Globeandmail.com

Canadian athletes prepare for rare chance to shine at home
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By LORI EWING
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The Canadian Press
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Saturday, July 4, 2015 – Print Edition, Page S3


TORONTO -- Curt Harnett was having a horrible season in 1994. The three-time Olympic medalist in track cycling was struggling with his form and tinkering with his pedalling mechanics.

The Commonwealth Games in Victoria that summer salvaged his season.

It was the one chance in his illustrious career to compete in front of a Canadian crowd, and it was where he made some of his fondest sports memories - the type Canada's top athletes will be compiling at the Pan American Games.

"Victoria was one of the most amazing experiences of my life," said Harnett, Canada's chef de mission for the 2015 Pan Am Games. "When the majority of the stands are actually cheering you on versus some other competitor, that energy is really quite fantastic."

"It was an amazing adventure, and for me it was a once-in-a-lifetime opportunity, and it's what it's going to be like for these athletes," added Harnett, who won silver in Victoria and went on to earn bronze at the '96 Olympics.

"This could very well be the only chance they get to race in front of a home crowd."

That rare opportunity has gone into the making of Canada's largest - and arguably strongest - Pan Am Games team ever assembled. Some of Canada's most recognizable athletes such as paddler Adam van Koeverden, a four-time Olympic medalist who's never raced in a Pan Am Games, couldn't pass up the opportunity to shine on home turf.

He's one of more than 720 athletes - almost three times the size of the 2012 London Olympic team - who will represent Canada in 36 sports in the Games, which open next Friday.

The United States, which has dominated the Pan Ams, finishing first in total medals in all but one appearance, plans to field a team of about 625 athletes.

Canada's goal is to finish in the top two in total medals. That could take, Harnett figures, between 190 and 200 medals.

Canada has finished second once before, in 1967 in Winnipeg.

The team has finished third 10 times in its 15 Pan Am appearances.

Four years ago in Guadalajara, Mexico, Canada was fifth with 119 medals, but because of the timing of the event - it fell in October, which is very late in an athlete's season - the team was a mixed bag of A-listers and developmental athletes.

A year before the curtain goes up on the Rio Games, Canada's team for Toronto is a who's-who of Canada's Olympic medal hopes.

The list is long: Rosie MacLennan, Canada's lone gold medalist in London, in trampoline; Mark Oldershaw, Olympic bronze medalist in canoeing and Canada's flag-bearer for the opening ceremonies; mountain biker Catharine Pendrel; diving's Fab IV of Roseline Filion, Jennifer Abel, Meaghan Benfeito and Pamela Ware, who've combined for a whopping 70 Olympic and international medals; Ryan Cochrane and Richard Weinberger, both Olympic medalists in swimming; and Patricia Bezzoubenko, who won six gold medals in rhythmic gymnastics at last summer's Commonwealth Games.

The lion's share of the medals should come from a star-studded track and field team that includes 20-year-old Andre De Grasse, who became the first Canadian in 16 years to go sub-10 seconds in the 100 metres; Shawnacy Barber, who regularly breaks his own Canadian pole vault record and is ranked fourth in the world; Damian Warner, world bronze medalist in the decathlon; world heptathlon silver medalist Brianne Theisen-Eaton; and Olympic high jump bronze medalist Derek Drouin.

For 10 sports - 16 events - the Pan Ams are direct qualifiers for the Rio Olympics. In men's and women's field hockey, and men's water polo, for example, the gold medalist earns an automatic Olympic berth.

In all, over 6,100 athletes from 41 countries of the Americas will compete at the Pan Ams, double the number of athletes that competed at the Vancouver Olympics.

The United States leads the overall medal total over 16 Pan Ams, with 4,172 medals. Cuba is a distant second with 1,932, while Canada is third with 1,696.

Water polo kicks off the competition Tuesday, three days before the opening ceremonies at Rogers Centre.

Flames get deal done with Hamilton
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By ERIC DUHATSCHEK
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Wednesday, July 1, 2015 – Print Edition, Page S4


eduhatschek@globeandmail.com

After the euphoria of making the big draft-day deal, the day of financial reckoning arrived for the Calgary Flames and Dougie Hamilton - and it turned out not to be too painful.

The Flames signed their newest acquisition to a six-year, $34.5million (U.S.) contract extension, with an annual salary-cap hit of $5.75-million. That makes Hamilton the highest-paid defenceman on the team: Dennis Wideman is next at $5.25-million; T.J. Brodie signed an extension that averages $4.65-million; and team captain and Norris Trophy candidate Mark Giordano will get a big raise when his $4.02-million-a-year deal ends next season.

In short, the Flames have a lot of money invested in their defencemen, understandable perhaps since that's the primary focus of their team's reconstruction.

Hamilton's contract extension will have an impact on new deals they'll have to negotiate a year from now when two young frontline forwards, Sean Monahan and Johnny Gaudreau, will both be completing their entry-level contracts and looking for long-term extensions as well.

The good news is the Flames had salary-cap room to spare, which was why they were kicking the tires on Los Angeles Kings centre Mike Richards at the NHL entry draft. Their interest in Richards, who has had his contract terminated by the Kings, disappeared on draft day, when they landed Hamilton's playing rights from the Boston Bruins in exchange for one first- and twosecond round draft choices.

Boston remained active in the trade market Tuesday, ahead of Wednesday's opening-day of the NHL free-agent season, trading goaltender Martin Jones to the San Jose Sharks for a first-round pick and an unsigned draft choice. Jones will get a chance to start with the Sharks, who were without a No. 1 goalie after trading away the rights to Antti Niemi earlier.

The Winnipeg Jets also got in on the action, signing Drew Stafford to a two-year contract extension worth $8.7-million, which kept him from testing free agency. And after talks broke down last weekend with the Sharks, the Vancouver Canucks traded defenceman Kevin Bieksa to Anaheim for a second-round pick. Adding Bieksa gives the Ducks a veteran insurance policy, in case they are unable to sign potential unrestricted free agent Francois Beauchemin to a contract extension.

But the biggest deal of the day involved the Columbus Blues Jackets, who acquired 22-year-old restricted free agent Brandon Saad from the Chicago Blackhawks in a seven-player exchange. Fearing that another team would extend an offer sheet to Saad that was too rich to fit into their salary cap, the 'Hawks shipped him to the Jackets along with defenceman Michael Paliotta and centre Alex Broadhurst.

The Blackhawks get forwards Artem Anisimov, Marko Dano, Jeremy Morin, Corey Tropp - plus a fourth-round draft pick in 2016.

According to Flames general manager Brad Treliving, Hamilton's extension came in right around the dollar figure he expected to pay on a long-term deal.

"We think we've got a salary structure that fits, knowing what the future holds for us," said Treliving, who added: "Looking after and taking care of our [core] group is the priority."

Hamilton received some anonymous-source criticism after leaving Boston - which has happened before when a young Bruins star departs. But on a conference call with reporters, he didn't get into what role he might have played in his own departure.

For his part, Treliving said the Flames had done due diligence on Hamilton, on and off the ice, and had no issues at all with their newest acquisition.

"There's a lot of things that keep me up at night," said Treliving, "but the type of person and the type of teammate Dougie is is not one of them."

Treliving, who said he was speaking out in defence of Hamilton because of all the questions he'd been asked about him in the past two days, went on to describe Hamilton as an "excellent teammate, a bright young man," and predicted he would be a "good fit" on their team.

Follow me on Twitter: @eduhatschek

Argos win double-OT upset over the Roughriders
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By JONATHAN HAMELIN
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The Canadian Press
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Monday, July 6, 2015 – Print Edition, Page S3


REGINA -- The legend of Trevor Harris continues to grow.

The Argonauts QB led his team on a last-minute touchdown drive to send the game into overtime and then threw two touchdown passes in extra time to lead Toronto to a 42-40 double-overtime victory over the host Saskatchewan Roughriders on Sunday.

Harris, in his third game as starter for the injured Ricky Ray, led Toronto (2-0) to a 26-11 upset over the Edmonton Eskimos in Week 1.

"I just want to be the best possible backup I can be," said Harris, who went 30 for 38 with 267 yards and four touchdowns and one interception in the game. "Ricky Ray is one of the best quarterbacks ever in the CFL. My job is to steer the ship in the right direction when he's not available."

Playing in front of 31,907 fans at Mosaic Stadium, Saskatchewan led the game 28-21 with just over a minute left in the game. Scrimmaging from the Toronto 25, Harris led the Argonauts on a last-minute touchdown drive, capped off with a 16-yard touchdown pass to Chad Owens, to send the game into overtime.

In a crazy overtime session filled with penalties and a few reviewed plays, Saskatchewan opened up the scoring on its first possession when Rob Bagg took the ball one yard into the end zone on an end around.

Running back Jerome Messam was tackled in the backfield on the ensuing two-point conversion. The Argos stormed back with a nine-yard receiving touchdown by running back Brandon Whitaker in their first overtime period. They, too, failed their two-point conversion attempt when Harris was sacked by Rider defensive back Macho Harris.

In the second overtime, Harris threw an 11-yard touchdown pass to Tori Gurley and then hooked up with running back Anthony Coombs on a threeyard strike for the two-point conversion to put Toronto up 42-34.

Saskatchewan (0-2) had a chance to tie the game after QB Kevin Glenn connected with Chris Getzlaf for a 25-yard touchdown on the next drive, but Glenn just missed Getzlaf on the ensuing two-point convert.

"I was on the sideline and coach said these are the moments you live for," Harris said.

"I remember thinking, 'I've done this in my backyard a few times. Now you've just got to go do it with 30,000 thousand people in the stands.' We took a punch in the mouth from a great football team and we were able to come back and keep fighting."

Owens, who led Toronto receivers with eight catches for 88 yards and one touchdown, said the team has always believed in Harris' ability to lead.

"He's a guy who doesn't go out there to prove guys wrong; he just goes out there and does his job," Owens said.

"This just shows that this a guy who can go into a hostile environment, go into a situation where there's still question marks surrounding him, and get the job done."

The Riders put up over 500 yards of offence in the loss.

Glenn went 33 for 40 for 477 yards with two touchdowns and one interception for the Riders, while the Riders' Ryan Smith led all receivers with eight catches for 174 yards and one touchdown. It was a similar story in Week 1, where the Riders put up nearly 500 yards in offence in a 30-26 home loss to the Winnipeg Blue Bombers.

"It's bittersweet since we didn't get the victory, but I'm still proud of the guys on the offence side of the ball because we went out and showed a lot of resiliency," Glenn said. "We don't want to be 0-2, but that's what professional sports is all about. We'll learn from our mistake in this game and move on."

Veteran kicker Paul McCallum, who returned to Saskatchewan last week after being released by the B.C. Lions on June 3, hit all four of his field goal attempts in the game, including a 49-yarder.

RedBlacks' hopes about to collide with Lions' talent
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By DAN RALPH
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The Canadian Press
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Thursday, July 2, 2015 – Print Edition, Page S3


Just two weeks into the CFL season, Henry Burris and the Ottawa RedBlacks are already closing on a franchise record.

On Friday night, the RedBlacks (1-0) play host to the B.C. Lions in their home opener looking for a second straight victory. What makes that noteworthy is Ottawa won just two games all of last year in its inaugural season.

Ottawa opened its 2015 season with a 20-16 win over the Montreal Alouettes, the team's first-ever road victory. It was a rather ordinary opener for Burris, who completed 23-of-36 passes for 263 yards and a TD but also three interceptions.

The RedBlacks secured the win on Jeremiah Johnson's six-yard TD run in the fourth quarter. It was set up by Jovon Johnson's interception of Montreal rookie quarterback Brandon Bridge, a native of Mississauga, who was playing after both starter Jonathan Crompton and backup Dan LeFevour suffered shoulder injuries.

Crompton is listed day-to-day with a shoulder bruise but LeFevour will miss the remainder of the season.

Ottawa's defence allowed just 113 passing yards and 84 yards rushing versus Montreal while also recording two interceptions.

Last year, Ottawa ended Lions' quarterback Travis Lulay's season. Lulay made his 2014 debut against the RedBlacks following off-season shoulder surgery but quickly re-injured the joint and missed the remainder of the campaign.

Lulay and Co. will play their season opener in Ottawa to mark Lions' head coach Jeff Tedford's CFL debut. The former long-time coach at University of California, Berkeley replaces Mike Benevides, who was fired following B.C.'s one-sided 50-17 East Division semi-final loss to Montreal.

The Lions have talent on their roster, including linebackers Solomon Elimimian and Adam Bighill. Elimimian was the league's top player and defensive performer last year after recording a CFLrecord 143 tackles while Bighill remains one of the league's top defenders.

Offensively, Winnipeg native Andrew Harris provides much versatility at tailback while receiver Emmanuel Arceneaux remains a big-play threat.

American rookie Richie Leone handles kicking-punting duties after veteran Canadian Paul McCallum was granted his release upon deciding against the team's request he retire.

Pick: B.C.

Blue Bombers vs. Tiger-Cats

At Winnipeg. The Bombers (1-0) are home following a 30-26 season-opening road win over Saskatchewan. Quarterback Drew Willy had 325 passing yards and three TDs while Paris Cotton ran for 108 yards. The defence, however, allowed over 200 yards rushing. Hamilton opened with a heartbreaking 24-23 road loss to the Calgary Stampeders in a Grey Cup rematch. Zach Collaros threw for 281 yards while the Ticats (0-1) intercepted Grey Cup MVP Bo Levi Mitchell three times. Brandon Banks had a 67-yard punt return TD.

Pick: Hamilton

Alouettes vs. Stampeders

At Montreal. Against Hamilton, Calgary (1-0) needed Rene Paredes' 50-yard field goal on the final play of the game to edge the Ticats and was also buoyed by Keon Raymond's 97-yard interception return TD. Despite throwing three interceptions, Mitchell found Jeff Fuller nine times for 148 yards, earning Fuller playerof-the-week honours. Cornish, the CFL's top rusher last year, had 70 yards on 13 carries. With Crompton ailing Bridge could make his first CFL start for Montreal (0-1) but doing so against the defending CFL champion makes it an even more daunting task.

Pick: Calgary

Roughriders vs. Argonauts

At Regina. Veteran Kevin Glenn starts for the Riders (0-1) with incumbent Darian Durant (Achilles injury) out. Linebacker Shea Emry (neck) also likely won't play but receiver Weston Dressler and safety Tyron Brackenridge are both expected back. Last week, Toronto's Trevor Harris threw for 347 yards and three TDs versus an Edmonton defence that allowed 300 passing yards just once last year. But the Argos (1-0) will be minus kicker/punter Swayze Waters (hip flexor), the CFL's top special-teams player last year.

Pick: Saskatchewan Last week: 1-3.

Sports groups form One Team for Toronto's Pride Parade
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CFL commissioner, assistant Leafs GM to march in parade along with more than 15 athletic organizations
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By RACHEL BRADY
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Friday, June 26, 2015 – Print Edition, Page S2


TORONTO -- A large group of Canadian Olympians and sports executives will be part of the honoured group marching in Sunday's Pride Toronto Parade, including new CFL commissioner Jeffrey Orridge and Toronto Maple Leafs assistant general manager Kyle Dubas.

The Canadian Olympic Committee will march with more than 15 sports organizations under the name One Team as part of the signature event that caps off Toronto's Pride Week. The group will also include players from the Canadian Football League, Toronto FC and the Canadian Women's Hockey League (CWHL), as well as the Olympic committee's CEO, Chris Overholt, and several athletes.

Pride Toronto is themed "Come out and play" this year - a rally for inclusiveness for the LGBT community in the Pan Am Games coming to the Toronto area in July. This year's honoured group, PrideHouseTO, invited 13 groups to march with it, including the large sports contingent.

"When the Canadian Olympic Committee first participated in the 2013 parade, that's when this momentum began, and I believe that this will be the biggest year for sports groups marching and participating in the week," said Pride Toronto co-chair Aaron GlynWilliams. "It will provide great momentum for the Pan Am Games. Many of the 41 countries competing criminalize homosexuality, so we know they may have LGBT athletes visiting who have never come out or been in a welcoming environment in their own countries. We want to show them how inclusive Toronto is."

The sports contingent will also include representatives from You Can Play, a social activism group dedicated to erasing homophobia in sports and founded by Patrick Burke, son of NHL executive Brian Burke. After You Can Play launched in 2011, Toronto's Pride Parade was the first to include it in 2012.

"I'm very proud to be marching in this year's Pride parade," Orridge said. He and CWHL commissioner Brenda Andress are being touted as the first pro league commissioners to march in Toronto's Pride parade.

"Together, with our partners at You Can Play, we will continue to advance the values of fair play, equal opportunity and inclusion, to help ensure our locker rooms and stadiums are welcoming environments for every CFL player and fan."

You Can Play has partnered with the Olympic committee and various professional leagues, including the CFL, on training programs for their athletes and speaking events at schools to promote equality and respect for all in sport, regardless of sexual orientation.

"I see progress when I'm talking to young people, and they say that their teammates who identify as heterosexuals will correct derogatory terms when they're being spoken in a sports setting, and I don't think that was happening as much five years ago," said Wade Davis, You Can Play executive director and a former National Football League player who has since come out.

"It's easy for a league to say they're doing things, but being an ally is not a noun, it's an action. It's bigger than talking about it; you have to also live it."

With the parade and Pan Am Games in sight, the Olympic committee launched an ad campaign this week titled #OneTeam. It kicked off with a public service announcement that includes three Canadian Olympians sharing their stories of growing up gay.

"We have 15 organizations marching in solidarity under the #OneTeam banner, which is a true reflection of Canada's support for the LGBTQ community and their willingness to be the change that needs to happen," Overholt said. "This is a proud moment for the #OneTeam family and major step forward for the LGBTQ and sport communities."

The Pride Parade will include more than 150 Toronto groups and communities.

St. Louis calls it a career after 16 seasons
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By STEPHEN WHYNO
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The Canadian Press
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Friday, July 3, 2015 – Print Edition, Page S3


Martin St. Louis announced his retirement Wednesday after 16 NHL seasons, a Stanley Cup, Olympic gold medal and a handful of individual trophies to show for his career.

The Laval, Que., native was a seven-time all-star who won the Hart Memorial Trophy as MVP once and Art Ross Trophy as leading scorer twice. St. Louis also won the Lester B. Pearson (now Ted Lindsay) Award as the most outstanding player, as voted by league players, and three times earned the Lady Byng for gentlemanly conduct.

St. Louis went from being undersized and undrafted to one of the most prolific scorers in the past two decades. He recorded 1,033 points on 391 goals and 642 assists in 1,134 games with the Calgary Flames, Tampa Bay Lightning and New York Rangers.

