisitive about it, which is good and a lot of fun - to have that discussion. We certainly have our ideas. I don't think sharing them [with the public] is overly helpful.

"It's a process ... Everyone who's been here is aware of the issues that have been there. Now we're just trying to all work together to correct them and move ahead. That's been the most enlightening part of this for me and the part that makes me the most excited.

"There's nobody content that we've gone 7-1-1 in this stretch," Dubas added. "There's no one really content with it."

Associated Graphic

The Leafs were outshot 42-19 by the Red Wings on Wednesday but prevailed because of goalie James Reimer's stellar play.


Saturday, December 6, 2014 – Print Edition, Page B1

FORT FRANCES, ONT., TORONTO, KITIMAT, B.C. -- For almost a century, the pulp and paper mill that hugs a sharp bend in the Rainy River in Fort Frances, Ont., provided work for members of Bob Armit's family.

Mr. Armit's grandfather, Ed Calder, helped build the mill more than 100 years ago. His father, Charles Armit, worked in the mill's logging camp and later became an accountant at the mill.

Bob Armit worked there for 28 years and his son Victor another 16.

But Victor may be the end of the line. After idling one of the plant's three paper machines in 2012, Resolute Forest Products Inc. officially announced the closing of the operation on May 6, eight days before the facility's 100th anniversary.

Unless a buyer can be found, the mill will no longer provide jobs for younger Armits - or the next generation of any family in the town of 7,700.

"There's something wrong with the system if they let it go," says Bob Armit, 75, who worked parttime at the mill during his highschool years, joined full-time in 1958 as a 19-year-old and moved on in 1986. "I can't believe that they would shut it down."

As the one-kilometre length of the mill physically looms over Fort Frances, talk of its future - mainly whether there is one - dominates the town's conversation.

"We're hanging on by our fingernails," Mayor Roy Avis says.

The closing of the Fort Frances mill is an immediate example of how an industry that has been a pillar of the Canadian economy for centuries has crumbled.

When the forest products industry was at its height, such domestic giants as Abitibi-Price Inc., MacMillan Bloedel Ltd. and Noranda Forest Inc. employed more than 300,000 Canadians making newsprint, tissues, fine paper, cardboard, floor joists and wall studs. They were global powerhouses that shipped those products around the world.

That era has ended like the thud of a 25-metre-tall black spruce tree crashing to the ground, as laid-off workers from Campbell River, B.C., to Grand Falls-Windsor, Nfld., and scores of communities in between can testify.

The numbers are startling. As recently as September, 2004, 308,664 Canadians earned a living from logging, paper making and wood products manufacturing.

A decade later, the industry employed just 190,651 people. That loss of 118,000 jobs is more than one-third of the industry's work force and for the most part, high-paying jobs with good benefits and pensions.

It's the equivalent of eliminating every job in the auto assembly and auto parts sector in Canada.

It also underlines how the devastation of the country's manufacturing sector has affected communities coast to coast.

In 2000, forestry outperformed the auto and oil and gas industries to rank as the single-largest contributor to Canada's trade surplus, with a positive balance of $38-billion. By last year, the surplus tumbled by half to $19.1-billion.

Forest products provided 3 per cent of Canada's gross domestic product two decades ago. Last year it was 1 per cent.

The names of those corporate giants, once proud symbols of Canada's elite status in forest products, vanished in a convulsion of bankruptcy protection filings.

The biggest decline has been in pulp and paper, where the culprit is obvious - the Internet. As consumers shunned traditional printed newspapers, magazines and telephone directories in favour of websites and mobile apps, print advertising revenues plunged and publishers shrank their publications or stopped printing altogether.

There were 50 paper mills in Canada in 2000 and now there are 30, according to data compiled by Finland-based consulting firm Poyry PLC.

The drumbeat of closings in the pulp and paper sector continued Friday as Resolute announced that it will shut a mill in Iroquois Falls, Ont., on Dec. 22 - eliminating 180 jobs - and halt production at paper machines at two other mills in Quebec.

But both the lumber side of the business and pulp and paper have been battered by a series of blows: The dramatic rise in the value of the Canadian dollar to as high as $1.10 against its U.S. counterpart pulverized the competitive position of the industry's exports; U.S. duties on Canadian softwood lumber raised the industry's costs; The Great Recession of 2008-09 and the massive U.S. housing slump.

In many ways, the causes don't matter - especially to the thousands of people who lost their jobs at pulp and paper mills in Kitimat, B.C., East Angus, Que., Miramichi, N.B., and the 400 people who are out of work in Fort Frances.

While lumber has rebounded somewhat with the recovery in the U.S. housing market, the jobs that depended on machines turning out newsprint are likely gone forever.

"Newsprint coming back?" asks Frank Dottori, founder of Tembec Inc. and a renowned figure in the industry.

"I would say that's just like the horse and buggy. Could they have gotten bigger, cheaper, faster horses to offset the car? No. You can't cope with new technology. The world's moved on."

The best jobs in town

Horses and buggies were still the dominant mode of transportation in Fort Frances when Ontario and Minnesota Paper Co. turned out its first roll of paper on May 14, 1914.

Abitibi-Price, which eventually became Resolute, was incorporated just a few months before that.

The Canadian mill was paired with Minnesota and Ontario Paper Co. across the Rainy River in International Falls, Minn. The U.S. mill opened in 1910.

The two mills are still joined by a pipeline that snakes along the International Bridge that joins the two towns, which sit about midway between Thunder Bay, Ont. and Winnipeg. Until the Fort Frances mill ceased operating, it shipped pulp in slurried form through the pipeline to the U.S. side.

"They were meant to be together forever," says Bob Anderson, mayor of International Falls and a 51-year veteran of the U.S. mill, the last 25 of which he spent as public affairs manager.

The combined corporate ownership of the mills ended in 1995, when then-owner Boise Cascade included the Fort Frances mill in a package of three facilities it sold.

The towns are also closely linked. Every year between the Canada Day and Independence Day holidays, they stretch a rope across the river for an annual tugof-war contest.

On a recent minus 13 degree morning, steam rising from the U.S. mill nearly obscured the Canadian mill and the International Bridge that Mr. Anderson travels across regularly during the winter months on his way to curl in Fort Frances. There's no curling rink in International Falls, although it does boast a 7.9-metre-high statue of Smokey the Bear.

The Fort Frances mill made specialty papers for books, coloured paper for flyers and paper for school workbooks. Reader's Digest and Bantam Books were among its customers.

"We never knew what the word downtime was," says Mr. Avis, 68, a lifelong resident of the town and a second-generation mayor.

"The mill ran 24-7, 365 days a year."

Working at the Fort Frances mill meant you had one of the best jobs in town, "no doubt about that," says Bob Armit, who started as a shipping clerk and later became a supervisor.

"A lot of people have been very fortunate to have had that employment for decades," Victor Armit, 53, adds in an interview at his parents' sun-drenched house along the river, five blocks from a street that bears his family name.

"I was fortunate enough to get about 15 years in."

Companies that depended on the mill are beginning to struggle.

The DeGagne family, which has operated an independent contracting company cutting wood for the Fort Frances mill since 1974, survived the 2009 bankruptcy protection filing made by Resolute's predecessor AbitibiBowater Inc., but they have now lost a customer that bought about half the logs they cut.

Since the mill ceased production, Leon DeGagne Ltd. has been sending trucks it once sent to Fort Frances to a mill in Thunder Bay, a four-hour drive one way.

"It's a longer haul, so it takes twice as many trucks, takes twice as many men and there isn't twice as much money there," president Leon DeGagne says.