"He's accomplished everything he could accomplish in the NHL," close friend and former Tampa Bay teammate Mike Smith said in a phone interview.

"He was an undrafted player who was a little guy that had everything kind of going against him, and he just continued to prove everyone wrong."

St. Louis helped the Lightning win the Stanley Cup in 2004 and was part of Canada's World Cupwinning team months later.

That was the year he won the Hart, Pearson and Art Ross with a league-best 56 assists and 94 points.

"I have been blessed to play for 16 years in the NHL," St. Louis said in the statement announcing his retirement. "It has been an amazing ride."

St. Louis was part of Canada's undefeated gold-medal-winning 2014 Sochi Olympic team and finished his career with the Rangers. The 40-year-old was an unrestricted free agent and explained his decision as wanting to spend more time with wife Heather and sons Ryan, Lucas and Mason.

"I have dedicated my life to being the best player I could be and now want to turn more of my focus to my three boys," St.

Louis said. "I look forward to this next chapter of my life and the time I will have with my family."

The 5-foot-8 St. Louis was undrafted out of the University of Vermont before the Flames signed him in 1998. He didn't get his big break until signing as a free agent in 2000 with Tampa Bay, where he developed into a premier offensive player.

Alongside Brad Richards and Vincent Lecavalier, St. Louis delivered the Lightning their first Cup. He was named captain in 2013 after Lecavalier was bought out, a position he held until he was granted his trade request to the Rangers last year.

St. Louis had 15 points during New York's 2014 run to the Cup final. He put up 52 in 74 regularseason games last season.

"He always seemed to get better as his career went on," former Lightning teammate Jeff Halpern said. "I'm shocked that he retired only because, abilitywise, I always felt like he was one of those guys that could play until he was 45."

In retiring now, St. Louis starts the clock ticking toward consideration for the Hockey Hall of Fame. His inclusion will be debated, but his numbers and accomplishments give him a strong case.

Associated Graphic

Martin St. Louis, who won a Stanley Cup and numerous individual awards with the Tampa Bay Lightning, was never drafted.

CHRIS O'MEARA/AP

Toronto takes 12 innings to finally score
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Estrada pitches perfectly until Tampa Bay's Forsythe hits infield single in eighth inning
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By DICK SCANLON
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The Associated Press
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Thursday, June 25, 2015 – Print Edition, Page S3


ST. PETERSBURG, FLA. -- It took the Tampa Bay Rays eight innings to put a runner on base Wednesday and another four to lose 1-0 to the Toronto Blue Jays.

Logan Forsythe broke up Marco Estrada's bid for a perfect game with a one-out infield single in the eighth, but Chris Colabello homered for the Blue Jays off Brandon Gomes in the 12th.

"It wasn't a pretty hit, but it was a hit," Forsythe said. "Hats off to him."

Estrada also carried a no-hit bid into the eighth inning of his previous start Friday against Baltimore. This time, he struck out 10 and threw a career-high 129 pitches.

He had retired 22 straight when Forsythe barely beat out a slow chopper to third that Josh Donaldson barehanded. His throw to first was a hair too late.

"It was a little frustrating just because it wasn't hit very hard," Estrada said. "Donaldson made a great play. The guy can run a little bit, so he beat it out."

Toronto challenged the safe call by umpire Joe West, which was confirmed after a 40-second replay review.

"I knew I was safe, but you've got to challenge it in a situation like that, just to make sure," Forsythe said.

Tampa Bay's only other hit off Estrada was Kevin Kiermaier's two-out double in the ninth that chased the right-hander.

"The ninth inning, I gave up a hard-hit ball to Kiermaier. That made it a little better," Estrada said. "Easier to forget about."

Nathan Karns took a no-hit bid into the sixth for the Rays, but exited one inning later after giving up consecutive singles to Edwin Encarnacion and Dioner Navarro. Kevin Jepsen pitched out of the jam by getting three straight outs.

Encarnacion was the lone base runner through five innings, drawing a leadoff walk in the second.

"It was a pitchers' duel for a while and then the bullpen came in and stretched it," said Karns, who gave up three hits and three walks with five strikeouts over six-plus innings. "It's a 1-0 ball game, a tough loss. I think we did really well, we just couldn't push anything across the plate today."

Colabello connected for a one out shot to centre off Gomes (1-3).

Brett Cecil (2-4) escaped a bases-loaded jam in the 11th and Steve Delabar got three outs for his first save of the season.

"Credit to Estrada. He had our number today," said Kiermaier, who had two of the Rays' four hits. "We gave ourself a chance a couple times, but we didn't capitalize.

"Anytime you lose 1-0, those are tough. You need to score to win and we didn't do that today."

Donaldson dove a couple of rows into the stands to catch David DeJesus's foul pop leading off the eighth.

Kevin Pillar got the game's first hit, a one-out single to left in the sixth. Karns later got an inning-ending pop fly from Jose Bautista with the bases loaded.

"I'm just glad we pulled this game off," Estrada said.

Associated Graphic

Jays pitcher Marco Estrada delivers in the third inning against the Rays at Tropicana Field in St. Petersburg, Fla., Wednesday.

KIM KLEMENT/USA TODAY SPORTS

Winston moving on after checkered past
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By TOM WITHERS
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The Associated Press
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Saturday, June 27, 2015 – Print Edition, Page S2


BEREA, OHIO -- Jameis Winston knows there are always eyes on him - watching, dissecting and waiting for him to make a mistake.

The spotlight doesn't leave, and Winston wants to shine in it.

"It's about my actions," the Tampa Buccaneers rookie said while attending a youth football clinic. "I got to be a quarterback. When I'm off the field, I got to be a quarterback. When I'm on the field, I've got to be a quarterback. I know people are going to look at me in each and every way.

"I just smile, man."

He did a lot of that on Friday.

Winston is trying to move on from a celebrated and checkered college career at Florida State, where he won a Heisman Trophy and led the Seminoles to a national championship but also brought himself and the school shame for multiple off-field incidents, including a rape accusation that was dismissed after prosecutors cited problems with a police investigation.

As he embarks on his NFL career, the 21-year-old is staying positive. And while he's not hiding from his past, Winston is focused on what's ahead, not behind him.

"I have nothing to prove," he said. "I believe that people make mistakes but I also believe that you bounce back from those and I'm just moving forward."

Winston and the NFC's other drafted rookies got a break from their four-day symposium - a league-run orientation program designed to help players transition to the pros - by playing with school-aged children on Cleveland Browns training fields.

While the youngsters ran pass routes, bumped into blocking pads and tossed footballs into garbage cans, Winston seemed to be the biggest kid on the field.

He led the boys and girls in cheers, handed out high-fives and advice and taught the kids how to put some touch on a pass or fire a rocket.

"Set your feet and let it rip," he told one boy. "Don't be afraid."

Winston was clearly in his element inside the field's whitechalked borders. It was when he has ventured off the field, out of bounds, that Winston has gotten into trouble.

There was the shoplifting charge for stealing crab legs from a grocery store; the suspension for jumping on a table on Florida State's campus and screaming an explicit phrase, and the sexual-assault allegation in 2012. Those actions overshadowed Winston's achievements on the field, earned him a troublemaker's image and made him a target of criticism on social media.

Several of Winston's fellow rookies said he has been one of the most engaged players this week. And despite his higher profile, he has been just one of the guys. "He is the most highspirited guy I've been around," said Buccaneers offensive tackle Donovan Smith, a second-round pick from Penn State. "He's a great leader. And he likes to have fun. You're looking at us - we're 21, 22 years old. You have to think about it. We're adults, but we're still kids sometimes and we want to have fun."

Associated Graphic

Tampa Bay quarterback Jameis Winston admits he made mistakes during college but is focused on what's ahead of him. JOE ROBBINS/GETTY IMAGES

Buffalo excited by 'Christmas morning' draft
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By STEPHEN WHYNO
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The Canadian Press
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Tuesday, June 30, 2015 – Print Edition, Page S2


New Buffalo Sabres coach Dan Bylsma had a little argument with general manager Tim Murray about the team's impressive moves at the NHL draft.

"I said, 'Tim I think we got more than a little bit better,' " Bylsma recalled. "And he said, 'No, we got a little bit better,' and that's certainly true."

Let the tempering of expectations begin.

After drafting Jack Eichel and trading for goaltender Robin Lehner and forwards Ryan O'Reilly and Jamie McGinn, the Sabres are a much different, stronger team than they were last season or even last week.

The moves Murray made in South Florida should fast-track their progression from the bottom of the NHL.

Ottawa Senators GM Bryan Murray said his nephew's team sure looks like a playoff team to him. Tim Murray doesn't want that talk quite yet.

"We've changed our team a lot," Tim Murray said Saturday in Sunrise, Fla. "We've improved a lot, but I'm just going to try to get better, a little bit better every day. We think we've done that.

"Our players are excited, but I'm not going to put pressure on our players or coaches and say that we're a playoff team now."

The Sabres don't have to be a playoff team now, but with centre Sam Reinhart and winger Evander Kane added to the mix of talent picked up over the weekend, they're starting to put the pieces in place.

Acquiring Lehner was a must, and the former Senators goalie being 23 years old gives him a chance to blossom into a good or great NHL starter. But trading for O'Reilly from the Colorado Avalanche as part of a blockbuster deal Friday night provides Buffalo with another top centre to go with all-star Zemgus Girgensons, Eichel and Reinhart.

"Down the middle, they're real strong right now; they're one of the good teams down the middle, I would say," Bryan Murray said Saturday. "That's a pretty strong middle for them, and that's the start of the building of an awful good hockey club."

Bylsma has O'Reilly pencilled in as the Sabres' No. 1 centre and acknowledged that one of Eichel, Reinhart or most likely Girgensons could move to wing.

Buffalo even has its No. 4 centre in veteran David Legwand, who was part of the Lehner trade.

Tim Murray could see the excitement in Bylsma at the moves he made at the draft, saying it's "Christmas morning" for a coach when he gets a proven, strong NHL player. Murray doesn't want to label the Sabres anything but improving and said he won't make any grand proclamations even once the season gets started.

"Everything's new and let's see how it all comes together in training camp," Murray said. "I think we've taken big strides."

ON DECK
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By ROBERT MACLEOD
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Monday, June 29, 2015 – Print Edition, Page S3


The Toronto Blue Jays hope to continue their dominance over an American League East rival when they begin a four-game series at home against the Boston Red Sox beginning Monday night. The Red Sox head into town mired in last place in the standing and the Blue Jays have already won six of the nine games they have played this season.

Although he is having an off-year (11 home runs, .230 batting average heading into play on Sunday), David Ortiz always is a handful for Toronto when the Red Sox play at Rogers Centre.

His 37 home runs mark the highest total struck by an opponent at the ballpark. Alex Rodriguez is No. 2 on that list with 36.

All eyes will be on Marco Estrada, the Toronto starter for Game 2 of the series on Tuesday.

Estrada has made himself look like the second coming of Roy Halladay in recent starts, taking a no-hitter and then a perfect game into the eighth inning of both outings.

June 29, 7:07 p.m. (EST).

Toronto RHP R.A. Dickey (3-7, 4.88) vs. Boston RHP Clay Buchholz (5-6, 3.68).

June 30, 7:07 p.m. (EST).

Toronto RHP Marco Estrada (5-3, 3.45) vs. Boston LHP Eduardo Rodriguez (3-2, 4.33).

July 1, 1:07 p.m. (EST).

Toronto LHP Mark Buehrle (8-4, 3.81) vs. Boston RHP Rick Porcello (4-8, 5.54).

July 2, 7:07 p.m. (EST).

Toronto LHP Matt Boyd (0-1, 5.40) vs. Boston LHP Wade Miley (7-7, 4.38).

All games at Rogers Centre.

This is victory?
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A surge of investor activism in the oil patch has forced boardroom changes. But share prices have so far failed to take notice
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By JEFFREY JONES
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Friday, June 26, 2015 – Print Edition, Page P3


Carl Icahn sent a shock wave through downtown Calgary when he trumpeted via Twitter that he had amassed a position in Talisman Energy, a perennial oil-patch underachiever. Talisman's stock shot above $13 a share as investors wagered the famous U.S. activist investor would force a breakup, sale or other drastic action. Within weeks of the tweet on Oct. 13, 2013, Icahn had struck a deal with Talisman's board to jointly search for solutions to the producer's long-running problems.

Then came...nothing. Months went by and the shares languished, until Spain's Repsol SA began to talk about a takeover. The story ended with a whimper in May, when Repsol completed its purchase of Talisman at the equivalent of $9.33 a share, well below what Icahn paid.

The case highlights the generally disappointing outcome from shareholder activism in the Canadian oil patch. In other sectors, the appearance of a reform-minded outside investor has signalled big gains ahead--think of Bill Ackman's success in shaking up Canadian Pacific. But in Calgary's petroleum community, a recent outburst of activism has gone hand in hand with losses.

Why has activism flopped? Mostly it's the reality of the oil industry, where commodity prices trump everything else, says Brook Papau, analyst at ITG Investment Research. "Your theory of what is right or wrong with a company, and what needs to change, can all be technically sound, but it can be blown away by a commodity-price change and it's out of your control."

Take Bellatrix Exploration Ltd. Its shares surged last August when New Yorkbased Orange Capital announced it had amassed a significant stake. Then the two sides agreed to put Orange's managing partner, Daniel Lewis, on the company's board and hold off on any harsh moves until December, 2015. By May, the stock had fallen nearly 60%.

At Gran Tierra Energy Inc., the company's biggest shareholder, West Face Capital Inc. of Toronto, forced a management shakeup this spring. A new CEO, oil-patch veteran Gary Guidry, assumed control in May with a mandate to focus the company on its operations in Colombia. But the shares have yet to climb above the level of late April, before West Face made its demands known.

Given the lacklustre recent results, cautious investors may now want to regard the appearance of an activist investor in the oil patch as a "sell" signal. But a fairer reading is probably to conclude that it all depends on the outlook for oil. If you think that petroleum prices are set to rebound, now might be a good time to pick up some Bellatrix or Gran Tierra shares. At least you'll be paying less than the activists did.

A solution for Greece, Turkey and Cyprus?
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By LAWRENCE STEVENSON
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Saturday, July 4, 2015 – Print Edition, Page B3


Managing director at Callisto Capital

There is a Cypriot proverb that says: "A fool throws a stone into the sea and all the wise men cannot get it out again." Fourteen years ago, I wrote in my thesis at the Sorbonne that the European Union had thrown several stones in the sea over the years in the process of mishandling the Cyprus file. The EU's strategy has kept the island divided and has hurt the West's relations with a key North Atlantic Treaty Organization ally, Turkey. But, for both Cyprus and Greece, the current financial crisis may provide an opportunity to retrieve those stones and calm the sea.

Canadians have a vested interest in seeing this situation resolved, given our financial and troop commitments to Cyprus. I was one of many Canadian soldiers who completed United Nations peacekeeping duties in Cyprus, doing two tours in the early 1980s. Many generations of Canadian soldiers proudly wear the UN's blue-and-white Cyprus peacekeeping medal.

Last year, the UN commemorated - I say commemorated, since celebrated is certainly not the appropriate term - its 50th year of peacekeeping in Cyprus. Over the past 20 years, the world body has spent more than $3-billion ("U.S.) on Cyprus peacekeeping and it continues to spend more than $50-million each and every year.

In large part, this money has been wasted.

Twenty years ago, the EU was the only player with the power to influence all four protagonists in this tragedy: Greece, Turkey and Greek and Turkish Cypriots. Both Cypriots and Turkey wanted to be invited into the EU and the EU had incentives it could offer to member Greece. Unfortunately, the EU did not use this power wisely. It made its first mistake in 1993, when the European Commission made a Cyprus settlement a necessary condition for EU membership. On the surface, this made sense, but given Greek Cypriots' desire to join the EU, this effectively gave the Turkish Cypriots a veto. Predictably, they dragged their heels and no agreement between the two parties was reached.

Given this Turkish Cypriot intransigence, the EU changed tack completely and, in doing so, made its second fundamental error. Just two years later, the EU asserted, and then made official in 2002, that the condition of a successful resolution to the conflict was being dropped. Thus, the Greek Cypriots could join the EU without a solution to a divided Cyprus and join even if the Turkish Cypriots were not in favour.

Now, the Greek Cypriots had all the power and no longer needed a deal. Predictably, again, no solution was acceptable to both sides.

The UN presented both sides with the Annan Plan, which would have created a two-zone federation with a limited central government. But, since the Greek Cypriots no longer needed a deal to join the EU, the plan had no future. Despite being endorsed by the Turkish Cypriots in a referendum, 76 per cent of Greek Cypriots voted to reject the plan.

Shortly after this, the Greek Cypriots joined the EU on their own.

The EU should never have allowed this without their approval of the Annan Plan.

The current financial crisis, combined with the potential of significant wealth from natural gas, provides a superb opportunity for the EU to take a mulligan.

Greece needs a debt deal, and both it and Cyprus need continuing EU support to repair their severely damaged economies.

Turkey, Greek Cypriots and Turkish Cypriots all want to share in the enormous wealth that will be created by the Aphrodite field and its seven trillion cubic feet of gas, which lie off the island's southern coast. The best distribution solution involves a pipeline to Turkey, which would save about $15-billion compared with the alternatives.

Turkey still wants to be in the EU, even after the frustrations from two generations' worth of failed attempts to join. Despite the reservations of both France and Germany, the EU should move quickly to admit Turkey as a full member.

This would get Turkey onside and force the country to get the Turkish Cypriots onside as well.

In the 27 years since Turkey formally applied for EU membership, nearly two dozen other members have joined. It's time to admit Turkey, with its thriving economy, into the club.

The EU has leverage over both Greece and the Greek Cypriots, since they both need the EU to bail out their economies. The EU should mandate Greek and Cypriot support for the Annan Plan as a precondition for continued financial support. Clearly, there has never been a better time for the EU to use its leverage with all the players to drive home a fair and balanced solution.

The current President of Cyprus, Nicos Anastasiades, is one of the few Greek Cypriot political leaders to have voted for the Annan Plan. And a couple of months ago, in the best news to come out of Cyprus for years, Turkish Cypriots voted for Mustafa Akinci to replace the hawkish former president of Northern Cyprus, Dervis Eroglu. For the first time in decades, the leaders on both sides of the divide are pro-peace. A few weeks ago, Mr. Anastasiades and Mr. Akinci walked together in Nicosia and shared a coffee in a meeting welcomed by both Cypriot communities.