Shanda DeGagne-Begin, secretary-treasurer and daughter of Mr. DeGagne, says her husband lost his job at the mill and is now working for DeGagne. "Most of our friends live down east near the GTA [Greater Toronto Area] or out west, they say 'oh, has he found another job yet.' When you're in a small town like this it's not as simple as going down the street and getting a job."

The impact on other businesses shows how much the entire town depends on the mill.

People are postponing eye exams and putting off buying new glasses, says optometrist Bruce Lidkea, who is running the business his father started in 1952.

Dr. Lidkea is also the pipe major of the Fort Frances Highlanders, the local pipe band that has existed since 1956.

"The closing of the mill has decimated my band," he says. At least 10 members of the band have moved away.

The new scarcity of high-paying jobs in Fort Frances has led to a migration from the town and the reserve, even before Resolute shut the kraft mill and halted production on one of the paper machines in 2012.

Sherry George was one of 10 people laid off from the mill in 2009 when AbitibiBowater was in protection from creditors under the Companies' Creditors Arrangement Act.

Ms. George found a part-time job at the Fort Frances Museum in November of that year before becoming curator in 2011.

Her husband James George owned a woodland business running a slasher - which cuts trees to 2.4-metre lengths to fit into trucks - and doing subcontracting work for others in the bush.

The rising costs of fuel, safety equipment and parts, combined with the low returns from logging, led him to sell his machines and other equipment in 2010.

He has been working in road construction and logging in the Alberta oil patch since then while Ms. George stays in Fort Frances.

The finances of the municipal government have already been dealt a blow, however, because the mill's taxable assessment fell to $12.8-million this year from $22.6-million in 2009. So the mill's taxes will provide 12 per cent of the town's tax revenue this year, down from 18 per cent in 2009.

The assessment will fall another $3-million next year, cutting the revenue contribution to 8 per cent.

"You're not going to see the real impact until four or five years down the road when you should have [repaved] this street here and you can't do it or you should have fixed those water lines and you're not going to fix them," Mr. Avis says.

Communities across the country battered by the shutdowns of their largest employers know what he faces.

In Kitimat, B.C., nearly 535 workers lost their jobs after West Fraser Timber Co. Ltd. closed its Eurocan pulp and paper mill in 2010.

"That was a big loss when that shut down. The mill had all those direct jobs there, plus all the spinoffs," Kitimat Mayor Phil Germuth says.

In Miramichi, N.B. - a forest products hub in the late 1990s - 10 wood and paper mills in and around town employed as many as 3,000 workers. Today, two small wood product mills remain, employing about 250 people.

"It's a huge hit when 20 per cent of your work force doesn't have anywhere to work any more," says Jeff MacTavish, a born-and-raised Miramichier who is director of economic development for the municipality of 18,000.

Because the industry is so interconnected - with different mills using different parts of the tree, production from one facility generating waste that becomes the raw materials for another, and many mills sharing transportation and other services - the closing of the pulp and paper mill in 2007 set off a domino effect where the business was suddenly uneconomic for other producers.

"All these mills were reliant on each other," Mr. MacTavish says.

"It just cascaded down on everyone."

Wade Hallihan was caught in that cascade. He was working security at the lumber mill in nearby Blackville, which employed about 150 workers in a town of 1,000.

"At the time it was quite a blow," says the 41-year-old Mr. Hallihan, who now sells cars at the local Mazda dealership. "It was the heart and soul of Blackville."

The hunt for a buyer

Mr. Avis has spent some time since the Fort Frances mill closing was announced trying to find a buyer.

The most promising opportunity appeared to come from Expera Specialty Solutions LLC of Kaukauna, Wis., but it recently bought a mill in Maine, so community leaders fear it has lost interest in the closed mill.

Hope that a buyer might be found was restored last week when Resolute agreed to heat key parts of the mill this winter so that any buyer will be able to restart it.

But the key issue in finding a buyer, Mr. Avis and others believe, is that Resolute still controls the rights to harvest timber in the area and therefore the price of wood.

"There's a forest licence out there and what we've been told is it says on the licence to supply wood to the Fort Frances mill," says Sarah Mainville, chief of Couchiching First Nation. "To me, that's a package, the kraft mill and the sustainable forest licence, so if Resolute refuses or cannot make a business operating the kraft mill, then I think the forest licence shouldn't stay with Resolute."

Seth Kursman, Resolute's vicepresident of corporate communications, says the forest products company has offered the same deal on wood to all the companies it has spoken to about buying the mill. Those include Canadian, U.S., European, Chinese and other Asian companies.

"If Resolute did the harvesting, fibre would be delivered on an open book, full transparent, true cost basis," Mr. Kursman says. "Parties looking at the mill were also given the option of harvesting their own fibre, with saw-logquality logs going to the sawmills and pulp-quality logs going to the pulp mill."

He notes that the mill posted an operating loss of $88.3-million between 2009 and 2014.

Ms. Mainville spoke at a recent protest rally in the town, where she urged the provincial government to intervene.

An operating mill provides some hope and opportunity for younger generations to remain in the area, she notes. Some members of her community are working in the Alberta oil patch, while some others are away four days a week hauling logs to Thunder Bay and elsewhere.

"It's not just our kids in high school that don't know what the path is, I think it's all the highschool kids in the district."

Mill town meltdown Across Canada in reccnt years pulp and paper mills have shut down and put tens of thousands out of work. The industry has been battered by the strong Canadian dollar, duties on lumber, and the U.S. housing slump brought on by the recession of 2008-2009.


Plant, locution and year of closure

1. Smurfit-Stone Container, Bathurst, N.B., 2005 2. Smurfit-Stone Container, New Richmond, Que. 2005 3. AbitibiBowater, Stephenville, Nfld., 2005 4. Domtar, Cornwall, Ont, 2006 5. Western Forest Products, Woodfibre, Squamish, B.C., 2006 6. AbitibiBowater, Belgo mill , Shawinigan, Que., 2008 7. Domtar, Gatineau, Que., 2007 8. UPM-Kymmenc, Mirimichi, N.B, 2007 9. AbitibiBowater, Dalhousie, N.B., 2008 10. AbitibiBowater, Grand Falls-Windsor, Nfld., 2009 11. Catalyst Paper, Elk Falls, B.C., 2010 12. West Fraser Timber, Kitimat, B.C., 2010 13. Resolute Forest Products, Brooklyn, N.S., 2012 14. Resolute Forest Products, Fort Frances, Ont., 2014 15. Resolute Forest Products, Shawin igan.Que. 2014 16. Cascades, East Angus Ont., 2014 17. Resolute Forest Products, Iroquois Falls, Ont., 2014

Associated Graphic

Steam rises from the Packaging Corp. of America paper mill in International Falls, Minn.


Bob Armit (left) and his son Victor both worked at Resolute's mill in Fort Frances, Ont.


Fort Frances Mayor Roy Avis: 'We're hanging on by our fingernails.'


Shanda DeGagne-Begin watches her father Leon DeGagne work on a logging machine model.


A Fort Frances sign on the Trans-Canada highway F


Protesters march to the shuttered Resolute plant.


Fort Frances optometrist Bruce Lidkea says people are putting off buying new glasses.


Sherry George was one of 10 people laid off from the Fort Frances mill in 2009.


Sarah Mainville, chief of Couchiching First Nation, is hoping for a buyer for the Fort Frances mill.



Tuesday, December 09, 2014


A Saturday Report on Business feature on forestry included incorrect information in a graphic. It said Cascades Inc. closed a mill in East Angus, Ont. In fact, East Angus is in Quebec.