The EU could bring an end to a 50-year peacekeeping mission and also support Turkey, our NATO ally. Turkey has a vital role model in the Muslim world as a secular democratic republic with a vibrant economy. It plays a critical role in Iraq and Syria, and represents a powerful and peaceful alternative to some of the fundamentalist tendencies that are growing in many parts of the Middle East.

Cyprus, many have said, "never misses an opportunity to miss an opportunity." I would hope that the EU and the leaders of Turkey, Greek Cyprus and Turkish Cyprus would help Cyprus to prove this saying wrong.

A round of applause for Canadian banks
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By TIM KILADZE
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Tuesday, June 30, 2015 – Print Edition, Page B2


tkiladze@globeandmail.com

Streetwise

If there's any silver lining for Canadians in the financial calamity unfolding in Greece, it's that this crisis should remind us of how fortunate we are.

Since the global financial meltdown started in 2007, Canadian banks have shone. The country's largest lenders continue to rack up record profits - the Big Six banks made $33-billion combined in 2014 - and in the first few years of the economic recovery, they were praised as a paragon of prudent banking.

If anything, our banks are so solid that they've rocked us into a bit of a slumber. It's hard for many of us to get worked up about what might, or could be, in Greece, because we can't comprehend what it's like to live in a country with a dysfunctional financial system. Greeks are living through a financial five-alarm fire, which sent the S&P/TSX composite index slumping 317 points, but all my touch-football team cared about during Monday's market turmoil was who would grab beers for last night's game.

Perhaps it's time we punt our apathy to the sidelines. In a week when we celebrate Canada's birthday, the Greek crisis should prompt us to give our banking system the praise it deserves.

Globally, our lenders don't grab as many headlines as they once did, because rival financial institutions have been getting their houses in order. But they, and the broader system, are just as worthy of praise as they were during the Great Recession.

Maybe it doesn't feel fair to compare our lenders to those in a country such as Greece, which has been in dire straits for years.

It's a bit like a team of all-stars playing against amateurs. But even relative to big global giants such as JPMorgan and Barclays, Canadian lenders still stand out.

Let's not forget that Canadian banks have walked away unscathed from all the embarrassing scandals - including the fixing of the London interbank offered rate ("Libor) and the global exchange market - for which regulators slapped hundreds of billions of dollars worth of fines on some of the world's biggest lenders.

Not committing crimes you shouldn't commit in the first place is a low hurdle to clear. But when it comes to profits, Canadian banks are practically fawned over. In a world in which HSBC and Credit Suisse are restructuring their far-flung organizations in hopes of delivering a return on equity, one of the standard measures of profitability across banks, of 10 per cent, Canadian lenders routinely deliver ROEs between 15 per cent and 20 per cent.

And they're well capitalized, too. Many global lenders, such as Deutsche Bank, have had to raise tens of billions of dollars to shore up their balance sheets in order to meet new regulatory thresholds, but Canada's banks easily achieved a Tier-1 common-equity ratio of at least 10 per cent, three percentage points higher than the new global minimum - and their executives barely batted an eye in the process.

As easy as it is to shine the spotlight on the lenders themselves, this success story must be credited to the country's entire banking system, which includes the banking watchdog, the Office of the Superintendent of Financial Institutions.

In the past year, the biggest regulatory change that global banks have had to contend with is the coming implementation of the leverage ratio, which forces lenders to have capital amounting to 3 per cent of their total assets.

("Before this, capital ratios gave a weighting to different assets, and supposedly safer assets required less of a cushion.) Canadian banks have barely had to do anything to comply with the new rule because OSFI implemented its own version of the leverage ratio decades ago, known as the assetto-capital multiple.

Sure, executives get miffed with the watchdogs from time to time, but when CEOs look back - as they did on the five-year anniversary of Lehman Brothers' collapse - they openly praised the country's tight-knit banking community and the frank talks they consistently have with regulators.

By no means are Canada's banks angels; they make more than enough mistakes to fill newspapers. Domestic household debt is at record highs, a worrisome trend, and the Big Six play a major role in easy credit because they are the country's dominant lenders. As they expand beyond their home borders, they are also having hiccups along the way.

Toronto-Dominion Bank paid $53-million ("U.S.) in penalties to the U.S. government in 2013 because one of its employees ran a Ponzi scheme in Florida, and last year a Delaware judge forced Royal Bank of Canada to pay $76million for its advisory role in a contentious takeover.

Beyond the banks, other pillars within the financial system also have flaws. Canada Mortgage and Housing Corp., the country's largest mortgage insurer, was arguably a ticking time bomb until new leadership in the past three years enforced more openness and better controls.

The big worry is that our banks become complacent. After such a stellar run, and after steering clear of so many of the global regulatory probes in the past few years, it can be easy to get cocky.

Even though they are on such solid footing, they must be careful not to chase growth in other countries simply because they can.

An opportunity for Canadian dairy to expand and export
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By CHRISTOPHER RAGAN
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Wednesday, July 1, 2015 – Print Edition, Page B2


Associate professor of economics at McGill University in Montreal and a research fellow at the C.D. Howe Institute in Toronto

Economic Insight

Over the next few months, Canadians will hear a lot about the negotiations of the Trans-Pacific Partnership (TPP) and about the possibility that our "supply management" of the dairy and poultry industries is on the bargaining table. This might even become a significant issue in the fall federal election.

So this seems like the right time for a primer.

TPP is an ambitious trade agreement, 10 years in the making so far, among 12 countries of the Pacific Rim, including the United States, Mexico, Canada, Australia, New Zealand and Japan. Canada has become infamous in past trade negotiations for its hypocritical stance on agricultural policy - wagging our fingers at countries that subsidize their grain farmers while insisting that our own systems of supply management are innocent and worth ignoring. For TPP, however, our trade partners are finally calling us out and pushing for a dismantling of these systems.

"Supply management" is the Canadian term for a system that forcibly restricts output and raises prices, thus enhancing producers' incomes. The output of milk is restricted through the use of "quota" - dairy farmers must possess enough for their entire dairy herd, and cannot sell their milk without it. The total amount of quota is less than the quantity of milk that would otherwise be sold in an unregulated market, and this restriction drives up the market price of dairy products.

You might think this high-price system obviously benefits dairy farmers, but it's actually not so simple. Farmers lucky enough to receive their quota for free, when the system was first created many years ago, are now sitting on assets of tremendous value - and have also been benefitting from years of high milk prices.

Any farmer who entered the industry much later, however, had to purchase the necessary dairy quota at market prices.

Today, it costs between $25,000 and $30,000 to purchase the quota to sell one cow's milk; adequate quota for a typical herd of 70 cows would thus cost about $2-million. That's an enormous upfront capital cost, in addition to the cost of the herd, land, structures, equipment and labour. For these "newer" farmers, high milk prices are absolutely essential for generating even a normal return on these high capital costs.

Another aspect of supply management is that very high tariffs on imports are needed to prevent cheaper foreign dairy products from flooding the market.

Tariffs between 200 and 300 per cent are typical. The overall result is that dairy products are ridiculously expensive in Canada, as any reasonably alert Canadian shopper notices while visiting a grocery store in Seattle or New York or London or Paris.

These high prices are obviously bad for all Canadian consumers, but they also harm the competitiveness of Canadian companies producing prepared foods with dairy inputs.

Supply management harms consumers, and forces our dairy farmers to incur large capital costs and to serve only the small Canadian market. And we appear to be stuck with the system, because new farmers need the artificially high prices in order to cover their artificially high quota costs. What system would be better?

If Canadians really cared about their dairy farmers, we would change the policy to encourage farmers to expand their operations and export to the rest of the world. This is precisely the opportunity TPP offers us if we give up supply management.

Given our rich endowment of prime agricultural land, there is no reason we couldn't be as successful as Australia and New Zealand at exporting our dairy products. Only about 5 per cent of our dairy output is currently exported; for New Zealand, the number is roughly 95 per cent.

Making the transition from today's dairy industry to a larger and export-oriented one is possible, but it requires some assistance from government.

Compensation to farmers for some part of their quota value, especially those new to the industry, is only fair since they purchased the quota under a different set of rules and expectations.

Despite its cost, the provision of such government assistance should not be seen as an obstacle to reform. It would be far better for taxpayers to make these transitional payments to some dairy farmers than to miss the opportunity of moving permanently to a world with more Canadian dairy farmers and cheaper dairy products for all Canadians - and also with more Canadian cheddar in grocery stores around the world.

Associated Graphic

JOHN SOPINSKI/THE GLOBE AND MAIL SOURCES: WORLD BANK; CANADIAN COUNCIL OF CHIEF EXECUTIVES

Supply management distracts us from Canadian dairy's long game
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By TED BILYEA, DAVID MCINNES
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Saturday, June 27, 2015 – Print Edition, Page B4


The issue of supply management polarizes opinion into two sides: Defend the status quo or dismantle the system. Unfortunately, this rigidness masks important strategic issues about how to actually help expand Canada's dairy industry.

While all eyes remain focused on negotiations to conclude the Trans-Pacific Partnership (TPP), we need to keep the longer game in mind.

We need to take the offensive by tackling global subsidy practices that affect beef, pork and other sectors, including dairy. Fortunately, our sustainable agricultural production advantages may give us additional leverage.

Canada's dairy sector is being squeezed and faces a growing trade deficit. Canada imports large volumes of various milk proteins (known as concentrates and isolates) while our dairy exports are restricted - a threat that receives little attention.

Imports of such proteins from the United States are up about 300 per cent since 2010, a trend that may continue once the CanadaEU trade deal comes into force, and possibly also under TPP.

Dairy proteins are important to efforts by food processors to develop innovative and healthy products, such as yogurts and high-protein beverages - and consumers are lapping up these new products both here and abroad.

Under the North American freetrade agreement, these milk protein imports cross the border tariff-free. But Canada's export potential is restricted by a 1995 World Trade Organization ruling that caps our exports of butter, skim-milk powder, cheese and other products.

Canada's supply management system keeps the price of milk products above the world price.

This makes lower-cost imports attractive to food processors.

Lower-priced and uncontrolled imports of protein concentrates and isolates displace demand for Canada's skim-milk powder, which can then only be diverted into lower-value animal feed - at significant cost to producers.

Simply labelling supply management as "protectionist" misses a critical point. Canada can't unilaterally expand its dairy exports.

If we want Canada's second-largest agri-food sector to grow, then we need to consider how expansion in export access would actually take place.

We also need to push back on other countries' practices. Our competitors produce and export milk products by utilizing a complex array of direct and indirect subsidies - and it goes well beyond this one sector.

Legitimate support is given to agriculture in Canada and other countries for good reason, such as to compensate for crop failures.

However, certain global subsidies create unfair competition and drive prices down.

Subsidies can also encourage environmentally unsound practices. Dairy production in the southwestern United States is successful in part because it draws down on the region's aquifers - a "natural capital" benefit that's not factored into price.

Across Europe, the Organization for Economic Co-operation and Development has documented examples where pesticide concentrations in surface water and groundwater exceed recommended national drinking water limits.

Most of Canada's water and soil resources do not face these pressures. Dairy supply management has not created significant surpluses at the expense of ecosystems. Our country's wealth of water and land confers certain comparative advantages across much of our agri-food sector, if managed properly. Canada could be poised to take the offensive in trade talks by opening up a new front: the relationship between subsidies and sustainability.

With much of the trade access groundwork having been laid, we now need to go beyond driving down tariffs or increasing market access. Targeting foreign government-subsidized practices (including those that encourage unsustainable practices) would be a calculated strategic move.

Raising the environmental bar may eliminate some highly inefficient competitors and those requiring massive investment to meet even minimal sustainable requirements. Prices would better reflect the real costs, which would bode well for our dairy producers and agri-food trade. Taking on sustainability would also require us to improve our practices, such as better tracking and tracing of the origin of ingredients and food and the impacts of their production steps. Consumers, food companies and retailers increasingly expect this, too.

Canada's next trade strategy could assume a three-pronged approach. First, unravelling these large direct and indirect foreign subsidies and, second, demonstrating Canada's comparative advantages on sustainability performance could benefit the agrifood sector as a whole. Third, with the clock ticking, taking concerted action on dairy-export rules may allow Canada to be more competitive, benefiting our producers, agri-food processors and exporters.

Ted Bilyea is chair and David McInnes is chief executive officer of the Canadian Agri-Food Policy Institute. The recent Agri-Food Economy Systems paper Canadian Dairy Exports: The Knowns, Unknowns and Uncertainties was an important source for this commentary.

The blogger, the Buds and the taxman: Case tests a hockey writer's business plan
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By JAMES BRADSHAW
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Monday, July 6, 2015 – Print Edition, Page B1


Tech . Telecom . Media

With the advent of cheap online technology, and a contracting media job market, some journalists have sought to reinvent themselves as independent brands. But fashioning a steady living remains an uphill climb, even for some established personalities.

Case in point: Howard Berger. The long-time voice of Toronto Maple Leafs reporting for the FAN 590 saw the writing on the wall before the radio station he called home for 23 years cut him loose on June 1, 2011. He planned to reinvent himself as an independent hockey blogger. But a false start on the money-making side of his venture left him defending his tax-loss claims in federal court.

Mr. Berger, 56, covered the Leafs as a radio reporter and selfdeclared fan for 17 years. Yet his effort to craft a small business from his expertise and reputation serves as a cautionary tale about the challenges of turning content and clicks into a paycheque, even as digital media expands rapidly. He claimed business losses of $26,540 in 2011 and $37,866 in 2012, according to court documents; his gross income from the blog in that span was $7,500.

On June 19, Mr. Berger won his tax appeal - the amounts he claimed were not at issue, but rather whether his blog, titled Berger Bytes, should be considered a business or a personal hobby.

The plan, as described by Mr. Berger and by Justice Campbell Miller, was "simple." Mr. Berger started blogging the same night he lost his job, and soon paid $1,500 to build a more professional site. To stay in the loop and stand out from a multitude of other sports blogs, he kept travelling to Leafs road games. In 18 months, he spent more than $35,000 on flights and car rentals, plus another $23,000 on hotel bills. With next to no money coming in from the blog, he relied on his 21-month severance package from the FAN.

"I really didn't know what my goals were. It happened so quickly," Mr. Berger said in an interview. "I wanted to make sure I stayed in the game."

He viewed the money poured into the venture early on "as essentially a startup cost." Meanwhile, the Leafs struggled mightily, providing plenty of fodder.

Even Justice Miller couldn't resist a parenthetical jab: "It is taking immense internal restraint to not comment on the ongoing Leafs 'legacy,' " he writes in his decision.

Mr. Berger e-mailed some 500 hockey contacts, Don Cherry included, to spread the word. In the early stages, his blog typically attracted 3,000 to 4,000 visits in a day, and traffic has "gone up steadily," he said, to more than 10,000 visits most days.

Where some startup news sites have sought support from crowdfunding, Mr. Berger has kept his focus on sponsorships, expecting they would materialize if he grew his blog's following. By the end of 2012, only one had stepped forward: Lawyer Richard Bogoroch paid $7,500 to put his firm's logo on Bergerbytes.ca though the 2012 playoffs.

In his judgment, Justice Miller acknowledges a one-man media operation can be expected to start slowly, likening it to "a struggling artist" in his early career.

But he remains skeptical of Mr. Berger's long-term prospects.

"Businesses are out to make money and generally have an idea of how much and how feasible the money-making venture is.

Mr. Berger does not seem to have a handle on this," Justice Miller writes. "It leaves me to guess whether a steady readership in the few thousands is sufficient to attract sponsors to cover expenses of $30,000-$40,000 a year."

Mr. Berger agrees he could have planned better, but says he's had "numerous discussions" with potential sponsors. His site is considered functional but "ugly," so he expects to launch a redesigned page dubbed Between the Posts in the coming weeks, and is optimistic he will land a major sponsor for the site soon.

Four years in, he still writes on the Leafs almost daily, though he can no longer afford to travel to away games. And he says any sports blog should have modest revenue expectations. "It's saturated out there," he said.

But, as jobs go, "it's enjoyable as heck."

Full-time employment model is giving way to the Gig Economy
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By TODD HIRSCH
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Thursday, July 2, 2015 – Print Edition, Page B2


Economic Insight

Many economists and social advocates are fretting these days about the job market. It seems that more Canadians are working in low-paying, part-time jobs. Benefits and pensions are becoming less common and job security is eroding.

The concern is understandable.

In the language of philosophers and anthropologists, the 21st-century labour market is in the liminal space. It's at a threshold. The old patterns and rituals are rapidly passing, but the new has not yet fully arrived. It is that point between chapters of a person's life when all seems ambiguous, confusing and even terrifying.

The old economic model of work was born in the Industrial Revolution. Shift work is a relatively recent idea in the history of humankind. It was translated into the service sector and office economy in the 20th century. As Dolly Parton belted out in 1980, "Working nine to five / What a way to make a living!"

The full-time, full-benefits, fullpension model of work is gradually fading away. There is legitimate concern over the working poor, who are struggling economically by piecing together two or three part-time jobs. The hours are unpredictable, there are few or no benefits and a pension is a pie-in-the-sky dream.

The 20th-century version of employment is now morphing into something new and it's normal to feel anxious about it. We are in the liminal space where the old is passing but the new has not yet arrived.

But if we can set aside our biases and longings for the good ol' days of full-time employment, we can start to glimpse the job market of the future - and it may not be as discouraging as some may think.

The future of work is evolving into a series of tasks or activities that we do in exchange for something else. It may be cash, as it was in the 20th century. But it may be something else, such as shared accommodation or transportation. The sharing economy is the 21st-century response to those less interested in accumulating physical assets.

The Gig Economy, as it's called, fits well with millennials and their general ambivalence to what the baby boomers or Gen Xers considered a good job. A corner office, a dedicated parking stall, a secretary to pour our coffee, a gold watch at retirement - for millennials, it seems about as strange as living on Mars.

Stringing together a series of tasks or "gigs" makes interesting new demands on workers. Skills must constantly evolve. You're always meeting new people, encountering new ideas and adjusting to changing conditions.

Nothing is static, everything is fluid and evolving. Loyalty to corporations is replaced with connections to other human beings.

For millions of full-time workers in the 20th century, none of this applied. It was a beige the Bangles' Susanna Hoffs meant by Manic Monday.

But in the Gig Economy, Monday will become just another day, no more or no less manic than any other day. Shift work will become part of a steady flow for people quite capably juggling a series of tasks.

Gen Xers have a difficult time wrapping their heads around the Gig Economy. Where's the economic security? Where are the health benefits and pensions?

How can these kids ever expect to retire wealthy? These questions make perfect sense to those of us raised between 1950 and 2000 because that's all we ever knew.

But rather than focusing on our 20th-century notions of employment, we'd be better to concentrate on equipping young people with the skills they'll need to surf their way through the Gig Economy. We don't know precisely what work will look like in the future.

But that's okay - we're in the liminal space.

Todd Hirsch is the Calgary-based chief economist of ATB Financial, and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline.

GM pension plans short $3.6-billion
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By GREG KEENAN
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Friday, June 26, 2015 – Print Edition, Page B1


The deficits posted by General Motors of Canada Ltd. pension plans dwindled slightly last year, but the auto maker still faces a shortfall of $3.6-billion that must be eliminated by 2020 under Ontario government pension rules.

The solvency deficiency in GM Canada's hourly and salaried pension plans dropped by 4 per cent to $3.558-billion from $3.705-billion, according to the most recent valuation of the pensions as of Sept. 1, 2014.

The unionized plan has assets that would cover about 72 per cent of benefits if it were wound up as of the valuation date.

That's also an improvement from 2013 levels, when the windup liability stood at 66 per cent.

It's also much healthier than the 45-per-cent deficiency in 2009, when federal and Ontario taxpayers contributed $10.8-billion to the bailout of General Motors Co. - $4.5-billion of which went to help reduce the pension deficit.

The plans were boosted in 2014 by a 16 per cent return on assets.

But they were hurt by a reduction in the discount rate, which is the interest rate companies use to measure the long-term return on assets set aside to cover the obligations in the funds. The discount rate for the GM Canada defined benefit plans fell to 4.25 per cent from 5 per cent a year earlier, meaning a higher value of assets is required to backstop the liabilities. The state of the pension plan for unionized employees represented by Unifor is already a key issue in discussions between the company and the union, a year before they begin officially bargaining on a new contract.

The company is intent on eliminating the defined benefit portion of the pensions offered to newly hired employees, sources have said. The plan for newly hired unionized employees is a hybrid plan that combines defined benefits with defined contributions by the company.

Union sources have said that local leaders in Oshawa, Ont., and St. Catharines, Ont., are prepared to make that concession to GM Canada in return for commitments of new product - especially in Oshawa. There are no new vehicle programs allocated to Oshawa to replace vehicles that are being shifted elsewhere or going out of production.

More than 29,000 unionized retirees and beneficiaries receive a pension from the plan, but that number will grow when 1,000 jobs are eliminated later this year when the Chevrolet Camaro gets transferred to Lansing, Mich.

Union officials are hoping that the combination of the low Canadian dollar and the ability to hire new employees with less costly pensions and lower wages than existing employees for 10 years will convince GM to allocate new products to Oshawa and an engine and transmission plant in St. Catharines.

GM Canada faces a payment of $638.2-million in the current pension year but it can apply $287-million that remains in its prior year credit balance, effectively a bank account from which it can draw to reduce annual cash payments. But if it uses the rest of the credit balance this year, the remaining payments to eliminate the solvency deficiency by 2020 will be cash outlays.

Ford Motor Co. of Canada Ltd. faces payments of about $640million to eliminate the solvency deficiency in its unionized pension fund by 2019.

If Ford's plans had been wound up as of Dec. 31, 2013, the assets would have covered 75 per cent of the liabilities.

"Like many companies, Ford of Canada chose to participate in the Ontario government's solvency funding relief provisions, which were put in place by the government in recognition of the significant impact the economic crisis had on Ontario pension plans," spokeswoman Michelle Lee-Gracey said.

Ford Canada is on track with a plan to reduce the solvency deficiency and will finance any new deficits that arise as required by Ontario pension regulations, Ms. Lee-Gracey said.

More M&A deals likely as crude recovery runs out of gas
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By JEFFREY JONES
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Friday, July 3, 2015 – Print Edition, Page B1


CALGARY -- Streetwise

Hopes for a major recovery in oil prices this year are dimming, which could lead to a gusher of energy company mergers and acquisitions as corporate finances creak under the strain.

The deal flow in the Canadian oil patch has been muted so far this year, as would-be sellers waited for an uptick in commodity prices to lift the potential proceeds they could garner for their assets. At around $5-billion, the transaction value in the first half was about a quarter of the yearearlier amount.

Now, a flood of crude from the Organization of the Petroleum Exporting Countries, resilient U.S. supplies and fears over Greek economic contagion are conspiring to keep a lid on oil prices.

Debt-heavy Canadian oil producers, such as Legacy Oil + Gas Inc. and Pacific Rubiales Energy Corp., have agreed to buyouts in recent weeks after exhausting other efforts to strengthen their balance sheets. If crude is stalled again, more deals are likely on tap.

"Clearly, the guys who are more overleveraged are going to be facing increasing pressure from the banks to resolve the situation that they're in," said Jeremy McCrea, analyst at AltaCorp Capital Inc.

U.S. benchmark oil rebounded past $60 (U.S.) a barrel in June from the low $40s in March. However, the Conference Board of Canada said on Thursday that the recovery appears to have run out of steam, adding to a chorus of bearish oil forecasts.

It predicted crude will stay under $65 this year, a far cry from levels above $100 a barrel a year ago.

U.S. shale-oil production has not declined as sharply as many analysts had expected, even as the number of rigs drilling in the United States fell by about half in seven months, said Kip Beckman, the Conference Board's principal research associate.

Adding to bearish data, the U.S. active oil-rig count rose by 12 in the past week, marking the first increase this year, according to oil service company Baker Hughes Inc.

Perhaps a bigger driver has been Saudi Arabia's adherence to its vow to protect market share against non-OPEC suppliers, even as prices tumbled, Mr. Beckman said.

"With those two factors, and [strength in] the U.S. dollar, that's why we're pretty conservative about any coming rebound.

And there's quite a lot of downside risk," he said.

West Texas Intermediate oil fell 42 cents to $56.54 a barrel on Thursday, a day after skidding more than 4 per cent to a twomonth low in reaction to an unexpected build in U.S. inventories.

In its weekly tally, the U.S. Energy Information Administration reported U.S. stocks rose by 2.4 million barrels in the week ended June 26, owing to high domestic output and increased imports. The market had expected a withdrawal.

Michael Loewen, commodity strategist at TD Securities, expects WTI to remain stuck in the current range for a while due the global oversupply of crude.

In a report, Mr. Loewen predicted a recovery in Canadian production, following extensive spring maintenance at oil sands plants and the shutdown of bitumen projects due to recent forest fires, will weigh on U.S. oil prices.

Meanwhile, the potential end to sanctions on Iran's oil exports as nuclear talks with world powers continue is heaping additional pressure on global prices.

Crude's shift into neutral has hit Canadian oil and gas stocks hard. The Toronto Stock Exchange's S&P/TSX energy index fell this week below its March low.

Mr. McCrea pointed out, though, that the industry slowdown is having a positive impact on some companies. Oil-field service rates have dropped by as much as 15 per cent to 20 per cent in the downturn, which may prompt healthier producers to increase drilling activity in the coming months.

Stock is high for NDP-connected advisers
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By SIMON DOYLE
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Monday, June 29, 2015 – Print Edition, Page B2


Politics Insider

After NDP Leader Rachel Notley won the Alberta provincial election this spring, Ken Georgetti's phone started ringing.

The former president of the Canadian Labour Congress was getting feelers for job offers.

The semi-retired former union leader went on to a position as strategic counsel to Canadian Strategy Group, an Edmonton government relations consultancy, as many firms re-evaluate their dearth of NDP-linked talent.

Between consulting-firm needs, Ms. Notley's new government in Alberta and the national party's first-place polling numbers, demand for New Democrat hires has reached a high that insiders say reflects the rise of the previously third-placed party.

Tim Powers, a Conservative lobbyist and vice-chairman at Summa Strategies, said some clients are interested in help from his firm and its two NDP consultants, Robin MacLachlan and Shay Purdy, who know the party.

"Every party has a different lexicon, nomenclature or patterns of conversation," said Mr. Powers. "If you're going to have results, or you're going to be heard, you're going to need to know how to talk with people in a language they understand."

Similarly, one NDP-connected person added that while consulting firms in Alberta understand government bureaucracy, they don't understand the NDP or know the new caucus. Some in the private sector have joked that they "can't read, write or even spell NDP," the person said.

There was already a feeling that New Democratic resources were stretched in 2011, after the late party leader Jack Layton won a historic victory, another NDP-connected source said. Now, the feeling is heightened.

Consulting firms are competing for New Democrats as the Alberta government, still short on political aides, has been poaching NDP staff from across the country, including several from Manitoba and some from Ottawa.

Nathan Rotman, chief of staff to the Alberta Finance minister, and Scott Harris, chief of staff to the Alberta Agriculture minister, were both senior NDP aides in Ottawa before joining Ms. Notley's team.

NDP résumés are crossing the country as several others in Ottawa have been offered positions in Alberta that they declined, sources said.

Brad Lavigne, a former NDP national campaign director who in 2012 became a vice-president at Ottawa public affairs firm Hill+Knowlton Strategies, recently rejoined the national party as senior campaign adviser.

Vancouver-based Wazuku Advisory Group, a management consulting and strategic planning firm, is expanding to Edmonton and probably looking for some NDP-connected staff.

The firm's principal, Brad Zubyk, said the company had been planning the expansion for about seven months and it is looking for someone who has "connectivity" and an understanding of the Alberta government's priorities.

In other recent hires of former NDPers, Canadian Strategy Group, in addition to hiring Mr. Georgetti, brought on Moe Sihota, former president of the B.C. New Democrats.

And in May, consulting firm Navigator hired Sally Housser, press secretary to Ms. Notley during the provincial election campaign and former deputy national director of the federal NDP. The same month, Impact Consulting hired NDP caucus communications director Brookes Merritt.

The demand also means NDP consultants are a little busier.

These days, Robin Sears, an NDP-connected principal and government relations consultant at Earnscliffe Strategy Group in Ottawa, has been travelling regularly to Edmonton on behalf of clients.

"Business is learning fast how to speak to the new government," Mr. Sears said via e-mail. "Many of them took a long time getting the Harper government's 'hot buttons.' Now advisers need to teach their clients a new Alberta vocabulary."

Simon Doyle covers lobbying and the intersection of business and politics in Ottawa. He writes for Politics Insider, which is only available to subscribers of Globe Unlimited.

England coach takes shots at Canadian team
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By DAVID EBNER
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Saturday, June 27, 2015 – Print Edition, Page S3


VANCOUVER -- It's on. And it's hot.

England against Canada, Saturday in Vancouver at the Women's World Cup, England aiming to upend Canada at home in the quarter-finals just as Canada dumped Great Britain at home at the 2012 London Olympics.

In the tradition of a hyped prize fight with ample bursts of incendiary trash talk, England's coach, Mark Sampson, has tossed buckets of gasoline on the pregame bonfire with an array of attacks and accusations.

While Canada dealt with its own controversies this week, Sampson was declaring that referees at the World Cup have been incredibly kind to Canada. Sampson believes refs have called only a fraction of the fouls that should have been whistled on "the most aggressive team in this tournament." And he had a lot more to say, too.

This is exactly what this tournament needs. Intensity. Passion.

Controversy. Since the June 6 kickoff in Edmonton, the tenor has been pretty placid. The games have been slow. Occasional upsets haven't resonated.

But now, with eight teams left and the trophy in sight, the real tournament has begun and attention is beginning to focus.

Sampson knows it. His questioning of officials wasn't wildeyed chatter - he deliberately set that fire. Even though his team has beaten Canada the last three times the two sides have played competitive matches (Canada didn't score a single goal in those games), Sampson's aim this week was to turn Canada's elbows-up style against the home team.

He wants everyone looking at Canada's edgy play, especially when it is defending its penalty area.

Five Canadians have yellow cards acquired during the tournament, all of them held by key players: Christine Sinclair, Kadeisha Buchanan, Josée Bélanger, Desiree Scott and Allysha Chapman. If any of them gets handed a second yellow card, they will be suspended for one game - and no one wants to miss a potential World Cup semifinal.

So if Sampson succeeds in putting the Canadians under more scrutiny, he may also force them to soften their physical play. And a subdued Canada becomes an essential advantage for England.

Sampson of course knows that Canada, against the U.S. back in 2012, was on the wrong side of a referee's bad call, a pain that still lingers.

Sampson's spiel was published Friday in The Guardian. Among other spicy views, Sampson said Canada has yet to score a worthy goal in the tournament "that hasn't come from an opponent's error or a refereeing error." The latter was a reference to Canada's 1-0 opening win against China, on a Sinclair penalty kick after a late call against China that Sampson called "very dubious."

Sampson, a 32-year-old Welshman, also took on Canada coach John Herdman, a 39-year-old Englishman from near Newcastle, for his "tight shirts and his RayBans." Sampson fired at Herdman's penchant for the spotlight: "We've got to remember it's the players who are the stars of the show, not the managers."

It was a remarkable verbal assault from the England coach, one from which Sampson, in an interview with The Globe and Mail Friday morning, did not back down. He redoubled the effort.

"We're stating what we feel is evidence, we're bringing what we feel are facts to people," said Sampson. "We've asked the question of what type of team we're facing, and I stand by that: We're facing an incredibly aggressive Canadian team. And I'm not saying there's anything wrong with that. Football's about tackling, being physically dominating. And Canada's used that as a huge weapon."

The coach's weapon is to raise concern about fouls, especially in the penalty area - a foul there equals almost a certain goal, a penalty kick. Sampson twice invoked the question of fouls in the box, and cited Kadeisha Buchanan. He didn't have to mention that the 19-year-old is a breakout star, a hard-tackling defender, a key to Canada's success.

"There is the possibility that, in both boxes, officials will have to make some big decisions," Sampson said.

The referee in charge on Saturday, Claudia Umpierrez of Uruguay, has not overseen any of Canada's or England's matches at this World Cup. Umpierrez, 32, has been an international official for five years, and this is the biggest stage on which she has ever worked - the biggest, loudest and most important game, with 50,000-plus people attending.

As a backdrop to England-Canada, the Sampson-Herdman contest has a little history. In 2013, the England coaching job came open and it was presumed that Herdman was heading home, the obvious candidate after Canada defeated Great Britain at the 2012 Olympics. He declined, however, preferring Canada and the team he was building here. Sampson took the job.

Herdman, earlier this week, stirred things up a little too.

Asked about the emotional backdrop, having turned down a chance to coach England, the Lower Mainland-based coach was somewhat sharp: "You've just got to look out your window in B.C. and see the mountains and the lakes. Where would you rather be, eh? Where would you want your kids to grow up?" Herdman grew up in a tough, small town in northeast England, where the steelworks had been shuttered. Crime and other ills plagued the citizenry. It was the type of place ambitious young people might want to leave behind.

"Reality is," said Herdman, pivoting, "all we're thinking about is beating a team. There's no emotion around who we're playing."

Doesn't sound that way. Sounds like it's going to be a fever pitch.

Perfect for everyone watching.

Corralling emotion will be essential for both sides, but Canada especially. "They're in the back of people's minds," said Herdman of the team's yellow cards. "But we've just got to do what it takes to win the match. We won't say to players, 'Don't put the tackle in.' They've got to do it."

Sampson, meanwhile, readies England for a Canada at full force.

"There is no way that this Canadian team will be any softer than they've ever been, I can guarantee that," he said. "Canada will bring a huge amount of aggression to this game."

ON OUR WEBSITE

United States 1, China 0 The U.S. defeats China in the quarter-final and faces Germany in the semi on Tuesday. globesports.com

Associated Graphic

England coach Mark Sampson has publicly criticized Canada's aggressive play so far in the tournament.

FRANÇOIS LAPLANTE/FREESTYLEPHOTO/GETTY IMAGES

Has Estrada gone from plugger to Picasso?
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The truly great pitchers get the truly great descriptor of 'painter,' but it may be too early to tell if the Jays journeyman is an artist
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By CATHAL KELLY
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Tuesday, June 30, 2015 – Print Edition, Page S3


TORONTO -- ckelly@globeandmail.com

After he was shelled in Boston two weeks ago, Marco Estrada went from the mound to the video monitors the Jays schlep around on all road trips. The 31year-old has had an itinerant, upand-down career. This was as bad as it's ever been.

"I had no clue where the ball was going," Estrada said.

He'd given up five runs in the fifth inning, and been hooked.

Going back to the tape, he saw a few errors in his delivery. He doesn't want to say exactly what.

"If I were to show you video of what I was looking at - between that one terrible outing in Boston and a good outing - you'd say, 'What am I looking at?' They'd look exactly the same to you. It was such little, tiny things. It makes so much difference."

Two days later, Estrada threw a bullpen session in New York. He was trying to incorporate the fixes he'd identified. And it all just came together.

"That's when I told myself, 'I've found it again. Here we go.' " A pitcher is not great because he can throw accurately, hard or with action. The minor leagues are littered with guys who can do that. A pitcher is great because he can do those things with consistency. Being able to do that inspires the most evocative descriptor in baseball - "painting."

Great ones paint. The guys in the minors may as well be priming the walls of a barn.

Eight years into his big-league career, is it possible Estrada has suddenly gone from a house painter to Picasso?

He shrugs. You can tell he's a journeyman. Established starting pitchers are skittish. They don't like talking about pitching, or much else. By those standards, Estrada is still a minor-leaguer - approachable and totally at ease.

This is a guy who drives a scooter to work. Not a Vespa. One of those little two-wheel, standup jobs with a lawnmower-sized engine attached. He parks it at the entrance to the clubhouse, and then carries it up the elevator to street level after every game. This man has no airs.

Over the two starts since Boston, Estrada has been as good as any starter in Jays history, carrying a no-hitter into the eighth against Baltimore, and a perfect game into the same frame against the Rays.

Has it struck him that he's in a historic groove?

Estrada pulls back a bit and smiles: "No, I wouldn't put it that way."

Instead, he'd prefer to play down the past 10 days.

"If it would've been a perfect game or a no-hitter, that would've been cool," Estrada says with a shrug. "If I'd given up that one hit in the first inning instead of the eighth, would we even be talking about this right now?" Probably. People tend to get excited when they find out they've stolen something. Estrada straight-up for a want-away Adam Lind - the trade that brought him to Toronto in the off-season - is beginning to look like theft.

Meanwhile, the team's putative ace, R.A. Dickey, continues to look suitable to needs, and no more. He was workmanlike against the Red Sox on Monday night, giving up three runs over six innings. He left trailing. Boston won 3-1.

Dickey also has a late-blooming story, though it's come off the rose a bit since arriving in Toronto.

For eight years, Estrada has bounced between the bullpen and the rotation. He's had his moments, but never like this. He says he's felt this good before, but with a difference. This year, he's added a cut fastball to his fastball-curve-changeup repertoire.