As a global oil showdown between stalwart Saudi Arabia and the upstart U.S. shale industry sends prices spiralling ever lower, Canada is caught in the middle
Saturday, December 13, 2014 – Print Edition, Page B1

Ottawa, Al Khobar, Saudi Arabia -- In the high-stakes contest between the United States, the biggest shale oil producer, and Saudi Arabia, the biggest oil exporter, America has blinked first.

The OPEC refusal to cut production at its November meeting was widely seen as the declaration of a price war against booming U.S. shale oil producers, which had sent their country's oil production soaring. Saudis had watched as their market share dropped precipitously in the world's biggest oilconsuming nation, and they wanted to send a clear message across the global energy market that they weren't about to back off.

Oil prices have been in freefall ever since. Brent crude, the global oil benchmark, sank another 3 per cent Friday to $61.85 (U.S.) a barrel, while West Texas intermediate, the U.S. benchmark, dropped 3.6 per cent to $57.81, extending its slide from well over $100 a barrel in the summer.

If the global oil standoff pits the industry stalwart Saudi Arabia against the surging U.S. rival, other global players are coping with the pricing fallout, including Canada. Oil companies around the world are being forced to revisit their spending and production plans for 2015, and in the offices towers of downtown Calgary, those changes are already well under way.

Cenovus Energy Inc. this week slashed its capital budget by 15 per cent and signalled more to come. Canadian Natural Resources Ltd. has said a quarter of its $8.6-billion (Canadian) budget is "flexible" and could be deferred if prices don't recover. A growing number of smaller producers have cut budgets and dividends in a bid to conserve cash and ride out the storm.

More cutbacks are likely to follow in the weeks ahead, and expectations that Alberta could double oil sands production over the next decade are suddenly in doubt. After all, new oil sands projects on the drawing board have costs per barrel well above current market prices.

For Canada, future projects sidelined or scaled back will act as a drag on the national economy, which has for years benefited from heavy spending in the energy sector while other sectors such as manufacturing struggled. The case for the many new pipelines currently in various stages of planning will be weakened.

Analysts warn it could take many months - even a full year - before global oil supplies fall enough and demand catches up, so that prices recover somewhat.

The oil slump is expected to affect most quickly on production levels in the United States, where the shale boom has added four million barrels a day of supply in the past few years and prompted predictions that the country would become the world's largest crude producer by 2016.

Already, the number of new shale drilling licences has dropped by 40 per cent, plans are being scaled back, and rigs are being pulled out of the field. With relatively short lead times from planning to production, analysts are cutting their expectations of supply growth for next year. As Saudi Oil Minister Ali al-Naimi predicted two weeks ago, the market is beginning to "stabilize itself."

But it will take a while for the Saudi strategy to play out. American producers are still expected to continue to boost production through the first half of next year, although at a slower rate than 2014. Meanwhile, global demand growth is slowing. That will keep pressure on prices at least through the first half of 2015, unless OPEC does cut production or there is a sharp supply disruption caused by political upheaval.

Companies adjust

On Friday, the International Energy Agency shaved its forecast for 2015 demand by 230,000 barrels a day - the fourth time in five months that it has reduced its forecast - citing economic weakness in Russia and China. The Paris-based agency also raised its expectation for non-OPEC oil production in 2015, despite lower prices.

Oil companies are seeing their revenues nosedive, share prices sink, and capital market players grow wary about lending. Stateowned companies are facing pressure to maintain the flow of revenue to government coffers even as their cash flow dries up. Capital discipline had been the mantra among major oil companies heading into 2014; retrenchment and focus on high-grade prospects will be the watch words as the year ends.

Even as U.S. producers respond, companies operating in high-cost, capital-intensive areas like Canada's oil sands or Brazil's offshore will defer and even cancel planned projects, although the impact on actual production will take longer to materialize.

It's too early to call "mission accomplished" for the Saudis. The OPEC leader is playing a long game in order to preserve its oil market share by making life difficult for the high-cost oil producers, and its strategy is showing early signs of success.

The quick reaction time by some of the high-cost producers, notably the American shale oil drillers, is why one of the world's foremost oilmen, Sadad Al-Husseini, the former executive vice-president of Saudi Aramco, the world's biggest oil and gas company, is becoming bullish on oil even as Brent prices sink to the low $60s.

"If you go down low enough, as we are now, you'll get to the point where there is little investment, which is what we're going through," he said in an interview in Al Khobar, the Saudi city filled with Aramco employees in the country's oilrich Eastern Province. "You will force the excess out of the market and demand will take you back up. That is what is about to happen."

'Strength of the profit motive'

Mr. Al-Husseini, 67, worked at Aramco until his retirement in 2004 and was a member of its board and its management committee. During his Aramco career, he was instrumental in making 20 discoveries, including vast gas fields and the central Arabian and Red Sea oil fields. He is now president of Husseini Energy, an oil consultancy based in Bahrain that advises financial institutions and the oil services industry.

He admits he underestimated the "strength of the profit motive" that turned the United States into a shale oil powerhouse. Since 2010, U.S. shale oil production is up by three million barrels a day. But he feels confident that waning investment is already hitting production growth and that prices won't fall much farther as the supply-demand balance tightens up.

"When prices come down 40 per cent, you're not going to keep spending like there is no change," he said. "My guess is that by the end of second quarter of 2015, there will be a returning confidence in oil. Does that mean it will go to $115? No, that was never a sustainable number. Could it go as high as $80, maybe $90? Sure."

Unlike some of their more vulnerable OPEC partners like Venezuela and Nigeria, the Saudis can afford to be patient and wait for the market to recalibrate. But it too faces fiscal pressure as it spends heavily to diversify its economy and provide social benefits to a young population. The International Monetary Fund estimated early this year that Saudi Arabia needed an oil price of $89 (U.S.) a barrel to keep its budget out of the red, up from $80 in 2012.

U.S. shale oil is generally far more expensive to produce than Saudi oil, which has the lowest pumping costs in the world. Shale oil wells deplete rapidly, meaning a lot of them have to be drilled constantly to keep production intact.

The upshot? Shale oil output is much more sensitive to falling prices than Saudi oil, and the market is beginning to work its magic. Although the U.S. rig count remains well above the level of a year ago, it saw its biggest drop in two years this week and has declined in six of the past nine weeks. And it's expected to drop sharply next year.

Estimates of break-even costs for new production in the three key shale basins - the Bakken, Eagle Ford and Permian - range from $60 to $70 a barrel. But there is wide discrepancy in the actual break-even costs for each well, and companies will focus spending on their best prospects.

"Balance sheets are going to force discipline," said David Pursell, an analyst at Tudor Pickering & Holt Co. in Houston.

"When we look at basin economics, there's just a handful of core areas that make economic sense to continue to drill at even $70 crude... Companies will drop rig count very quick to stay within cash flow so they don't see their balance sheets unravel. And they can unravel very quickly if they maintain the current activity level into 2015 at a much lower oil price."

Most vulnerable are the smaller exploration and production (E&P) companies that have taken on debt as their spending outpaced their cash flow, and Mr. Pursell said the high-yield debt market on which they rely is already showing signs of nervousness. Companies like Range Resources Corp. and SandRidge Energy fall into that category.

The Tudor analyst sees the rig count dropping by nearly a third from the recent 1,600, but said it will still take several quarters before production growth slows.

He predicts U.S. production will rise by 592,000 barrels a day next year and 226,000 in 2016, after growing by nearly one million barrels a day this year.