"It used to be that when I fell behind a hitter, I'd have to throw my four-seam [fastball]. I don't throw that very hard, so I have to locate it perfectly."

That didn't work out so well last year. Estrada gave up a major-league-worst 29 home runs.

"Now I can throw a cutter, and just keep it around the plate," Estrada said. "It's a huge key for me."

Asked if he'd ever seen a pitcher flip a switch in his early 30s, and go from a jobbing pro to a star, manager John Gibbons couldn't come up with a name.

There have been a few, usually soft-tossing lefties in the David Wells/Jamie Moyer mould. After years of erraticism, Randy Johnson becalmed himself in his early 30s. By 35, he was the best pitcher in baseball.

But it happens rarely enough that you can tick off the people who've managed it.

It's far too early to say Estrada has managed the trick. He may still be surprising people with an expanded arsenal. If so, that won't last long. Hitters watch video, too.

That's the likeliest scenario - that the past two outings are an outrageous performance spike in an otherwise average career.

But while we still can, why not have some fun with the "What if?" game.

What if Estrada - who didn't get out of spring training with the major-league team - is now a front-line starter? What if he isn't really a No. 5, but a No. 2 or 3 in the rotation? What if he can keep pitching at this level for the next three months?

If Estrada is really this good, what looked like a profoundly underpowered Jays rotation a month ago suddenly looks postseason-worthy. It will look doubly so whenever Aaron Sanchez returns from injury.

It probably isn't going to be this good for a long time. History's weighing against Estrada. He'll go again Tuesday against Boston. It's probably the team's most anticipated pitching start since Dickey's debut.

And until this run of form proves illusory, why shouldn't we adopt Gibbons's open-hearted judgment on the new Estrada: "He's on to something ... Hey, run with it."

Follow me on Twitter: @cathalkelly

Associated Graphic

For eight years, Marco Estrada has bounced around the bullpen and the rotation, but as of late, it looks as if he's flipped a switch.

BRIAN BLANCO/GETTY IMAGES

Jays shoot down Rangers to take series
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Toronto manages to hold down the hard-hitting Texas team, will host the Boston Red Sox in a four-game series starting Monday
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By ROBERT MACLEOD
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Monday, June 29, 2015 – Print Edition, Page S3


TORONTO -- There is no argument that Roberto Osuna throws a baseball with authority.

At the tender age of 20, the rookie right-hander has been a revelation out of the Toronto Blue Jays oft-maligned bullpen this season, one of the few that manager John Gibbons has been able to count on regularly in tight situations.

When your fastball is topping out in the high-90s, it usually makes you a valuable commodity.

So it was an interesting study when Osuna was called into Sunday's game against the Texas Rangers at Rogers Centre, a tight affair with the Blue Jays holding a one-run lead heading into the eighth inning.

And rather than consistently try to overpower a good-hitting Rangers team, Osuna and catcher Russell Martin added just a bit of finesse into the mix and it was enough to blow Texas away.

Sparked by a big solo home run shot by Josh Donaldson in the fourth inning, the Blue Jays (4136) would go on to record a 3-2 victory over the Rangers (38-38) to earn a 2-1 series victory.

The Blue Jays will now welcome the struggling Boston Red Sox into town for a four-game American League East divisional encounter that begins Monday night.

With the Blue Jays clinging to their 3-2 lead in the eighth inning, Gibbons summoned Osuna into the game with runners at first and third and two out in place of Steve Delabar.

Since Brett Cecil was recently relieved of his closer's job after a couple of erratic outings, Gibbons has been relying primarily on Osuna and Delabar in highleverage, end-of-game situations.

And this pickle certainly qualified.

With Texas batter and leadoff hitter Shin-Soo Choo clearly anticipating an Osuna heater, Martin called for a changeup that is becoming a key pitch in the rookie's arsenal.

Choo could only gaze at the 83mile-an-hour offering that went for a called first strike.

After that, Osuna ramped it up, throwing consecutive 97 mph fastballs, the third low and inside with Choo swinging for the third out.

In the ninth, Osuna was sent back out and fell into some trouble when he allowed a leadoff double to Rougned Odor, but he recovered to get Prince Fielder and Adrian Beltre on back-toback fly-outs.

With Odor now at third, Mitch Moreland stepped into the batter's box, representing the Rangers final hope.

Before the at-bat, Martin traipsed to the mound to discuss strategy with the young hurler, mapping out a game plan that Martin later said worked to perfection.

The first pitch was a high 98 mph fastball that Moreland swung through. The second offering was a sublime changeup for a strike that clearly put Moreland back on his heels.

"And at that point I felt like we had [Moreland] in between," Martin said after the game.

Sensing that, Martin called for another fastball up in the zone from Osuna that Moreland never had a chance on, whiffing by a wide margin for the third out to end the game.

For Osuna, it was his second save of the season that helped make a winner of Drew Hutchison, who did just enough to improve to 8-1 on the season.

Hutchison came into the game leading all Major League Baseball pitchers with 8.27 runs of support per start.

But he showed he can get the job done in tight situations as well, allowing Texas just one run off four hits while striking out eight over 52/3 innings.

Chi Chi Gonzalez got the start for the Rangers and the rookie proved stingy against a potent Toronto attack that came into the game averaging an MLB-best 5.49 runs a game.

Gonzalez was perfect through three innings before Donaldson broke up the monotony, working the count full before stroking his 18th home run over the fence in left field.

Toronto's first hit put the Blue Jays in front 1-0.

The Blue Jays tagged on two more in the fifth, the first run cashed by a double by Devon Travis that scored Ezequiel Carrera all the way from first. Travis soon followed after a single by Jose Reyes.

Texas got on the board in the sixth when Fielder scored from third on a single by Elvis Andrus that spelled the end of the night for Hutchison.

The Rangers cut Toronto's lead to one in the seventh when the Blue Jays could not execute what would have been an inning-ending double play with the bases loaded that allowed Choo to cross.

The Blue Jays are a team that normally wins big and Sunday's triumph was just the third time this year they have been triumphant when scoring three runs or less. It was their ninth one-run victory in 77 games.

For Osuna, he became the first Toronto pitcher to record a save after working more than one inning since Casey Janssen back in 2012.

Associated Graphic

Ezequiel Carrera of the Toronto Blue Jays dives for the ball in Sunday's game against the Texas Rangers in Toronto.

TOM SZCZERBOWSKI/GETTY IMAGES

Blue Jays get torn up by Tigers
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Detroit leaps to an early lead and hangs on, largely thanks to pitcher Anibal Sanchez's manhandling of Jays batters
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By ROBERT MACLEOD
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Saturday, July 4, 2015 – Print Edition, Page S3


DETROIT -- Toronto Blue Jays manager John Gibbon spent much of his pregame media bull session discussing the need for a fifth starter as his team headed into the second half of the season.

Judging from Friday's night's follies at Comerica Park against the Detroit Tigers, the Blue Jays problems seem so much deeper than that.

With Anibal Sanchez flirting with throwing his second no-hitter of his career, the Tigers leapt into an early lead and then hung on for dear life, escaping with an 8-6 victory in a bizarre game.

Sanchez was masterful in manhandling the Blue Jays up until the eighth inning where he had a no-hitter going with just two measly walks.

There, with his team leading 8-0, it all began to unravel, starting with Ezequiel Carrera, who broke up the no-hit bid when he lined a 2-2 pitch into left field with one out.

It was the first of three consecutive hits, which accounted for Toronto's first run and resulted in Sanchez getting yanked. Sanchez was charged with three runs off four hits over 71/3 innings to improve his record to 7-7.

Toronto's Drew Hutchison ("8-2), who continued with his struggles pitching on the road, absorbed the loss, getting stung for seven of the Detroit runs off 10 hits in 42/3 innings.

With Sanchez disposed, the Blue Jays' high-potent offence clicked into top gear with Josh Donaldson poking a two-run double off reliever Alex Wilson to bring the score to 8-3.

Toronto loaded the bases with two out for Dioner Navarro, who came through with a bases-clearing double to the gap in rightcentre that trimmed Detroit's lead to 8-6.

The crowd of close to 40,000, on the edge of their seats only minutes earlier at the prospect of witnessing a no-hitter, were suddenly feely somewhat antsy.

Detroit closer Joakim Soria helped sooth the jagged nerves, coming on in the ninth to record his 18th save of the season.

The Blue Jays made it all that much easier for the Tigers to succeed, committing three errors along the way.

Carrera committed two of them, both throwing errors from leftfield in an embarrassing five-run Detroit fourth inning that opened the door for the Tigers, putting them up 6-0.

Devon Travis recorded the other error in the fifth that allowed another Detroit runner to cross as the Blue Jays lost their fourth game in the past five.

The Blue Jays hit the halfway mark of the season on Thursday, a truculent run that has seen them keep pace in the American League East despite obvious pitching imperfections.

And while a 42-40 record after 82 games is not too shabby all things considered, Gibbons is enough of a realist to know that a similar record over the second half will not be enough to halt the team's 21-year playoff drought.

"I like it. I like the feeling out there," Gibbons said when asked before the game for his first half assessment.

"But yeah, it's going to take a better [second] half than that to win this thing, no doubt."

The lack of a reliable fifth starter in the rotation continues to be Toronto's Achilles heel. The latest implosion of a No. 5 was witnessed Thursday night in Toronto when Matt Boyd, in his second spot start of the year, blew up real good.

Boyd allowed seven runs, all earned, without recording an out in the first inning.

For his effort, Boyd was demoted back to Triple-A Buffalo after the game, while reliever Todd Redmond was designated for assignment.

Pitchers Ryan Tepera and Felix Doubront were called up and were in uniform for Friday's game.

The Blue Jays are in need of a starter the next time the fifth hole rolls around, which will be Tuesday against the White Sox in Chicago, where Toronto's 10game road journey will take them after Detroit.

Gibbons hinted that Doubront, a serviceable pitcher with the Boston Red Sox in 2012 and 2013, during which he won a combined 22 games, could get the start if his arm doesn't get tapped out in the bullpen in the meantime.

Toronto general manager Alex Anthopoulos is out beating the bushes in an effort to land the Blue Jays another starter before the non-waiver trade deadline rolls around at the end of this month.

And that makes Gibbons happy.

"I know he's hunting, like a lot of guys are hunting out there," Gibbons said.

Associated Graphic

Detroit Tigers starting pitcher Anibal Sanchez winds up to deliver a pitch in the first inning against the Toronto Blue Jays at Comerica Park in Detroit on Friday. He took a no-hitter into the eighth.

RICK OSENTOSKI/USA TODAY SPORTS

Shaman Ghost leads Queen's Plate class
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Stronach three-year-old wins battle of favourites against Danish Dynaformer, now aims for Prince of Wales and Breeders' Stakes
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By DAN RALPH
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The Canadian Press
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Monday, July 6, 2015 – Print Edition, Page S3


TORONTO -- It took seven years but Brian Lynch finally earned his Queen's Plate redemption.

Shaman Ghost rallied to capture the $1-million race Sunday at Woodbine Racetrack. The threeyear-old chestnut finished 11/4-lengths ahead of Danish Dynaformer in a battle of the two race favourites, delighting an overflow crowd that produced a record handle of $11.06-million, breaking the 2013 mark of $9.7-million.

In 2008, Lynch could only look in disappointment as Ginger Brew finished second by a head to Not Bourbon, earning legendary trainer Roger Attfield a record-tying eighth Plate victory.

On Sunday, Lynch not only celebrated winning the first jewel of the Canadian Triple Crown for the first time, but forced Attfield to wait another year for the historic win.

"I still wake up thinking of Not Bourbon ... and I look at that photo finish and I still think I won that, so it's justice. Well, it's racing," Lynch said. "I've been beat by a nose one day and I walked away from here like I was carrying the weight of the world but now I feel I'm on top of the world.

"It's a prestigious race, it's an old, traditional race, it's a classic distance at a mile and a quarter, it's a big field and to do it for Frank and Mrs. Stronach, that's just fantastic."

Attfield had two horses in the race as Billy's Star led Danish Dynaformer late before finishing fourth.

"They both were excellent but they got beat by the horse I was worried about," Attfield said.

Jockey Patrick Husbands, who rode filly Lexie Lou to victory in last year's race, settled for second aboard Danish Dynaformer.

Jockey Rafael Hernandez, in his first Plate mount, led Shaman Ghost from fourth in the straightaway. They took an outside line to move past Billy's Star, Danish Dynaformer and Breaking Lucky en route to a fourth successive victory - all coming after his blinkers were removed - and fourth win in five races this year.

The $600,000 payday more than quadrupled his career earnings to over $749,000.

"He [Danish Dynaformer] made a move too early, I let him pass me," Hernandez said. "I know my horse always got a kick ... he made his kick down the lane and we got them back."

Heady stuff, indeed, considering Shaman Ghost had two fourths and a sixth-place finish in his first three races as a two-yearold.

"He was never a precocious two-year-old, he was a slow learner," Lynch said. "When he first started going to school he had to sit at the back of the bus, he wasn't the smartest.

"He always showed he was talented but it took him a few starts to get it together. He seems like he's the ultimate professional now. He's settled, he's got a turn of foot, he does everything right."

The Plate win was the third for owner-breeder Stronach Stables but first since Awesome Again in 1997. Basqueian earned Stronach its first victory in 1994.

"It's exciting ... maybe the first one is the most exciting one but it's nice to win a race like that," Frank Stronach said. "No matter how good the horse is you always need a little luck.

"Shaman is a holy man and the Holy Ghost so I prayed to heaven [for] a little help from them."

Shaman Ghost won the 11/4-mile race in 2:03.45 with Conquest Boogaloo finishing third. Shaman Ghost paid $8.60, $5 and $3.20 while Danish Dynaformer returned $4.30 and $3. Conquest Boogaloo paid $3.90.

The remainder of the field, in order of finish: Breaking Lucky; Oakton; Ault; Ami' Flatter; Easy Indygo; Bear At Last; Portree; Sweet Grass Creek; and Academic.

Milwaukee Mist was a prerace scratch.

After Shaman Ghost captured the Grade III Marine Stakes on May 16, Lynch opted to skip the Plate Trial to ensure having a fresher horse for Sunday's race.

Shaman Ghost certainly didn't look taxed after Sunday's win and Lynch said the plan is for the horse to run in both remaining legs of the Triple Crown, the $500,000 Prince of Wales Stakes on July 28 at Fort Erie Racetrack and $500,000 Breeders' Stakes on Aug. 18 at Woodbine.

"We have some gas in the tank for the Prince of Wales and then on to the Breeders'," Lynch said.

Associated Graphic

Jockey Rafael Hernandez rides Shaman Ghost, in red, to win the 156th running of the Queen's Plate on Sunday.

FRANK GUNN/THE CANADIAN PRESS

Bosox dismantle Estrada to top Jays
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Boston constructs a quick lead and holds off a late Toronto charge to win the second matchup of the four-game series
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By ROBERT MACLEOD
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Wednesday, July 1, 2015 – Print Edition, Page S3


TORONTO -- In his previous two starts, Marco Estrada was the toast of the Toronto Blue Jays, resembling a rogue Dave Stieb as he flirted with near perfection.

For a guy who led all of Major League Baseball last season in home runs surrendered, this was quite a transformation. It would be like Phil Kessel suddenly discovering a rink had two ends and winning the Frank Selke Trophy as the National Hockey League's best defensive forward.

A perfect game broken up in the eighth inning against the Tampa Bay Rays last week after taking a no-hitter that far against the Baltimore Orioles on June 19, and the Estrada legend was building.

You got the sense early on in Toronto's game against the Boston Red Sox Tuesday night at Rogers Centre, however, that Estrada's string of good fortune was up, at least for now.

Boston burst his bubble early and often, constructing a quick lead and holding off a late Toronto charge for a 4-3 victory.

For the Blue Jays (41-38), it was their second consecutive loss to the Sox (36-43).

Estrada's troubles started with his first pitch of the game; the resulting ground ball was bobbled by Devon Travis behind second base for an error. Estrada proceeded to walk four batters in the frame, leading to two of Boston's runs, both unearned.

While Toronto's rotation has performed admirably of late, general manager Alex Anthopoulos has specified that adding another starter is on his to-do list heading into the trade deadline at the end of the month.

Failing that, Anthopoulos said a bullpen arm might also be in order if the Blue Jays are to make a serious charge over the second half of the season and earn a playoff spot that has eluded them since 1993.

Manager John Gibbons agreed pregame on Tuesday that a pitcher, be it a starter or a reliever, would be a nice addition.

"Whoever it might be, if he [Anthopoulos] can get him and he makes us better, you get him," Gibbons said. "Then you adjust off that, whether it's 'pen or rotation, or vice-versa. But I think every team's looking at that."

Gibbons said that is why a pitcher with the skill-set of Aaron Sanchez could become so important should Anthopoulos decide to join the arms race.

Sanchez is currently on the disabled list with a strained right lat muscle, and won't be returning to the lineup until some time after the July 14 All-Star Game.

After impressing in the bullpen a year ago in his first season and eventually taking over the closer's job, Sanchez was pushed into a starting role this year after Marcus Stroman went down with a knee injury in spring training.

After some tentative baby steps, Sanchez started to excel in his new role and was 2-0 in his last three outings before his injury, with a 2.18 earned run average. Contingent on what Anthopoulos does around the trade deadline, Gibbons views Sanchez as somebody who could return either as a starter or a reliever, depending on the need.

"Definitely," Gibbons said when asked if he can foresee a scenario in which Sanchez returns to the bullpen, while noting that he loved the direction he seemed to be heading as a starter.

"But this little setback, it could be just a one-time thing, you think," he said. "Now we've got to build him up. And also, we've looked at the 'pen, see how we can make it stronger. We like the way it's starting to shape up, but you can always make it stronger.

And he's a guy we definitely think can do that."

After falling behind in the first inning, Estrada coughed up solo home run shots to Boston's Jackie Bradley in the second and David Ortiz in the third that put Boston ahead 4-0.

Estrada was gone after 2.1 innings, his shortest outing of the season, his record now 5-4.

Toronto got one back in the fourth and a two-run home run shot by Jose Reyes in the seventh cut the Boston lead to one and provided the pro Blue Jays gathering with some hope.

Boston reliever Koji Uehara quickly doused that, coming on in the ninth to earn his 18th save.

Associated Graphic

Blue Jay Devon Travis makes a throwing error in the first inning against the Boston Red Sox in Toronto on Tuesday.