In a release Friday, the U.S. Energy Information Administration also indicated it will take time for the impact of lower prices to be felt in the supply picture. The EIA forecast that U.S. production will average 9.3 million barrels a day in 2015 - up from 8.6 million in 2014 and closing in on Saudi's estimated 9.60 million daily output.

A market decision

Mr. AL-Husseini is no fan of the theories that the decision by OPEC (read: Saudi Arabia) not to trim the cartel's 30-million- barrel-a-day production quota at its November meeting in Vienna was a political act of war aimed at punishing Russia and Iran for their support of the al-Assad regime in Syria or aimed solely at choking off U.S. shale production.

He said it was a market decision designed to trim high-cost production wherever it lies, including Brazil's offshore fields and Canada's oil sands, to end the oil glut. An OPEC production cut would have only propped up prices, he noted, "subsidizing the high-cost oil at the expense of low-cost oil," the latter being Saudi Arabia and Gulf allies such as Qatar.

Among the high-cost producers, there is no doubt that U.S. shale oil would be quickest to trim investment and thus output. Mr. Al-Husseini said that, even if oil prices were to remain fairly strong, the shale industry's ability to deliver ever-higher production would not be assured. That's because shale wells are short-lived creatures.

His research says that shale oil (and natural gas) wells decline at a rate of 50 to 70 per cent a year, "requiring intense capacity replacement drilling."

That means shale fields require more and more drilling to maintain production and that gets expensive. At the huge Eagle Ford shale field in southern Texas, some 4,500 new wells will have been drilled in 2014, of which 3,800 are required just to maintain production.

One major test for producers will be the degree to which they can squeeze costs out of the supply chain, thereby lowering their break-even price.

U.S. shale producers say they are doing just that. Houstonbased EOG Resources Inc. has slashed the average well cost in North Dakota's Bakken play to $8.7-million from $10.5-million two years ago. In the Eagle Ford, it reduced the number of days to drill a well to 12.5 from 22.7 in 2012.

Pioneer Natural Resources Co. said last week that it was still planning to pursue production growth of between 16 and 21 per cent next year, with its key assets in the West Texas Permian basin. Pioneer chief executive officer Scott Sheffield said the Saudis had "declared war on the U.S. oil and gas industry," and the company is responding by driving down costs and reevaluating its drilling program. He acknowledged that a sustained period of prices below $60 a barrel could force further cuts.

The oil sands challenge

But high-cost producers across the globe are facing similar challenges.

London-based oil economist Amrita Sen said Canada's oil sands remains the world's highest-cost production in terms of new projects, with the U.S. shale and the offshore in Mexico and Brazil not far behind.

Existing oil sands operations aren't likely to be cut off any time soon. Analysts say currently producing projects have average per-barrel costs in the mid-$50s to mid-$60s, depending on the type of operation. "The advantage that oil sand producers have over, for example tight oil producers, is that they typically invest for the longer term as they rely on a steady stream of production over an extended period of time, making them less susceptible to temporary price fluctuations," Ms. Sen said in a report this week.

Cenovus, for example, is slowing spending on longer-term projects that are still in early development stage, including Narrows Lake, Telephone Lake and Grand Rapids, while it continues to advance its Foster Creek and Christina Lake projects that are closer to completion. Under that capital plan, its production won't be affected by today's lower price until five years from now.

The same is true for most deep-water offshore fields, where companies may defer exploration or delay sanctioning new projects, but are unlikely to reverse course on those that are under development. Still, lower revenues will force an industrywide cutback on activity.

Ms. Sen said the seeds of another cycle are now being planted. The current drop in prices will lead to lower-than-expected production in a few years, even as consumers increase consumption. U.S. gasoline demand is climbing at a rate well above its recent five-year average. And that classic supply-demand response could trigger a snap-back in prices in two or three years.

At the moment, though, "it's hard to say anybody that relies on oil prices wins when prices are below $60 instead of $100 plus," said R.J. Dukes, senior analyst with the Wood Mackenzie consultancy.

The oil slump is giving Canadians a long-awaited break at the pump, but is a worry for the country's energy future. Since new oil sands projects are expected to have per-barrel costs of $80 or higher, they may no longer make sense, and the country may need to look to other sectors for new economic drivers.

Associated Graphic

A Saudi takes in the view from a dune looking over the Shaybah Gas Oil Separation Plant, a major gas and oil production facility located in the empty quarter desert.



Sadad Al-Husseini: 'If you go down low enough ... you'll get to the point where there is little investment.'


A ground flare burns gas at a well near Ray, N.D.


The Khurais oil field, about 160 from Riyadh.


Williston, N.D.


Oil from the Bakken shale field at a shipping depot near New Town, N.D.



Monday, November 24, 2014 – Print Edition, Page B1

Women make up just 7.8 per cent of seats on the boards of energy companies and 11 per cent in mining and forestry firms

Inthe financial services, utilities, health care, consumer staples and telecommunications sectors, women account for between 20 per cent and 25 per cent of corporate directors

The sector gap: Why are resource firms so far behind on gender?

When it comes to putting women on company boards, Canada has two solitudes: the resource sector and everyone else.

Despite years of high-profile pressure to bolster the representation of women on boards - including new diversity disclosure rules from regulators taking effect Dec. 31 - Canada's resource companies remain far behind the curve. Women fill just 7.8 per cent of seats on the boards of energy companies in Canada and 11 per cent in mining and forestry firms.

In most other sectors - including financial services, utilities, telecommunications, health care and consumer staples - women now account for between 20 per cent and 25 per cent of corporate directors, a proportion that has been growing rapidly as companies respond to calls from regulators, shareholders and advocacy groups for greater diversity in senior roles.

Calgary-based corporate director Stella Thompson, a retired Petro-Canada executive, says the slow pace of improvement on board diversity in the energy sector is becoming an embarrassment for women in Alberta's oil patch.

"There are lots of capable women to help with boards," she says. "You don't necessarily have to be the CEO of an oil company - you need a few of those, but you don't need all of them."

Not all resource companies are dragging their feet, and some of the largest firms have made major strides to add multiple women to the boards. But they remain a minority, and the slow pace of change means the sector is falling behind as other industries move more quickly to embrace diversity.

A review of Canada's largest 251 companies in the S&P/TSX composite index as of Oct. 21 shows 55 per cent of energy companies have no women on their boards, and 42 per cent of mining and forestry companies have no women, compared with just 16 per cent of all other firms in the index.

Ms. Thompson believes no men in Calgary's tight-knit energy community are against the idea of diversity, but it has not become a priority for many, either.

They are accustomed to filling boards with colleagues who previously worked together, were joint-venture partners or helped form startup companies, she says. They often belong to the city's top three private clubs and even live in the same exclusive neighbourhoods in Calgary.

"There's trust and friendship, and it has worked well," she says. "Many of them have made lots of money. It's very comfortable and it's also very efficient for them, and there's no hassle - they've done this before they all know each other, and they just get together and move through whatever you have to do ... So in their minds there's no need or desire to change."

Success stories in the resources sector, however, serve to highlight how much more can be done for those who make the effort.

Vancouver-based copper miner Turquoise Hill Resources Ltd., for example, has both a female CEO - Kay Priestly - and a female incoming board chair, Jill Gardiner. The company, which is controlled by global mining giant Rio Tinto PLC, currently has three women on its eight-member board, but will have two after Ms. Priestly retires at the end of this month.

"The practical reality is that it often takes an individual to really get behind finding women for these roles," says Ms. Gardiner, who credits Ms. Priestly for pushing to have gender diversity on the board.

Ms. Gardiner said it can be a "self-fulfilling prophecy" for resource companies to argue they have few women directors because there are few senior women executives in the sector. Instead, she says boards should look for women with other needed skills, such as finance or legal backgrounds, to "fill the gap" until more mining women are available.

"An environment seen to be supportive of women at the top will be, on balance, more attractive to other women, including the talented young women entering the work force today," she argues.

Diversity advocates agree that adding women in top roles also sends a powerful signal to employees and customers that a company cares about equality and a modern work environment.

Bev Briscoe, chair of the board of heavy equipment dealer Ritchie Bros. Auctioneers Inc. and a member of the Goldcorp Inc. board, says many mining companies have had other priorities as they struggle to survive in a period of low commodity prices, but are now facing strong regulatory and social pressures to become more diverse.

"I think companies that don't have women on their boards, that's the biggest shame on them," she says. "It's going to be hard over the next three years for a board to maintain the fact they don't have a woman on their board. What kind of employer are you? How progressive a thinker are you?"

Ms. Briscoe says there are clearly fewer women working in the resources sector than in areas such as financial services, but this is not an excuse for inaction.

"I'm not sure there is a shortage of women. But it's not simple. I think you have to work a little harder in the resource sector - you have to go a little further."

She joined the Goldcorp board, for example, after spending her career in the transportation sector working with resource clients. She calls it a "dotted line" connection to the mining industry.

On Friday, Vancouver-based miner Teck Resources Ltd. announced the appointment of two women to its board, both with financial services backgrounds.

Canada's largest institutional investors have not played a major role in pressuring companies to hire more women for their boards and are typically not linking their investment decisions to diversity. But the powerful Canadian Coalition for Good Governance, which represents most of Canada's largest institutional investors, is asking companies with no women what they are planning to do about it, says executive director Stephen Erlichman.

He has little sympathy for giving resource companies more time than other sectors to become more diverse.

"They just need to go beyond their current comfort level of friends or whatever, and I believe they will find them," Mr. Erlichman said.

Calgary-based corporate director Kathy Sendall, a former executive at Petro-Canada, has seen how much progress can be made when companies make a concerted effort to search for women.

Ms. Sendall was the only woman on the board of Paris-based geoscience company CGG, which serves the energy industry, when she joined in 2010. But the company later added three more female directors after France adopted quotas requiring companies to have 40 per cent women on their boards by 2017.

"One of my board colleagues said, 'It's amazing how many qualified women are out there when you're forced to look for them,' " Ms. Sendall recalls.

She said the experience of quotas helped convince many skeptics in France that there was no need to compromise on quality when companies recruited women.

"When you get into these discussions with some of these guys, there's this presumption of a dilution of quality - they presume that if they have to bring women onto their boards then somehow the quality of the directors sitting around the board table is going to be diluted," she said.

"And in fact you get some of these wonderful candidates who bring so much to the table, and they were blissfully unaware of them before."

Director Sarah Raiss, a former executive at TransCanada Corp. who now sits on four major corporate boards including Vermilion Energy Inc. and Canadian Oil Sands Ltd., says effective strategies for boards include creating targets for women, or pledging to choose a woman for every second or third board vacancy.

Boards with no immediate vacancies have temporarily increased their size to add one woman, she says, then have shrunk back when the next man is scheduled to retire.

"A lot of people are starting to say, 'We can either be forced to do this, or we can take charge of it and do it the way we think is most effective for our company,' " she says. "Every single one of my Calgary boards - and they are all resource-based - are looking at diversity."

There are many signs of mounting progress in Canada's resources sector.

Data from director search firm Spencer Stuart show women accounted for 12 per cent of new board appointments at mining companies between 2009 and 2011, but that proportion climbed to 42 per cent from 2012 to 2014.

The energy sector has remained steady with women accounting for 23 per cent of all new directors appointed in both time periods, which is the slowest pace of new intake of a major industry sector.

Over all, women filled 43 per cent of new board appointments in 2014 among Canada's 100 largest companies, a jump from 28 per cent in 2013 and three times higher than the rate in 2009, Spencer Stuart said.

"In mining specifically, we've had more inquiries from that sector for diverse [board] candidates than ever before," says Spencer Stuart board recruiter Tanya van Biesen, who is responsible for overseeing searches for diversity candidates for boards.

The progress is especially rapid at Canada's 60 biggest companies, which have often been leaders in corporate governance practices. Only three companies in the S&P/TSX index had no women on their boards until recently, and two of them - Crescent Point Energy Corp. and Eldorado Gold Corp. - added a woman to their boards in the past two months.

First Quantum Minerals Ltd. is now the only company remaining in the S&P/TSX 60 index with no women on its nine-member board. Company spokesman Brian Cattell said First Quantum "recognizes the benefits and importance of diversity" on boards and has been "actively" seeking a female director through a global search.

"Our practice, for proven effectiveness reasons, is to have a relatively small board," Mr. Cattell said. "This means that with normal rotation we only look for a new director every few years."

First Quantum added a new independent director to its board in each of 2012 and in 2013, but both were men.


Associated Graphic


Job One for Joe Oliver: Deal with the debt
Corporate Canada has a message for the Finance Minister as he crafts his first budget: Focus on boosting the economy, employment - and shrinking the national debt
Monday, December 15, 2014 – Print Edition, Page B1

Canadian executives want Ottawa to use any surplus funds in the next budget to cut the national debt and help grow the economy, which they are worried is exhibiting increasing signs of weakness.

The latest C-Suite survey of corporate executives shows that business executives' top choices for increased federal government spending are infrastructure projects, and paying down the debt. Those are high budget priorities for about 60 per cent of the business leaders polled. Tax cuts - both personal and corporate - fall further down the list.

More broadly, the executives say Finance Minister Joe Oliver should focus his efforts on increasing productivity, generating higher GDP growth and boosting full-time employment, when he brings down his budget in a few months time.

Jeremy Freedman, chief executive officer at Toronto wealth management firm Gluskin Sheff + Associates Inc., said it is crucial that the government begins to pay down debt, now that it has some money to spare. "Given how much of the budget goes towards interest service ... we will be in big trouble when [interest] rates go up," he said.

"I worry that if rates go from where they are to more normalized levels, the amount of federal revenues that will have to go to servicing debt will leave them crippled in dealing with the things we need."

At the same time, Mr. Freedman noted, infrastructure spending should be a high priority because it is so crucial to the future of the economy. "As we look all around us we see crumbling infrastructure. The fact is our cities can't operate, people can't be efficient, and we can't actually compete globally [without] a competitive infrastructure." Thoughtful spending on these kinds of projects also creates jobs, he notes.

Government efforts to boost jobs and growth may be increasingly important in the coming months, if the executives' views on the economy are accurate.

After 18 months of relative optimism about the Canadian economy - where only about 10 per cent of respondents expected the economy to decline in the following year - there is a sharp note of pessimism arriving on the scene. In this survey, those expecting an economic decline in the next 12 months jumped to 23 per cent. One of the executives' top choices for surplus spending - although a distant third after debt payment and infrastructure - is a boost to tax incentives for research and development.

Guy Nelson, chief executive officer of Empire Industries Ltd., an engineering firm based in Winnipeg, said science and innovation are crucial to the economy, and governments must take a role in supporting them. To make sure industry stays innovative, "you really have to have a government that is investing in long-term science, along with the private sector if possible, but also in the research institutes and universities."

Even R&D projects that don't have specific industrial applications eventually generate "spinoff technologies and jobs and wealth," Mr. Nelson said. "The government knows that our record is lagging in that area, compared to other countries."