TOM SZCZERBOWSKI/GETTY IMAGES

Herdman denies rift in camp
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Canada prepares for quarter-final match against England Saturday amid rumours morale is low
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By NEIL DAVIDSON
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The Canadian Press
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Thursday, June 25, 2015 – Print Edition, Page S2


VANCOUVER -- Canadian coach John Herdman, who always has a timely metaphor in his back pocket, reached for the heights Wednesday.

Asked if his players were having fun at the Women's World Cup, Herdman showed a glimpse of his motivational skills.

"You're not meant to have fun," he said with passion. "I mean you climb Everest. It hurts, it's painful. We're now in the death zone where the oxygen's thinner. It's not meant to be fun.

"But when we look back, that's when we'll reflect and go, 'Wow, what an achievement, what we've done for our country.' " Canada plays England in the quarter-finals Saturday at BC Place Stadium, knowing it is just two victories away from the World Cup final.

Herdman has used the same "hard climb to the summit" comparison with his players.

"This is where a lot of people fail and fall," veteran goalkeeper Karina LeBlanc said.

"We know that the end is there, but that's not what we're staring at. We're staring at what we're doing today. What are we doing today to be better tomorrow than we are today. Each day improving and making sure we continue the climb and not fall off."

Canada may be in the death zone but, according to Herdman, it can savour the clarity of the task at hand in the tournament knockout round - only a win will do.

Herdman welcomes that simplicity, especially since eighthranked Canada is no longer playing teams below it in the standings where wins are expected.

Sixth-ranked England is the next hurdle.

"England are a very good team and I know my team loves rising to those sort of challenges. It's going to be great," Herdman said.

The pressure remains, "but it just feels different," he added.

"It's almost like you can see the summit, you can actually see it now. And the players have got an absolute focus that it's not falling off the cliff any more, if you know what I'm saying.

You're not looking to fall off the cliff. It's about there it is, we've got to get there and you've got to push through that and do anything it takes to do it."

On Wednesday, continuing the climb meant dealing with the suggestion that all was not well at the Canadian base camp.

Veteran defender Carmelina Moscato dismissed comments attributed to her that Canadian morale was poor and that some players were upset at Herdman's starting lineup selection.

Former Canadian international Christine Latham, now working as a TV analyst, made the comments - citing Moscato by name as the source - prior to the Fox TV broadcast of the CanadaSwitzerland game.

Moscato rebutted the comments after practice Wednesday, saying Latham - while a friend - had misrepresented her words.

Moscato said morale was excellent, a view echoed by Herdman.

"You just look at the goal celebration ... Every goal we've scored, the player goes to the bench and you look at the passion and the spirit and the connectedness of the players that aren't playing," he said.

Captain Christine Sinclair also pointed to the team's joyous goal celebrations as proof of the team's cohesion.

"I think some people are trying to create stories, they're trying to fish for some stories," she said. "This is the tightest team I've ever been a part of - players and staff. The way we celebrate goals, that's how we are as a team on and off the field."

Herdman said he had no issue with Moscato, saying she was a team leader with "unbelievable integrity."

"We're very comfortable with where the group is and I think you'll see that passion and energy from everyone on the weekend."

Associated Graphic

'It's not meant to be fun,' Canada coach John Herdman said on Wednesday, when his team worked out in Vancouver.

DARRYL DYCK/THE CANADIAN PRESS

Friday, June 26, 2015 Friday, June 26, 2015

England's error sends Japan to final
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Shocking goal on own net relegates Lionesses to bronze-medal match against Germany
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By SHANE JONES
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The Canadian Press
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Thursday, July 2, 2015 – Print Edition, Page S2


EDMONTON -- Laura Bassett's own goal in the 92nd minute proved to be the heartbreaker as Japan punched its ticket through to the Women's World Cup final with a dramatic 2-1 victory over England on Wednesday.

Fourth-ranked Japan, the defending champion from the 2011 World Cup in Germany and silver medallists at the 2012 London Olympics, will meet the United States in the gold medal match on Sunday in Vancouver.

It was actually the first time Japan has defeated England in a major international tourney, having lost 2-0 to England in the group stage at the 2011 Women's World Cup, Japan's last loss in the tournament.

Sixth-ranked England had a very good early opportunity, as Jodie Taylor shot just wide of the Japanese net and outstretched goalie Ayumi Kaihori in the opening minute.

Japan was awarded a penalty kick as English defender Claire Rafferty made a major mistake in shoving Saori Ariyoshi from behind on her way to the net.

Aya Miyama took the penalty kick and made no mistake in scoring her second goal of the tournament at the 33rd minute to make it 1-0 for Japan.

However, England got a penalty kick call of its own soon afterward in the 40th minute when Yuki Ogimi was flagged for impeding Steph Houghton - a call that did not please the Japanese fans in attendance as Houghton appeared to have taken a dive on the play. Fara Williams took the shot and outguessed Kaihori to knot the game 1-1.

England came very close to taking the lead in the 63rd minute, but Toni Duggan rang a shot off the crossbar. The Lionesses nearly struck again a couple of minutes later on a corner kick, but Jill Scott headed the ball just wide.

The game appeared to be headed to extra time, but a long Japanese cross in the 92nd minute hit Bassett's foot and deflected off the post and in, although it took the new goal-line technology to declare it a goal and give Japan the victory.

Japan has now won nine consecutive World Cup games dating back to 2011 and is the only team in this year's tournament to win all of its games outright.

The Canada World Cup marks the furthest the English women's team has ever advanced in the tourney.

England will remain in Edmonton to face Germany in the bronze medal game on Saturday.

Associated Graphic

Laura Bassett, left, tangles with Yuki Ogimi in semi-final action on Wednesday.

JEFF MCINTOSH/THE CANADIAN PRESS

ON DECK
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By ROBERT MACLEOD
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Friday, July 3, 2015 – Print Edition, Page S2


One reason to dislike the Pan Am Games, at least if you are a Blue Jays fan, will be the dearth of pro baseball in Toronto while the festival slams into the city. That is the main reason the American League team is vacating Toronto for 15 of its next 18 games, beginning Friday night in Detroit with the first of a three-game set against the Tigers. The series opens a 10game trip for the Jays, who will also be in Chicago to face the White Sox and Kansas City to play the Royals. That will take them into the All-Star break. After that, the Blue Jays are on the road for another six games, beginning July 21 with a series in Oakland against the A's. Toronto starter Drew Hutchison, who will be on the mound for Friday's game in Detroit, is 6-1 at Rogers Centre this season with a 2.12 earnedrun average. But on the road, he has been brutal. Despite a 2-0 record, his ERA shoots up to 8.92. However, Hutchison has benefited from a Toronto offence that always seems to be churning when he starts.

The Blue Jays have averaged seven runs in games in which Hutchison has been on the mound, the top mark among all starters.

The Blue Jays announced Thursday they have signed international free agent Vladimir Guerrero Jr., the son of former Montreal Expos star Vladimir Guerrero. Guerrero, who is 16, was born in Montreal and is a Canadian citizen.

He is a right-handed-hitting outfielder.

All games at Comerica Park.

Friday, 7:08 p.m. (ET): Detroit RHP Anibal Sanchez (6-7, 4.63) vs. Toronto RHP Drew Hutchison (8-1, 4.99).

Saturday, 1:08 p.m. (ET): Detroit LHP David Price (7-2, 2.62) vs. Toronto RHP R.A.

Dickey (3-8, 4.85).

Sunday, 1:08 p.m. (ET): Detroit RHP Justin Verlander (1-0, 5.09) vs. Toronto RHP Marco Estrada (5-4, 3.58).

Globe Investor July/August 2015
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Friday, June 26, 2015 – Print Edition, Page P1


Welcome to Globe Investor a special section of Report on Business magazine. Our goal is to reveal the forces that are moving markets and show you how to take advantage of them in your own portfolio. In this debut issue, we've tapped The Globe and Mail's reporters across Canada and around the world to explore some of the hottest topics in investing, from China's soaring share prices to the best way to choose a Canadian bank stock. In the months to come, we will offer new tools and insights both for do-it-yourself investors and for those who simply want a broader sense of where markets are heading next. We welcome your thoughts and suggestions. Drop us a line at globeinvestormag@globeandmail.com and let us know your most pressing portfolio questions.

FEATURES

BYE-BYE BOOMERS

Why a next-generation portfolio makes sense

UNDER THE RADAR

The secret to picking bank stocks

BEAUTIFUL BUBBLE

Inside China's surging share prices

CAR CLASH

Is Tesla still a buy?

TRADE SECRET

Stephen Poloz's favourite indicator

RISING STAR

How hedge fund manager Hanif Mamdani thrives in down markets

Boomers and the bust in vacation land
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By TAMSIN MCMAHON
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Saturday, July 4, 2015 – Print Edition, Page B4


Peter Freed is sitting in the back of a golf cart that's trundling across his Doug Carrick-designed championship golf course set against the dramatic rolling hills of Muskoka, a region more than one major travel magazine has called one of the prettiest places on Earth.

It has been 13 years since Mr. Freed, head of Freed Developments, spread his wings beyond building sleek condos in downtown Toronto and headed north into rural Ontario.

He purchased 850 acres of wilderness near Gravenhurst from five different owners to create Muskoka Bay, a community of up to 1,000 luxury cabins along an 18-hole golf course. The plan was to capitalize on the aging baby boomer demographic, many of whom were thought to be looking to semi-retire on the golf course.

But in the years since Mr. Freed launched his grand plans, he has had to grapple with a number of disappointing realities. Baby boomers haven't materialized as the major force for buyers of vacation homes. Golf course communities have been steadily falling out of favour. Then the global financial crisis hit, crushing demand for recreational homes for years afterward.

Since he launched Muskoka Bay in 2002, Mr. Freed has poured tens of millions of dollars into buying land, building roads and infrastructure. A clubhouse opened in 2009 and the golf course now has 375 members. There are 70-odd homes sprinkled around the course, but much of Muskoka Bay remains the same slice of pristine Canadian Shield that he first set foot on more than a decade ago.

"If I knew what I knew today and I was starting from scratch, I wouldn't do it," he says. "It just takes a lot on all levels. Mentally, emotionally, financially. The works."

Canada's housing market barely blinked in the aftermath of a global financial meltdown, but the same can't be said for the market for vacation properties.

Across the country, recreational property values soared in the mid-2000s in the midst of a speculative boom. Developers flocked to beautiful, but remote, reaches of the country and poured millions into ambitious megaprojects, such as luxury resorts and golf course communities.

Many properties were sold to investors as hotel-resorts with promises of big profits from renting rooms to luxury travellers.

When demand dried up, investors fled, projects collapsed and prices for vacation homes plunged.

More than five years after the economic downturn, industry watchers say Canada's recreational market is only now starting to turn a corner. Properties that have languished on the market are finding new buyers, including foreigners attracted by the falling Canadian dollar.

Still, many also say the boom years are gone for good. To be successful, resorts must start catering to a new type of vacationer, one increasingly abandoning the rustic charms and traditional cottage life of fishing, skiing and golfing for urban-style amenities. Developers can no longer count on property speculators to support their projects. Today's buyers are people actually looking to use their vacation homes, many of whom are more discriminating and far more price-conscious.

The same forces driving renewed interest in vacation properties are putting developers at odds with small town governments keen to expand the tourism lifeline that keeps their economies churning, while protecting the rustic charms that made their communities so desirable in the first place.

Boomers and the bust

The story of the speculative boom and bust in Canada's vacation real estate industry reads much like that of the housing bubble south of the border. In the early and mid-2000s, easy credit, a seemingly insatiable demand for real estate investments and Canada's growing renown as a vacation destination inspired developers and investors to flock to resort communities with dreams of building vacation paradises, many of them offering thousands of homes built around expensive golf courses, ski hills and marinas.

With its reputation for milliondollar cottages owned by Hollywood celebrities and the Toronto business elite, Muskoka was a prime target. Several developers announced plans for resort hotels and vacation communities, many of them aimed at affluent travellers who wouldn't blink at dropping $1,500 a night on a weekend getaway in rural Ontario.

Among the projects was a $750million development called Red Leaves, which included plans for a resort community featuring a golf course, marina, hotel and a village of up to 4,000 homes. Another, called Touchstone Resort, was a $75-million development on a coveted piece of Lake Muskoka waterfront, featuring luxury homes sold as fractional units.

Similar to a time share, fractional ownership allows multiple people to own the same piece of property, which they can each use for a certain number of weeks a year. At the peak of the market, a one-eighth share of the most exclusive four-bedroom villa at Touchstone, entitling the owner to use it six weeks a year, was selling for more than $200,000.

"Before the market turned, we didn't have to do any work," says Muskoka-area realtor Heather Scott. "We were more order takers than we were helping people buy and sell properties. We were just writing deals."

On the West Coast, developers rushed into communities popular with wealthy Vancouverites and oil-rich Albertans. In the mountain resort city of Kelowna, B.C., builders erected luxury townhouses with granite counter tops and high-end appliances, with price tags to match. There were ambitious plans too in Ucluelet, on Vancouver Island's west coast, to transform a former wartime ammunition dump into a $600million resort called Wyndansea, featuring 2,000 homes and a golf course designed by Jack Nicklaus.

"I probably wouldn't build a golf course in Ucluelet," says real estate broker Alan Johnson, vicepresident of Specialized Assets, a division of Jones Lang LaSalle. "It rains 290 days a year. The winds are horrific."

When Wyndansea filed for bankruptcy last December, it owed creditors more than $100million and was on the market for less than $8-million. ("Mr. Johnson recently sold it to a Vancouver developer. The purchase price was not disclosed.) At Touchstone in Muskoka, units that had been on the market for $200,000 years earlier were being auctioned off in 2013 for $30,000. The Red Leaves resort development went into receivership amid $40-million in cost overruns.

There were simply too many high-end properties being built for the country's small and highly seasonal vacation-home market to absorb, Mr. Johnson says.

Many were built to appeal to investors, rather than actual vacationers, says Chris Fair of Resonance Consultancy, who does market research and branding for resort communities. That meant a glut of bachelor and onebedroom vacation condos, not the three- and four-bedroom homes many families wanted.

Developers also discovered that building in the unsullied Canadian wilderness is not like building in the cities and suburbs, where most of the costly infrastructure already exists. It can take decades for a rural resort mega-project to turn a profit given that developers typically have to pour tens of millions into cutting down trees and blasting through rock to build roads and sewers and water treatment plants, all before they sell a single unit.

"No one has made that work, ever," Mr. Freed says. "So when you look at a market with something that has never worked, I guess you have to ask yourself why you did it in the first place."

Lenders and investors also shoulder some of the blame.

Many were far too willing to lend huge sums to large projects in areas that couldn't attract enough immediate demand to justify the cost.

"I've done a lot of foreclosure work for a lot of the big banks and secondary lenders," Mr. Johnson says. "You look at how much money some of these projects have lost and I shake my head and go: A lot of these were bad ideas."

Year of the resort rebound

After seven years with virtually no new recreational property development across North America, many say the market is finally starting to turn.

Rock-bottom interest rates have made second homes more affordable. The falling loonie is encouraging Canadians to cash out of vacation homes they bought in the United States and buy something closer to home, leading to bidding wars for some properties in Muskoka. "That's actually a pretty big deal in our market," Ms. Scott says. "We don't see asking price or multiple offers very often."

In Whistler, B.C., a vacation home sold for $10-million in May, the highest sale price since 2008.

The ski resort town, north of Vancouver, is home to Canada's most expensive listed vacation property, a 9,000-square-foot mansion on the market for $22-million.

Revenue per room at Canadian resorts, an important financial measure for the hospitality industry, is up 8 per cent this year, says Bill Stone of brokerage CBRE Inc.

Average nightly rates are up 5.5 per cent.

"Leisure travellers, especially on the resort side, are willing to pay today," Mr. Stone says. "That's a fundamental change."

Lenders and investors are also coming back into the fray. By the end of March, the level of investment in Canadian resorts was triple what it was a year earlier, he says. "I'm calling 2015 the year of the resort rebound in the capital markets," Mr. Fair says. "It really is the first year we're starting to see significant investments from private equity funds and others that are coming back into the resort market."

But lenders remain far more cautious than in the past. Many are still reluctant to bankroll large recreational condominium and resort-hotel projects, particularly those far from major cities, preferring smaller developments of single-family homes and townhouses, which can be built and sold one at a time depending on demand.

Chinese buyers

Increasingly, demand for Canada's recreational properties is being driven by a relatively new force: Chinese tourists.

B.C. has long been a popular destination for Chinese tourists, but visitors from mainland China are now venturing farther afield in search of a more authentic Canadian experience. Organized tours are becoming popular, Mr. Johnson says, often featuring a visit to a farm or winery in the Okanagan, a day of fishing and a night at a lodge on Vancouver Island with a traditional Chinese dinner incorporating local Canadian ingredients.

Chinese investors are picking up on the trend, fuelling demand for resorts, hotels and marinas in smaller communities such as Richmond and Kelowna to cater to Chinese tourists. Mr. Johnson has sold several B.C. resorts, marinas, farms and private islands to Chinese buyers.

"The Chinese buyers see things that we don't see," he says. "In Canada, our development horizon tends to be three-to-five years. Chinese buyers will say back home in China we do 40year deals. It's a legacy property that a company would have for a long time."

Often Chinese investors are looking at the soaring cost of buying and renting out a home in Vancouver's overheated market and opting to buy waterfront resort projects instead. That has driven up the prices of properties in some regions that historically were never popular tourist destinations. "I look at some of the prices that are being paid and I think they're being very aggressive," Mr. Johnson says.

Urban resort trend

Beyond foreign investors, Canada's recreational market is changing in fundamental ways. For the most part, the real estate speculators are gone. Today the market for vacation homes is being driven primarily by people who actually want to use their properties, not rent them out for extra income.

Many developers are also abandoning their original focus on the baby boom market and targeting young families instead. "We're actually quite surprised to see that in fact millennials aspire to own a vacation home more than any other demographic," says Mr.

Fair, who surveys prospective buyers.

Younger Canadians have far different tastes than previous generations. For one, they're much more willing to travel farther for the ultimate vacation experience.

They are also eschewing traditional rustic cabins built around such time-honoured Canadian pastimes as fishing, skiing and golf in favour of modern architecture built around urban-style amenities, such as shops, bars and restaurants. Walkability, a major force driving urban redevelopment, is starting to matter to resort developers, Mr. Fair says.

He predicts the next trend will be "urban resorts" - developments in major cities aimed at vacation home buyers.