About one-third of executives felt that tax cuts - both corporate and personal - should also be a high budget priority. That's about the same proportion that supported one of the Conservative government's key promises - implementing income splitting for couples with children. Other social supports, such as spending on affordable housing or funding for day-care programs, were a top priority for just over one in 10 of those polled.

Deborah Stein, chief financial officer at energy company AltaGas Ltd. in Calgary, said it makes sense that corporate executives would focus more on overall debt levels and long-term investments in infrastructure, things that "drive the economy from a macro point of view."

If there is a strong economy and full employment, social supports are less crucial, Ms. Stein said. "If you have a strong balance sheet as a country, and strong infrastructure projects ... a lot of the other things will take care of themselves in terms of creating jobs and driving a population that does not need, as much, to rely on social programs."

Still, she noted, Ottawa should consider a wide range of spending for the surplus, and not just focus on one area. "It does not need to be mutually exclusive," she said.

"There are certain sectors of the population that do need programs beefed up, and do need help. As a society we have to watch out for each other and I would not begrudge the dollars that would be spent - in an efficient way - in helping those that need help."

Willy Kruh, global chair of consumer markets at KPMG, said he was gratified that executives appear to be concerned about "what's good for the economy and what's good for Canada, versus what is good for them as executives making a lot of money."

Their priorities are things that will increase productivity and employment, not personal tax cuts, he said. "It was very much about moving the country forward."

Mr. Freedman, of Gluskin Sheff, said any extra federal money should be distributed widely. "To the extent that we have surpluses, there should be a certain amount [alloted] to debt paydown, a certain amount to infrastructure, and there is a certain amount that should go to current social issues that need to be dealt with, so that peoples' lot in life is improved," he said. "There is an array of things that are all deserving. It should be prioritized, then spread out appropriately."

Associated Graphic

Corporate Canada is looking for jobs growth and debt repayment rather than tax cuts from Finance Minister Joe Oliver's budget, according to the latest C-Suite survey.



Cenovus cuts spending as oil falls below $60 mark
Plan to reduce budget by 15 per cent is sign Canada's oil heavyweights are feeling effects of price plunge
Friday, December 12, 2014 – Print Edition, Page B1

CALGARY -- Cenovus Energy Inc. is chopping spending by 15 per cent to around $2.6-billion in 2015, and warned it may cut deeper yet, in a clear sign that Canada's oilpatch heavyweights are feeling the strain of the dramatic drop in crude prices.

Chief executive Brian Ferguson said the company tries to avoid setting its budgets based on dayto-day gyrations in oil prices, but it was forced to rerun its numbers as it formulated plans against the backdrop of crude's relentless slide.

"Our budget process - it's a large program - starts in August and kind of builds up from the grassroots. We adjusted our budget assumptions around the end of October," Mr. Ferguson said in an interview. "Two weeks ago at the OPEC meeting, pricing in the mid-$70s seemed quite realistic. I don't know where the price is going to go in the next two weeks, or even few days."

West Texas Intermediate oil fell below $60 a barrel for the first time in five years on Thursday, dropping 99 cents to $59.95 (U.S.) a barrel, its lowest since July, 2009. It's down more than 40 per cent since the end of June.

Markets are panicked by projections of a weak demand and a glut of supply. Saudi Arabia, the most powerful member of the Organization of the Petroleum Exporting Countries, keeps signalling it is prepared to maintain its output as prices slide in order to protect its market share and force rivals, especially U.S. shale oil producers, to stop drilling.

Cenovus is one of the largest Canadian energy players to cut spending in the wake of oil's plunge.

The oil-sands producer has tested its plans at $65 a barrel, and at that level it still generates enough cash flow to cover $2.1billion in capital it has already committed to expansion projects at its two main Alberta developments, Foster Creek and Christina Lake, Mr. Ferguson said.

"So we've got a lot of financial flexibility in our program, but it's one of those things - what you don't want to do is budget in real-time."

Other oil sands and heavy oil companies including Baytex Energy Corp. and MEG Energy Corp. have clawed back spending. Canadian Natural Resources Ltd. has signalled that $2-billion of its $8.6-billion budget is "flexible" capital that could be deferred. Canadian Oil Sands Ltd. took the more drastic step of sharply reducing its dividend.

Shares in all energy companies have come under severe pressure as oil prices have weakened.

Leading up to last month's OPEC decision to maintain output levels, Canadian producers were somewhat shielded by a narrow discount on the price of their heavy oil versus light crude. And the weak Canadian dollar boosts revenue and profit as oil sales in U.S. dollars are translated back to Canadian. But now oil prices are so low that those cushions are doing little to protect plunging cash flows.

Cenovus, known for miserly operating costs, said it will maintain its dividend while projecting annual cash flow of roughly $2.75-billion. But that is assuming oil prices well above current levels - WTI oil at $77 (U.S.) a barrel and Western Canadian Select (WCS) heavy crude, a domestic benchmark, at around $60.50. WCS sold this week for $43 a barrel.

Mr. Ferguson touted financial flexibility his company has in its operations, which also include interests in two major U.S. refineries, as well as strong balance sheet.

Initially, it is slowing spending on longer-term projects still in the early development stages, including Narrows Lake, Telephone Lake and Grand Rapids. It plans to keep its work force number at today's levels.

"If there is a substantive downward excursion for any kind of extended period here on pricing, then we would certainly go back and reassess the program," Mr. Ferguson said.

"What we are focusing on for capital investment in 2015 will be contributors to production, and therefore cash flow, in 2016, 2017 - very high-return projects.

That's the brownfield expansion, largely of Foster Creek and Christina Lake, the big call on capital, as well as maintaining our existing conventional production."

Overall output is forecast at around 206,000 barrels a day, 4 per cent above the 2014 average.

Cenovus was spun off by Encana Corp. in 2009 in a move that had been delayed by the previous severe drop in oil prices.

Mr. Ferguson pointed out there is no global financial or monetary crisis pressuring crude this time.

"You've got a very strong U.S. economy right now and lower oil and gas prices are actually stimulative in terms of the U.S. economy or Asian economy. So one would anticipate there would be a demand response because of lower energy costs," he said.

Like oil's previous slide, however, Cenovus and other companies that keep investing will be the beneficiaries of lower labour and service costs as the industry slows down, he said.

Cenovus (CVE) Close: $20.80, down 30¢

Associated Graphic

Cenovus is committed to spending plans at Christina Lake, pictured, but the company is making cutbacks at other projects.


Shale slowdown Oil's plunge tempers U.S. boom
everal producers start to scale back spending plans for exploration and drilling
Wednesday, December 3, 2014 – Print Edition, Page B1

OTTAWA, CALGARY -- The U.S. oil juggernaut is beginning to stumble as producers start pulling back spending plans in reaction to the steep drop in crude prices.

Several companies have already indicated they will cut their exploration and drilling programs as they brace for leaner profits. U.S. production has expanded by about 1.1 million barrels a day in the past year, but won't match that pace in the next 12 months.

Oil prices have plunged 37 per cent since peaking last June, with the most dramatic drop coming after OPEC last week decided to maintain its 30 million b/d production quota. OPEC leader Saudi Arabia signalled it is prepared to wait out the slump to flush some of the highest-cost producers from the market, and at least some of those will be the smaller oil companies producing in the prolific tight oil, or shale, plays in the United States.

In trading Tuesday, the benchmark West Texas Intermediate fell $2.12 (U.S.) a barrel to $66.88. Some analysts believe markets have overshot on the downside, but few expect prices to roar higher any time soon.

Raymond James Financial Inc., for example, expects WTI prices to stabilize at around $75 a barrel.

"At those levels, companies are going to reduce their capital expenditures," Raymond James analyst Carlos Newall said Tuesday. "Production is not going to slow to a halt, but it is going to slow. You'll see a reduction in rig count and then there will be a six- to nine-month lag when you'll see a reduction in production."

The three key U.S. shale oil fields are the Bakken in North Dakota and the Eagle Ford and Permian in Texas. Scotiabank economist Patricia Mohr has calculated that the average breakeven price in the Bakken and Permian is $69 and $68, respectively, but with individual wells ranging from $54 to $82 a barrel.

But even if prices are above the break-even mark, companies will have to cut their drilling operations as their cash flow plummets from heady levels this year, and financing from banks and capital markets gets tighter.

Enerplus Corp., which pumped an average 22,400 b/d (including associated natural gas production) in the Bakken in the third quarter, expects to pare its 2015 budget by an unspecified amount from about $830-million (Canadian) this year. The Calgary-based company's break-even costs are $50 (U.S.) in the best areas of the North Dakota play, and a portion of its overall production for next year is hedged at $93 oil, chief executive officer Ian Dundas said in a recent interview.

"We're not planning on pushing our balance sheet," he said.

"Whatever our growth aspirations would have been in a $95 oil world, they are lower in a $70 oil world. There's just less money to go around."

To be sure, not all shale plays are created equal. Even within a zone, analysts say break-even economics can vary from one well to the next, depending on geology and other factors. Drilling in so-called "sweet spots" of the Bakken and the Eagle Ford, or the Cardium and Duvernay in Alberta, still makes sense even at much lower oil prices, said Callan McMahon, a senior analyst with energy consultancy Wood Mackenzie Group.

A sustained drop in oil prices threatens to weed out the weaker players, pressuring high-cost producers and setting the stage for production cuts and consolidation.

"The guys that had weak balance sheets at $100 oil are in trouble now and will probably not survive," said Scott Saxberg, chief executive officer of Crescent Point Energy Corp., which pumps crude from the portion of the Bakken that spills over the Canadian border. He was speaking about the industry as a whole, rather than just shale oil producers.

Continental Resources Inc., which is among the largest producers in the Bakken, has already cut expenditures by $600-million and trimmed its forecast for production growth, although it can take up to nine months for lower prices to result in lower volumes at the well head. The company produced an average of 121,604 barrels of oil equivalent per day in the Bakken in the third quarter, up 29 per cent from the third quarter of 2013.

Like other U.S. independent producers active in tight oil plays, Continental has seen its share price pummelled, dropping by half to $39.70 from its August peak. The company said Tuesday it is monitoring the market to determine whether it needs to cut back further.

"We have said that if oil prices declined and stayed at a lower level for an appreciable period, we may adjust capex further and this would likely impact our expected 2015 production growth rate," Continental vice-president Warren Henry said in an e-mail. "We can't really be more specific than that since, in that scenario, drilling and completion costs will likely also decline and that would affect our decision."

Associated Graphic

North Dakota's booming shale oil business will fall back to earth with the average break-even price at $69 a barrel.


Brookfield, Qatar boost Canary Wharf bid to $4.6-billion
Friday, December 5, 2014 – Print Edition, Page B1

ROME -- The property arm of Canada's Brookfield Asset Management and a Qatar investment fund have boosted their bid for the British company that controls Canary Wharf in a final effort to take control of Europe's largest office development.

At the same time, the Qatari Investment Authority (QIA) will pay $1.8-billion (U.S.) for preferred shares that will give it 9 per cent of Brookfield Property Partners, which is controlled by Toronto-listed Brookfield Asset Management Inc. The deal is designed to give Brookfield, with the Qataris at its side, enough financial firepower to fund the British takeover attempt and possibly others as the two powerhouses roam the planet for investments.

In a statement, the QIA said the Brookfield investment is also designed to deepen its relationship with the Canadian parent company. "This transaction takes our existing institutional relationship with Brookfield Asset Management to the next level, establishing a global platform for us to continue our collaboration with Brookfield," the QIA said.

Brookfield and QIA formed a 50-50 joint venture that has offered 350 pence a share - £2.6billion ($4.6-billion) - for Songbird Estates, the publicly-traded company that owns 69 per cent of Canary Wharf. QIA already owns 29 per cent of Songbird, which is not enough for control. Brookfield has no Songbird ownership, but holds 22 per cent of Canary wharf.

Songbird shares spiked up to £3.45 on the news of the bid, then fell to close at £3,30, suggesting investors have doubts the takeover effort will succeed. But the shares are highly illiquid and volatile, meaning the price is not always an accurate indication of true value.

The first Brookfield-QIA bid was pitched at £2.95 a share and quickly rejected by Songbird's board last month as wholly inadequate. Since then, the management teams of Songbird and Canary Wharf have been busy touting the expansion plans for Canary Wharf, which will add about 11 million square feet of commercial and residential property over the next decade or so to the existing 16 million square feet. The implication was that the first bid, pitched below net asset value, did not adequately value Canary Wharf's growth plans.

A Brookfield spokesman in London said that one Songbird investor, Third Avenue Management, with 3.5 per cent of the company, is supporting the bid. While the Third Avenue investment is small, it represents 16 per cent of Songbird's free float.

The Songbird bid is unlikely to succeed unless it gains the approval of Simon Glick of New York, who is the second-biggest investor, with 26 per cent. Mr. Glick, 66, is the secretive diamond investor who, with his father Louis, backed the Canary Wharf project from the very beginning and may be a reluctant seller. The Glicks were partners of the late Paul Reichmann, whose Toronto-based Olympia & York Developments launched Canary Wharf in the wastelands of East London in the late 1980s.

Canary Wharf went into receivership in 1992 and re-emerged as the preferred address for some of the world's biggest banks and investment firms, including HSBC and Lehman Bros. Mr. Reichmann bought back into Canary Wharf after its receivership, only to lose his stake after the project changed hands again, handing the bulk of Songbird to the Qataris, Mr. Glick, China Investment Corp. and Morgan Stanley.

The QIA investment in Brookfield makes the Canadian company a partner in one of the world's most aggressive and fastest-growing sovereign investors. The QIA, whose headquarters are in Doha, was formed in 2005 and has been funded by Qatar's vast natural gas wealth. It has investments in Harrods, Heathrow Airport, the London Stock Exchange and Volkswagen. Its London property investments, held through subsidiary Qatari Diar, include Chelsea Barracks, the former British army barracks in central London that is being developed into one of he world's most expensive residential property sites, and 50 per cent of the Shell Centre.

Separately, the state of Qatar is majority owner of the Shard, the 87-storey, pyramid-shaped glass tower in London that ranks as tallest building in the European Union.

The QIA has not escaped criticism as it builds up a global investment empire. GeoEconomica, a political risk consultancy in Geneva, in October put the QIA dead last on is list of 31 sovereign wealth funds for transparency and good governance standards.

The Brookfield spokesman said that the QIA will still go ahead with its Brookfield investment even if the Songbird bid fails. Under British takeover rules, the offer is to remain open for 21 days.

If it lapses, the QIA and Brookfield would not be able to renew the bid for one year.

Executives from Brookfield and Songbird would not comment. In a statement, Brookfield CEO Ric Clark said the QIA investment puts Brookfield "on the path to building the world's leading portfolio of best-in-class property assets."

Brookfield (BAM.A) Close: $55.99, down $1.09

Encana eyes further asset sales as cracks emerge in oil strategy
Tuesday, December 16, 2014 – Print Edition, Page B1

CALGARY -- When Encana Corp. bulked up on $9-billion (U.S.) of U.S. shale assets this year, a barrel of oil was fetching $94 or higher. Now oil prices have collapsed to below $56, and investors are wondering how the big energy company expects to fund drilling and expansion amid dwindling cash flow expectations.