Such trends don't bode well for many Canadian resort communities. Shifting vacation preferences have already dealt a devastating blow to several smaller bed and breakfasts, guest ranches and fishing resorts in B.C., Mr. Johnson says. Smaller operations in out-of-the-way locales are struggling to turn a profit. He estimates 70 to 80 per cent of the province's coastal fishing resorts have shut down in recent years.

Mr. Johnson chalks it up to several factors. House prices have soared in many markets, making it difficult for homeowners saddled with huge mortgages to afford a second property or a costly trip to a high-end resort. High gas prices have made RV road trips less appealing.

Vacationers today also have far more options than they did in the past. "Everybody worries about airline travel," he says. "But I can go to Hawaii for $400 return. For me to fly to Anahim Lake [a remote B.C. community] to go to a guest ranch, it's $700 return."

Muskoka and myth

John Klinck bristles at the notion that Muskoka is seen by many as a Hamptons of the North.

"There's the myth and then there's the reality of Muskoka," says the chair of the local regional government, the District Municipality of Muskoka. "We would rather be viewed for what we are and not this misconception that this is the land of the rich and famous."

While Muskoka remains the playground of wealthy cottagers, the vacation property bust reverberated deeply through the region.

The slowdown in new development trickled down through Muskoka's economy, where many residents make a living in construction, home renovation and tourism services. Since roughly 2009, social assistance usage has been rising faster in this region of 65,000 residents than anywhere else in the province over the past several years, local officials say.

"We have far too many children leaving because of the absence of opportunity," Mr. Klinck says.

So signs of a potential rebound in the resort sector are welcome news. Older resorts, many built around renting rustic cabins, are looking to sell or redevelop to cater to a younger, more amenityfocused demographic. Projects like Peter Freed's Muskoka Bay are looking to expand, while those like Touchstone Resort have found new owners who are working to revive moribund development plans.

Local officials say they are open to supporting new development plans. "Our attitude is how can we make it happen," Mr. Klinck says, "because we've got to strike while the iron is hot."

Yet they are also keen to avoid the mistakes of the past by rebuilding the region's tourism industry in a way that can bring more year-round traffic and more services and stable employment for local residents.

Opposition from local residents and established cottagers has made it all but impossible to create any new resorts and marinas along the region's coveted lakefronts, so the municipality is focused on preserving the existing commercial developments along its shorelines, making it difficult for developers to create purely residential developments on the waterfront.

To prevent any more waterfront from being turned into yet another private enclave of wealthy summer residents, local zoning requires that all new waterfront development contain some rental accommodation. That is forcing developers back into the hotelresort model, which requires buyers to rent out their summer homes for at least part of the year.

Not surprisingly, some developers are fighting back against requirements to build such products, which proved disastrous to many during the last vacation property downturn.

"Something about me as a capitalist is against it," says Gil Blutrich, head of Skyline International Development, which owns several resorts in Ontario. "I'm buying real estate and now you're telling me that I need to take my suitcase and take my kids and leave because some planner had a vision? It created a situation where you were completely dependent on the financial performance of the hotel."

Mr. Blutrich profited handsomely from the downturn in the vacation sector, scooping up resorts north of Toronto at a fraction of what they had cost only years earlier. He purchased the centuryold Deerhurst Resort in Muskoka in 2011 for $26-million only a year after the previous owners poured nearly $90-million into upgrades ahead of hosting a G8 summit.

He recently put Deerhurst back on the market to help finance a $500-million resort community development he is proposing to build on adjacent land. ("Skyline is reportedly asking $55-million for the resort.) Local officials have been amenable to his Deerhurst development plans, Mr. Blutrich says, but he has run into stiff resistance for a grandiose masterplanned resort community he's proposing on land Skyline purchased in 2006 from Canadian Pacific Railway in Port McNicoll, a former industrial community on the shores of Georgian Bay.

So far he has sold 60 waterfront lots, pocketing three times what he paid for the entire site, but in the nine years he's owned the property he has yet to get approvals for a single building.

"At one end you're pouring money in," he says. "But if you have nothing to sell there is a limit of how much my shareholders can wait and say let's continue to pour money into this."

The long game

More than a decade into his Muskoka odyssey, Mr. Freed is circumspect about his future plans.

It may take another 10 years, he says, before his Muskoka Bay golf course reaches its desired 700 members, up from roughly 375 today. He recently formed a partnership with a group of Canadian investors who purchased the struggling Touchstone Resort in 2013 and is rebranding the two properties under the name Freed Resort Communities.

Mr. Freed will manage and develop Touchstone, where he is planning to build a new dockside restaurant and another 66 units on the property, and guests at both resorts can share amenities.

He's also planning a new condo development at Muskoka Bay.

But far from his original vision of 1,000 homes, Mr. Freed says he'll be happy to sell 25 or 35 homes a year in Muskoka.

"It feels like there's just so much potential here that's just starting to show itself," he says. "But you certainly need a long-term view.

Any developer who thinks they can come in here and sell 100 homes or 200 homes and be in and out in two or three years, I hate to say it, but they'd be out to lunch."

Associated Graphic

Robert McLaughlin, left, president of MIST Opportunities, looks out from the Touchstone boathouse on Lake Muskoka with Peter Freed of Freed Developments.

FRED LUM/THE GLOBE AND MAIL

JOHN SOPINSKI/THE GLOBE AND MAIL SOURCE: REMAX

Muskoka Bay in Gravenhurst, Ont., has swallowed a lot of Freed Developments' capital.

FRED LUM/THE GLOBE AND MAIL

There's an infinity pool at the Muskoka Bay Club, but not a lot of people around to use it.

FRED LUM/THE GLOBE AND MAIL

The Muskoka Lakes has been described as one of the most beautiful places on earth.

JAMES MACDONALD/BLOOMBERG

The $600-million Wyndansea Oceanfront Golf Resort in Ucluelet, B.C., filed for bankruptcy last December.

Winter's economic chill likely seeped into April
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By DAVID PARKINSON
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Monday, June 29, 2015 – Print Edition, Page B2


Anyone who has spent a few years in Canada is well aware that at the end of the long and hard winter, you can't expect spring to just burst out in full bloom in April. We'll find out this week if the same goes for Canada's economy.

Statistics Canada reports the country's gross domestic product for April on Tuesday, a key update on the state of an economy that is coming off three straight months of contraction.

March's 0.2-per-cent decline in GDP capped a dismal winter, in which the Canadian economy was stalled by harsh weather, a slowdown in its critical U.S. market and a severe oil price shock that crippled one of the country's biggest industries and hamstrung some it its key regions.

Observers are looking for something better from April, with the worst of the winter past, the U.S. port disputes resolved and oil prices in recovery by that time.

But the mixed bag of economic indicators for the month that have come out in recent weeks suggest that some of the weakness of the first quarter has spilled into the second quarter.

Most economists estimate that the Canadian economy grew by about 0.1 per cent to 0.2 per cent in April. While that would be the first monthly growth since December, it would, at best, merely make back what the economy lost in March. This anticipated tepid start to the second quarter has many forecasters now predicting GDP growth of less than 1 per cent annualized for the quarter as a whole (which ends June 30) - a far-from-convincing turnaround from the economy's bleak 0.6-per-cent annualized contraction in the first quarter.

There's little margin for disappointment in the numbers before we could be facing a second consecutive quarterly GDP decline - the traditional technical definition of a recession.

"GDP numbers are usually market movers, but this one is special," said Benjamin Tal, deputy chief economist at CIBC World Markets, in a research note last week. "A negative number, and people will start whispering the R-word while aggressively pricing in another rate cut by the Bank of Canada. And while the market expects a better number, there is little conviction behind that consensus."

Hopes for a more substantial rebound have been chilled by disappointments in three key April economic indicators: retail sales, manufacturing and trade.

Retail sales fell 0.1 per cent in April from March, a slowdown that caught the markets by surprise after the retail sector had been building momentum as the winter progressed. In volume terms, once price changes were removed, retail sales looked even worse in the month, off 0.2 per cent.

Manufacturing, a sector that had been expected to be a leader in Canada's economic recovery this year, instead extended its early-year stumbles in April, with sales slumping 2.1 per cent from March. And the country posted a $3-billion trade deficit in the month, its second-biggest in history (exceeded only by March's $3.9-billion shortfall), amid the fourth straight monthly decline for exports - another economic segment expected to do the heavy lifting this year. April's export declines had nothing to do with the beleaguered oil and gas sector: Non-energy exports slipped 0.9 per cent in the month, even as energy exports recovered modestly.

In a press conference this month, Bank of Canada Governor Stephen Poloz cautioned that the factors that dragged the economy down in the first quarter almost certainly didn't disappear just because the calendar flipped over to April.

"This horrible winter that we had didn't end on March 31.

There may be weather effects throughout the data that go longer, possibly into the second quarter," he said.

In addition, some of the largescale retooling shutdowns in the first quarter in the auto sector - which accounts for a large portion of Canada's manufacturing and exports - continued into the second quarter, and likely contributed to April's sluggish manufacturing and trade data. With those plants now up and running again, the auto sector could rebound in subsequent months.

And not all the news has been bad in April's economic indicators. Wholesale sales surged 1.9 per cent from March, much more than experts had estimated. And Statscan's Survey of Employment, Payrolls and Hours - the statistical agency's most thorough monthly labour market survey, released last week - indicated that the country's employers added a solid, if unspectacular, 16,000 jobs in the month.

Meanwhile, the improvement in oil prices in April should provide a source of strength in the GDP numbers. The energy sector accounts for close to 10 per cent of GDP, and it showed signs of turning a corner: Energy exports rose nearly 6 per cent on a seasonally adjusted basis from March, their biggest monthly gain in nearly a year.

However, economists warn, a modest improvement in oil prices doesn't signal, by any stretch, that the oil shock is now in the Canadian economy's rearview mirror.

"This hasn't improved the sombre mood of producers, who still plan to slash jobs and investment in the oil sands by 30 per cent to 40 per cent this year," noted Capital Economics economist David Madani. "With the hit from falling energy investment only just over a quarter done, it's clear that this downturn is far from over."

Associated Graphic

CARRIE COCKBURN / THE GLOBE AND MAIL SOURCE: STATISTICS CANADA

CARRIE COCKBURN / THE GLOBE AND MAIL SOURCE: STATISTICS CANADA

Manulife looks to cash in with new bank machine network
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By JACQUELINE NELSON
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Monday, July 6, 2015 – Print Edition, Page B1


Financial Services

Manulife Financial Corp.'s banking subsidiary is hitting the streets, rolling out a fleet of 830 bank machines across the country.

Manulife Bank's new automated banking machines (ABMs) will be installed in Alimentation CoucheTard Inc.'s stores - including Mac's and Circle K - in nine provinces and territories by the end of September. The ABMs are designed to dispense cash to customers, but Manulife expects to add other services in the future.

Canadian lenders are increasingly catering to a customer base that demands access to banking in locations and at times that are convenient. New mobile banking technology and reshaped branch networks are part of that trend. At Manulife, customers were asking for more access to their funds, according to Rick Lunny, chief executive officer of Manulife Bank of Canada. "This is all about offering convenient banking near where our customers live and work," he said in a statement.

Until now, Manulife had just 12 of its own ABMs. With $22-billion of assets, Manulife Bank remains well outside the top players in the country. Manulife founded its bank in 1993 with the merger of three Canadian trust companies.

The next year, the branch network was sold off, shifting sales of banking products to Manulife's advisers.

To this day, Manulife sees its biggest opportunity in offering niche products that other major lenders don't. Its bestknown product, Manulife One, combines a customer's mortgage and other debt with income and other savings in a single chequing account. For insurance and wealth management-focused Manulife, just 1 per cent of the company's total invested assets are loans to bank clients.

The new web of ABMs are set to arrive at a time when Canadians are increasingly using the Internet to do their banking. More than half say they conduct the majority of their financial transactions online, according to research conducted by the Canadian Bankers Association last year. By comparison, 18 per cent said ABMs were where they did most of their transactions .

But the flight to digital hasn't stopped the number of ABMs in Canada from slowly creeping upward over the past several years. There were nearly 66,000 bank machines connected to the Interac network in 2014, compared with about 58,600 in 2008.

While the country's largest lenders may be the most visible source of automated tellers, fewer than 30 per cent of all ABMs were owned by the Big Six banks and HSBC as of 2014, the CBA data show. The rest are mostly "white label" machines, which are independently owned cash dispensers, sometimes tucked in the back of bars and restaurants.

Manulife's new ABMs will join a group called the Exchange Network, which currently has 2,500 ABMs that support 184 Canadian financial institutions such as credit unions and banks with a smaller presence in the country.

The 4.5 million customers from these participating institutions will be able to withdraw money at Manulife's machines without paying a surcharge, while customers with other major banks can use the machines for a fee. The Exchange Network got its start in the United States, where it supports more than 500,000 ABMs.

Other banks have also reached partnerships with retail merchants to put bank machines where people are shopping. Royal Bank of Canada reached an agreement in 2012 with Shoppers Drug Mart to offer bank accounts that earn Shoppers Optimum reward points. The bank added 300 new RBC ABMs in Shoppers Drug Mart and Pharmaprix stores.

For Manulife, the ABM push comes at a time when the bank is looking to connect with customers after a period of retooling.

"The bank is facing some pretty fierce competition these days," said Marianne Harrison, general manager of Manulife's Canadian division, in a quarterly earnings call with analysts in May. "We have been spending a lot of time on the regulatory front in terms of trying to make sure that the policies and procedures were where they needed to be with some of the changes that have come down."

Some of these changes reduced the amount of risk the bank could take on when approving residential mortgages, which make up most of Manulife Bank's loans. It took a couple of years to rework Manulife Bank's products to offer similar mortgages. With these changes in place, the bank aims to get back into growth mode.

Public infrastructure gap will require a creative solution
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By GLEN HODGSON
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Thursday, July 2, 2015 – Print Edition, Page B2


Economic Insight

After decades of neglect, public infrastructure deserves to be made a much higher economic policy priority. The issue of public investment in infrastructure won't be ignored in the federal election campaign. It is already a hot topic in provincial legislatures and city council chambers across the country, and the overall political commitment to provide financial support must begin to reflect current needs and future opportunities.

Canada has underinvested in its infrastructure for decades, and is now playing catch-up. The Federation of Canadian Municipalities (FCM) has assessed the condition of drinking water, waste water, storm water and road infrastructure across municipalities, based on 2009-10 data. The estimated cost to bring these systems up to a "good" standard is $172-billion.

This high cost does not include public transit investment, nor regional and national infrastructure priorities like border crossings, ports and power distribution. The infrastructure gap can also be seen in the foregone economic potential in regions such as the Canadian North.

Moreover, investment in infrastructure offers a good payback from public spending in terms of its immediate effect on the economy. Since most projects use a relatively small share of imports in their development, most of the GDP gains and jobs benefits are captured domestically.

More often than not, each dollar invested in infrastructure will lift GDP by more than a dollar.

During the 2008-09 financial crisis and recession, federal and provincial governments relied on infrastructure to help support economic activity across Canada - public infrastructure investment shot up to 4.6 per cent of GDP in 2009 and 2010. This share has eroded to below 3.6 per cent.

So if we have a huge infrastructure gap, and infrastructure investment provides strong economic benefits, what's holding us back? One key reason may be "sticker shock" - the scale and cost of public projects funded from current operating budgets.

Another reason is budget limitations. For all three levels of government, vastly expanding the infrastructure budget can crowd out other needs - which can make for very challenging politics.

It's time to put on our thinking caps and develop additional creative approaches to financing infrastructure development in Canada - to treat it as a long-term investment, and shift funding away from current operating budgets. We should be taking advantage of low long-term interest rates while they last to begin funding an ambitious capital investment program.

One idea worth examining is the formation of a pan-Canadian infrastructure bank. It could be modelled broadly on the very successful existing Canadian public sector financial institutions like Export Development Canada. (Disclosure: the author worked at EDC for a decade.)

Creating a pan-Canadian infrastructure bank would create a critical mass of funding capacity and management expertise in one body. Such an institution could be built on an equity capital base that is treated as an investment (and not a current expenditure). It could then multiply that capital base by borrowing in capital markets to build the full lending capacity of the institution.

We would expect the federal government to use its recognized ability to borrow in capital markets - at the lowest possible cost - as a key backstop for the bank.

However, Ottawa need not necessarily be the only shareholder, nor the sole backstop for borrowing. Some provinces, major cities and the private sector could also conceivably participate in such a bank as shareholders or as partners. Infrastructure development is a shared responsibility of all three levels of government. Furthermore, the private sector, including sources of long-term capital like pension funds, could play an important role.

A pan-Canadian infrastructure bank and its shareholder(s) would have to develop a financially sustainable business model.

Some infrastructure projects, such as toll roads, could be commercial in nature and produce a revenue stream to repay the financing. Others would require the continuing support of government borrowers. Moreover, the institution's investment portfolio should reflect necessary adaptation to climate change and the emerging low-carbon economy.

Canada's need for modern public infrastructure will only grow. The pressure on governments to find solutions won't abate either. We need some pan-Canadian innovation and creativity now.

Glen Hodgson is senior vicepresident and chief economist at the Conference Board of Canada.

Associated Graphic

Canada is playing catch-up after decades of underinvestment in infrastructure.

GRAHAM HUGHES FOR THE GLOBE AND MAIL

China tops global list of foreign-investment destinations
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By BRIAN MILNER
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Thursday, June 25, 2015 – Print Edition, Page B1


A sputtering global economy, rising geopolitical risks and a lack of certainty about regulatory, taxation and other policies contributed to a hefty decline in global cross-border investment last year.

But even as slow-growth developed markets become less attractive, money is pouring into emerging countries - notably in Asia - at a record clip, and China has sailed past the United States as the leading destination for foreign capital, the United Nations Conference on Trade and Development (UNCTAD) says in its annual assessment of world investment trends.

It's a trend that is bound to continue as multinationals target higher-growth markets with better demographics and increasing spending power.

While foreign direct investment (FDI) fell 16 per cent last year to $1.2-trillion (U.S.), capital flowing into China and other developing countries reached a record $681billion, up 2 per cent from a year earlier. China alone accounted for $129-billion, an increase of about 4 per cent, the UNCTAD report says.

By contrast, industrial nations saw their share of incoming FDI fall 28 per cent to just under $500-billion. It was their lowest total in 10 years and marked the third successive decline.

Canada slid to seventh place, pulling in $54-billion. That was down from fourth the previous year at $71-billion. But among developed countries, only the U.S. (No. 3) and Britain, which climbed to fourth from ninth, attracted more cross-border cash.

The steep drop in oil and other resource prices was an obvious culprit. But things could have been worse.