Encana releases its 2015 budget on Tuesday with oil prices nosediving to five-year lows. Investors are questioning how much money the company can profitably sink into new properties in the Eagle Ford and Permian Basin regions of Texas, as well as its other resource plays in North America.

Chief executive Doug Suttles has completed a couple of multibillion-dollar deals to focus Encana on oil, while deemphasizing natural gas. To free up cash and advance his strategy, he has sold billions of dollars worth of noncore assets. Now, a large package of so-called midstream oil and gas pipeline and processing holdings in Alberta and B.C. may be the next major sale.

But Encana's big acquisitions of oil assets are increasingly looking like top-of-the-market deals. Mr. Suttles said last month the company would spend "substantially" more than the $2.5-billion to $2.6-billion it had budgeted for this year, though that was assuming oil prices above $80 a barrel. U.S. crude sold for $55.91 on Monday, likely setting the stage for a less enthusiastic spending plan.

At $13.53 (Canadian), down 4 per cent on Monday alone, Encana's shares are worth a little more than half what they were in June, after the company completed its spinoff of PrairieSky Royalty Ltd., the most valuable Canadian initial public offering in 14 years. At the time, some investors were hailing Encana's turnaround as complete. The contrast shows just how much the global oil glut and skidding prices have hampered Encana and its peers in the sector.

On Monday, Bank of Montreal analyst Randy Ollenberger chopped his rating on Encana shares to "market perfrom" from "outperform," and slashed his 12month target price to $16 from $28, citing the company's coming struggles to fund its planned expansion through cash flow and debt.

"In hindsight, Encana's switch into liquids resource plays was largely completed near the peak of the cycle at elevated valuations, which has left the company relatively highly levered and with few options to fund its aggressive liquids growth strategy in the current commodity pricing environment," Mr. Ollenberger wrote in a report.

That puts potential asset sales - a top funding option for Encana in years past - higher on the agenda.

The company is said to be discussing a deal with an energy infrastructure operator to sell its pipeline and processing assets, known as midstream holdings, in the Montney region, which straddles the Alberta-British Columbia border. The Montney is one of several areas that Mr. Suttles has said is core to Encana's future, and the idea would be to plan future expansion with the buyer.

Potential buyers include Veresen Inc., the expanding energy infrastructure company. Encana and Veresen have done business before. In 2012, Veresen bought Encana's Hythe/Steeprock gas gathering and processing complex in Alberta and B.C. for $920million. A Montney transaction could be worth much more, according to one source.

Meanwhile, KKR & Co., the U.S.based private-equity firm led by Henry Kravis and George Roberts, has been mentioned as being involved. Earlier this year, KKR set up a $2-billion fund to invest in unconventional North American energy. It also opened an office in Calgary, run by Brandon Freiman.

A transaction may involve a long-term agreement to process and transport Encana's production, as well as invest in expansions of the infrastructure. A private-equity participant could provide the necessary capital to expand the network.

Encana declined to comment on the sale. Veresen and KKR did not respond to requests for comment.

Oil patch officials and advisers who declined to speak on the record said companies are reviewing assets to raise capital at a time swooning oil prices have shut off conventional debt and equity financing sources. "Assets are the new capital. You are going to see a number of divisions spun off by companies in need of cash," said one industry veteran who is a director with a number of Canadian energy companies.

Some potential purchases are being driven by U.S. private equity funds who are drawn to more stable assets such as infrastructure.

Private equity funds had traditionally avoided energy investments because of commodity price volatility. In recent years, however, a number of major funds such as KKR and Blackstone Group have launched funds dedicated solely to energy.

Associated Graphic

Encana's shares have fallen significantly since its spinoff of PrairieSky Royalty in June.


Market jitters go global on 'beast of a day'
Renewed concerns over economic health of euro zone, slowing growth in China hit hard on volatile day of trading
Wednesday, December 10, 2014 – Print Edition, Page B1

The market turbulence that has pummelled Canadian stocks over the past two weeks is moving abroad, and strategists warn that wild days will define markets for some time.

Greece's main stock market index sank 13 per cent on Tuesday while borrowing costs surged, a stark reminder that Europe's sovereign debt crisis has not disappeared.

Even blue-chip European stocks fell 2.6 per cent for one of their worst one-day declines of the year.

In China, the Shanghai composite index fell 5.4 per cent, shattering a rally that had lifted stocks by about 50 per cent in recent months.

In the U.S., the S&P 500 fell as much as 26 points in early trading, but rebounded later in the day and closed down less than half a point, at 2,059.82.

Michael Hartnett, chief investment strategist at Bank of America, called it a "beast of a day" - but the turbulence helped him, and other strategists, hammer home the idea that 2015 will challenge the convictions of investors as the era of smooth rides and big returns winds down.

Central to this forecast is the expectation that the Federal Reserve will start to raise its key interest rate next year from ultra-low levels, removing a source of economic stimulus that has provided a powerful boost to stocks for more than five years.

"Why? The economy is picking up," Mr. Hartnett said in a conference call to discuss Bank of America's outlook. "It's that simple."

But markets can be jolted by surprises, underlining just how difficult it is to predict where markets are headed.

On Tuesday, Greek stocks were hit by news that the government is close to collapse and that an anti-austerity party could take power next year, reigniting concerns about the financial stability of the euro zone.

Chinese stocks fell the most in five years amid a flurry of concerns about an overextended stock market, a slowing economy and a troubled property market.

This time, Canada emerged without a bruising. The S&P/ TSX composite index closed at 14,195.73, up 51.56 points or 0.4 per cent, helped by stable oil prices and rising gold.

If there is a theme among market strategists as they roll our their 2015 forecasts, it's that investors should be prepared for more volatility ahead.

"It's time to realize that the world might not be driven by quite as much momentum," said Peter Fisher, a senior director at BlackRock, the global asset manager.

He pointed out that it is unclear whether central banks in Europe and Japan will be able to offset shifting U.S. monetary policy with their own stimulus plans.

His colleague Russ Koesterich, BlackRock's global chief investment strategist, added that asset prices have moved well ahead of economic growth, which could lead to disappointment.

"Markets have been leading the economic recovery," he said.

"But they have been very aggressive in discounting that recovery."

Stock valuations have surged, bond yields have fallen, credit spreads have tightened significantly and volatility has declined.

"As we go into 2015, the odds are that even if markets continue to go up, the path is unlikely to be as smooth as it has been in the last couple of years."

Still, no one is suggesting that investors should retreat from stocks, but rather check their tolerance for choppier markets - and perhaps prepare for them.

Savita Subramanian, Bank of America's head of U.S. equity and quantitative strategy, expects the S&P 500 will rise to 2,200 by the end of next year, implying a gain of about 7 per cent from Tuesday's close.

"We are still optimistic on U.S. equities, but a little less optimistic than we have been over the last couple of years," she said.

She believes that stocks are no longer cheap after the S&P 500's 200-per-cent rise since 2009, but that stocks should continue to rise with earnings. As well, she points out that Wall Street strategists are growing more enthusiastic about stocks, suggesting that the bull market is aging.

In particular, she likes socalled quality stocks with stable earnings growth, especially large-cap stocks in sectors such as industrials and technology.

"When volatility is rising and risk aversion is building," she said, "you really want to look for companies that can deliver, rather than the high-fliers and riskier stocks."

Copyright © 2003 Bell Globemedia Interactive Inc. All Rights Reserved.