Weaker commodity markets have had "some influence" on the amount of investment going into resource-rich countries, James Zhan, UNCTAD's senior director of investment and enterprise, said by e-mail from Geneva. But he added that multinational resource players "have generally maintained their investment plans."

Foreign capital flowing into Canada's energy and mining sector last year fell 38 per cent to $13-billion. But that compares favourably to average annual levels of $11-billion between 2010 and 2012. And the country remained on the radar of U.S. private equity firms and other acquisitors.

Canada ranked 11th in an UNCTAD survey of global executives' favoured destinations for their capital.

The U.S. saw incoming FDI flows plunge 60 per cent in 2014 to $92.4-billion, but not because of any new fears about the health of the world's largest economy. Most of the decline stemmed from a single divestment - the $130-billion sale by Britain's Vodaphone Group of its 45-per-cent stake in Verizon Wireless.

The United States still outpaces the rest of the world when it comes to investing in other people's markets, exceeding secondranked Hong Kong (treated separately from China by UNCTAD) by a wide margin.

FDI from the U.S. climbed 3 per cent to $337-billion. Almost all of the new investment from U.S. multinationals consisted of reinvested earnings.

Developed countries occupy eight of the top dozen rungs, with Canada retaining its hold on seventh place just behind a fading Russia. Third-ranked China is gaining ground here too, edging past Japan as its corporate sector puts more money to work abroad, mainly in resource-related activities.

Canadian investment in other nation's mining and energy assets also picked up last year, climbing to $6.5-billion from a mere $2.5-billion in 2013.

China is not high on the Canadian list of must-have markets.

Canadian direct investment in China (excluding Hong Kong) in 2013 rose 26 per cent from the previous year to $4.9-billion (Canadian), less than half the amount that went into Hungary and Bermuda.

But international providers of a wide range of services are eagerly eyeing China as it shifts its focus toward domestic consumption and away from an export-oriented manufacturing model that has little room for strong growth.

Foreign money earmarked for China's service sector grew to 55 per cent of total inflows in 2014 - mirroring a global trend to increased investment in services as barriers come down. Manufacturing only received 33 per cent, the UNCTAD report found.

In 2011, the first year services in China surpassed manufacturing investment from abroad, total service-related FDI flowing into China totalled 48 per cent.

Associated Graphic

THE GLOBE AND MAIL SOURCE: UNCTAD

K+S says Potash bid fails to reflect firm's value
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By RACHELLE YOUNGLAI
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Friday, July 3, 2015 – Print Edition, Page B1


Energy & Resources

Germany's K+S AG has rejected an $8.7-billion (U.S.) bid from Potash Corp. of Saskatchewan, saying the offer is too low and "completely disregards" the value of its large potash project in Saskatchewan.

Potash Corp., the world's biggest fertilizer producer, is increasingly facing more competition in Canada and abroad. Acquiring K+S would give the Canadian company control over about 30 per cent of the potash market as well as K+S's Legacy project in the prairies, which is to start production next year.

K+S said Potash Corp.'s offer of €41 ($57 Canadian) a share shortchanges its entire business, which includes potash operations in Europe and its position as the world's largest supplier of salt products.

In addition to the price, K+S said its directors are not convinced Potash Corp. would continue operating the German miner's fertilizer and salt businesses in their current form or protect the interests of their 14,000 employees.

"Despite repeated requests to address this question, Potash Corp.'s answers have remained vague," Norbert Steiner, K+S's chief executive, said in a statement.

The rejection could lead Potash Corp. to go hostile and take its offer directly to K+S's shareholders, which the Canadian company has indicated it may do pending a more thorough examination of K+S's operations.

But K+S said it is not about to open up its books to Potash Corp. any time soon.

"You should not forget we are talking about a competitor," K+S's chief financial officer Burkhard Lohr said on a webcast with analysts. "It is tricky to open books and strategies to a competitor," he said.

K+S believes Potash Corp. wants to make the acquisition so that it can cut jobs, shutter some of K+S's higher-cost operations and run its under-utilized mines in Saskatchewan at full tilt.

"In a way, K+S is the ideal problem solver for Potash Corp.," Mr. Steiner said in a posting on K+S's web site. "Potash Corp. sites in Canada produce at significantly lower costs than our German sites. But they are under-utilized.

Obviously it makes ultimately little sense for Potash Corp. to operate our German sites at the current level," he said.

K+S's Legacy project in Saskatchewan is expected to produce about three million tonnes a year, nearly the same size as some of Potash Corp.'s mines in the province. Legacy is expected to exacerbate soft prices and contribute to the glut of potash in the market.

K+S said Legacy is worth at least €21 ($29) a share. When asked what would be a fair offer for the entire company, Mr. Lohr said he was "not willing to give a number."

Mr. Lohr reiterated that K+S would not join Canpotex, the joint venture of Potash Corp. and two North American firms that sells potash outside of the continent.

The European miner plans to sell its Canadian potash to Asia and South America, two of Canpotex's biggest markets.

"We see a good chance to place the material into the market," Mr. Steiner said in an interview with The Globe and Mail. "Customers come up to us and say, why don't you have more material available right now? They are waiting for ... Legacy. This is something that makes us optimistic," he said.

Canpotex and its Russian-Belarussian counterpart used to control 70 per cent of the potash market. They exerted enormous influence over prices. But Canpotex lost some of its power when Russia's Uralkali killed the RussiaBelarus potash cartel.

Potash Corp. has never cut prices to gain market share, a strategy its new CEO Jochen Tilk has said will not change.

Potash Corp. did not respond to a request for comment.

Potash Corp.'s informal offer represents a 40-per-cent premium to K+S's share price before the bid was made public last week. K+S's stock fell 2 per cent to €37.02 Thursday after it rejected the bid.

Goldman Sachs is advising K+S. Goldman advised Potash Corp. when it fended off a hostile bid from BHP Billiton in 2010.

NDP's climate strategy widens rift with industry
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By JEFF LEWIS
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Friday, June 26, 2015 – Print Edition, Page B1


CALGARY -- Energy & Resources

Alberta's plan to increase carbon fees and toughen its climate strategy adds costs and more uncertainty to an industry already struggling to cope with the sharp plunge in oil prices.

The province's new NDP government on Thursday said carbon levies on major polluters would increase to $30 a tonne over two years, up from $15 a tonne under current regulations.

The fee would rise to $20 a tonne starting Jan. 1 next year, and to $30 in 2017. Companies will also be required to reduce emissions by 20 per cent over time, compared with a 12-per-cent target today.

Alberta Environment Minister Shannon Phillips said the government would announce a review of the province's complex royalty regime "shortly," and that it would proceed in "lockstep" with the tougher environmental controls under development.

The prospect of more stringent rules and higher costs deepens a rift between a government that insists change is needed to smooth the way for stalled pipelines, and companies already reeling from the collapse in oil prices.

The downturn has led to thousands of layoffs and dramatically shaved the industry's long-term production outlook.

"Is the fiscal regime more punitive today? Yes," said Michael Dunn, analyst at Calgary's FirstEnergy Capital Corp.

"But the assumption of business has been that an increase such as what was announced was coming," Mr. Dunn continued.

"I think if what they announced was the end of it, then I think the industry would be quite comfortable in dealing with it. But there's going to remain some uncertainty until they finalize all the details and any potential other changes later this year."

The NDP government has moved swiftly on several fronts since taking office this spring, eliminating Alberta's flat income taxes and raising the corporate rate by 20 per cent. Such moves have prompted warnings from some oil and gas producers already struggling to claw back expenses amid the sharp downturn in energy markets.

On Thursday, the Canadian Association of Petroleum Producers, which represents large oil sands players, warned that its members were facing $800-million in added costs over two years because of higher carbon levies and corporate taxes.

The increase in carbon fees comes at a time when the industry is facing "significant competitiveness challenges," a spokeswoman for Canadian Natural Resources Ltd. said.

"We are especially attentive to changes that increase cumulative costs, including changed corporate taxes, costs for carbon, and royalties," Julie Woo said in an e-mail.

The NDP estimates the increased carbon levy would add 30 to 45 cents a barrel to the cost of oil sands production by 2017. But private forecasts have pegged the cost much higher. Under a socalled "double-double" scenario considered by the provincial Tories, fees paid by Canadian Oil Sands Ltd., the majority owner of the Syncrude Canada Ltd. consortium, would "likely quadruple" from current levels to about $1.07 a barrel on an annual basis, according to numbers crunched by Greg Pardy, co-head of global energy research at Royal Bank of Canada.

Still, such an increase is unlikely to "break the bank" for oil sands producers and other companies, he said Thursday in a note to clients, even if it does raise costs.

Energy economist Dave Sawyer said his model shows the new regulations would cost an average of 21 cents a barrel, with a wide variation.

Mr. Sawyer said the industry needs to show investors that it can survive in a low-carbon environment. The market will shrug off the current increase as having little impact on the bottom line, particularly since the higher levy is deductible against royalties and corporate income taxes. He noted that the previous Progressive Conservative governments had been preparing to impose a similar increase in the carbon levy.

Some oil sands companies factor higher carbon fees into project economics. Royal Dutch Shell PLC, for example, tests new projects globally against a carbon price of $40 (U.S.) a tonne, a spokesman said. Others such as Suncor Energy Inc. have pushed for a carbon pricing mechanism that applies to a broader segment of society.

Associated Graphic

THE GLOBE AND MAIL SOURCE: GOVERNMENT OF ALBERTA

Potash power play: Canadian giant aims to bulk up
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Competition has weakened company's dominance
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By RACHELLE YOUNGLAI
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Saturday, June 27, 2015 – Print Edition, Page B1


Potash Corporation of Saskatchewan Inc.'s bid for German competitor K+S AG is a bold step by the world's largest fertilizer producer to reassert its control over potash prices as rivals encroach on its space.

The Canadian miner for years enjoyed a dominant position in the potash market, partly through its marketing arm, Canpotex. But that influence has been weakened as Potash Corp.

faces growing competition at home and abroad, and a glut of fertilizer in the world.

Preferring to market their own product, companies such as K+S do not want to join Canpotex, the joint venture of Potash Corp. and two North American firms that sells potash outside of the continent. Canpotex's clout was diminished when Russia's Uralkali broke up a similar marketing venture two years ago. The two groups used to control 70 per cent of the potash market.

K+S owns the Legacy potash mine under development in Saskatchewan, where Potash Corp.'s biggest mines are located. Acquiring K+S would give the Canadian company control over Legacy and solidify its position as the world's leading producer. Combined, Potash Corp. and K+S would account for about 30 per cent of global production, according to analysts.

By owning K+S, Potash Corp. could shutter key mines as it sees fit, which would take supply out of the global market and allow the Canadian miner to regain some of the power it held over potash prices.

"Controlling K+S's high-cost German mine assets and the Legacy project could give [Potash Corp.] back the influence it seems to have lost," Joel Jackson, an analyst with Bank of Montreal, said in a research note.

K+S's Legacy, which is similar in size to Potash Corp.'s mines in the province, is expected to produce nearly three million tonnes of potash annually after it starts next year. In addition to the new Legacy mine in Saskatchewan, BHP Billiton is mulling whether to complete its large Jansen mine, which would dwarf Potash Corp.'s largest mine with eight million tonnes in annual production. BHP also will not join Canpotex.

Potash Corp.'s world was turned upside down when the Russian-Belarus potash cartel disbanded in 2013. Russia's Uralkali started pushing more potash onto the market at lower prices.

The mineral's price plummeted, giving buyers the upper hand.

Today, Potash Corp. and Uralkali are fetching around $300 (U.S.) a tonne. Before the cartel breakup, Canpotex and the Russian-Belarus venture could get upward of $400.

New sources of supply from Russia's EuroChem and others will also exacerbate the weak market conditions.

Analysts noted that the K+S deal carries risks for Potash Corp.

"We see the transaction as an expensive way to address the current industry overcapacity, where [Potash Corp.] first pays for capacity addition, then pays again for possible reductions," Cowen and Co. said in a research note. The Saskatoon-based miner has indicated it could go hostile, telling K+S's board it may decide to take its offer to shareholders. The deal is worth around 40 ($55) a share and values K+S at nearly 8-billion.

Canaccord Genuity said the deal could help mitigate the soft potash market at the expense of the Canadian miner.

"If it spends $8.6-billion, only to kick the potash supply concern down the road, then it will have possibly spent that money in vain to support the market that has added future supply in the hands of some aggressive producers and it may end up with the same situation that the market is facing in two years," the bank said in a research note.

Potash Corp. will likely face antitrust hurdles should it proceed with its bid, analysts said. In 1997, Potash Corp. tried to buy 51 per cent of K+S, and the Germans blocked it on anti-competitive grounds.

K+S said it is evaluating Potash Corp.'s offer.

Potash Corp. (POT) Close:$38.61, down 72¢

Associated Graphic

THE GLOBE AND MAIL SOURCE: K+S

TransCanada says new emissions standards aid Keystone case
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By SHAWN MCCARTHY
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Wednesday, July 1, 2015 – Print Edition, Page B1


OTTAWA -- Economics Energy & Resources TransCanada Corp. is making another pitch to the Obama administration for approval of the long-delayed Keystone XL pipeline, citing, among other things, the tougher carbon-emission regulations imposed by Alberta's New Democratic government.

The Calgary-based pipeline company has been waiting for a decision for the past five months - since the Nebraska Supreme Court upheld the state's approval of the current route. It has been almost18 months since the U.S.

State Department completed its final environmental impact statement, which concluded the project would not drive up greenhouse gas (GHG) emissions - a conclusion that has been challenged by the Environmental Protection Agency.

In a letter released Tuesday, TransCanada noted recent developments that it says demonstrate Canada is committed to reducing greenhouse gas emissions and further prove that the construction of the pipeline from Alberta to the U.S. Gulf Coast would not "significantly exacerbate" climate change, the test laid down by President Barack Obama.

It pointed to Alberta's decision last week to impose stricter emission standards on the sector. The new NDP government amended existing regulations to require large industrial polluters such as those in the oil sands to cut per-barrel emissions by 20 per cent from 2005 levels - up from 12 per cent. The government also increased the levy from $15 to $30 a tonne of GHG emissions in excess of the regulated limit.

In announcing those changes and plans for a broader climate strategy, Environment Minister Shannon Phillips suggested Alberta would improve market access for its oil producers - that is, win support for new pipelines - by adopting more aggressive environmental policies.

TransCanada also cited the federal government's pledge - filed with the United Nations last month - to reduce GHGs by 30 per cent from 2005 levels by 2030, as well as the Group of Seven leaders' commitment to pursue "deep decarbonization" over the course of the century and reduce GHGs by 40 per cent to 70 per cent from 2010 levels by 2050.

"Clearly recent Canadian, North American and international GHG policy developments are consistent with President Obama's stance on not exacerbating the risk of climate change," TransCanada vice-president Alex Pourbaix said in the letter.

"We are asking the U.S. State Department to consider these recent developments that add to the abundance of evidence already collected through seven years and 17,000 pages of review that Keystone XL will not 'significantly exacerbate' greenhouse gas emissions.

"The United States will continue to be a net importer of crude oil for decades to come, which means that the Keystone XL pipeline and the Canadian crude oil it proposes to transport will still be needed," he added.

Obama administration spokesmen have said recently that the State Department continues to review the file and have given no indication on when a decision will be forthcoming. The Keystone XL issue has been politically charged in Washington; earlier this year, Mr. Obama was forced to veto legislation passed by the Republican-led Congress that would have approved the project.

Despite suggestions that tougher climate regulations will provide "social licence" for new pipelines, environmentalists rejected TransCanada's argument. The federal commitment includes no plan to cut carbondioxide emissions in the oil sands, and the Alberta government's announcement will bring little improvement in the sector, says Erin Flanagan, an oil-sands analyst with the Calgary-based Pembina Institute.

"The crux here is that those policy announcements have not translated into real change on the ground in Alberta," Ms. Flanagan said on Tuesday. "We have not seen a significant reduction in emissions from this sector to date, so TransCanada's argument that these policy developments should green-light the project don't hold water."

Farmers seek stay on neonics restrictions
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By ERIC ATKINS
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Tuesday, June 30, 2015 – Print Edition, Page B1


The Grain Farmers of Ontario has gone to court to delay the implementation of restrictions on the use of pesticides some blame for the decline in populations of bees and other pollinators.

The group that represents 28,000 farmers said it wants the Ontario Superior Court of Justice to issue a stay on the "unworkable" regulations that will cap the amount of neonicotinoid-treated seed that growers of corn and soybean can plant.

The provincial regulations require farmers to limit neonictreated seeds to 50 per cent of their fields next year, unless they submit assessments showing they have problems with worms and other crop-eating bugs. For 2017, they must undergo assessments to purchase any coated seeds.

"These regulations are unworkable, pose a significant threat to our farmers and set a precedent for a new way of farming for Ontario," said Mark Brock, chairman of the Grain Farmers of Ontario, on a conference call with media on Monday.

The problem, he says, is pest infestations cannot be properly measured until the spring, but farmers begin buying seed next month.

"We'll be asking the court to say there's enough here for this to be put on hold until we can look into it in a bit more detail," said Eric Gillespie, a lawyer acting for the group.

A spokesman for Ontario Environment and Climate Change Minister Glen Murray said he could not comment specifically on the matter because it is before the courts. "Pollinators, including bees, birds and butterflies, play a crucial role in agriculture and our ecosystem. In the last eight years, Ontario beekeepers experienced unusually high overwinter losses of honeybees," Lucas Malinowski said.

Several scientific studies have linked neonics to widespread declines in honeybees and other insects that pollinate one-third of the food we eat. The chemical, a neurotoxin, has been shown to impair bees' abilities to forage and navigate, and makes them more susceptible to viruses, parasites and long winters.

Neonics have become widely used around the world in the past decade. Europe has temporarily banned their use, and governments in Canada and the United States are reviewing their approval, given the growing number of studies that show the chemicals are being found in streams and affecting populations of pollinators, aquatic life and birds.

In Canada, neonics are used to grow a wide range of crops, flowers, fruits, sod and vegetables. All Ontario's canola, corn for grain and about 60 per cent of soybeans are grown with neonics; the province says just 20 per cent of the crops require it. It wants to reduce the acreage planted with neonics by 80 per cent by 2017.

The farmers' group and the chemical companies that make neonics and sell the treated seeds say neonics are a key tool in protecting rising yields, and that bee deaths are overstated. They say neonics are safer for humans and the environment than the chemical sprays they replaced.

The legal action marks a shift in strategy for the farm group.

Previously, it had relied on an ad campaign backed in part by the chemical industry that makes the pesticides and sells the seeds.

Mr. Brock said the seed companies support the new tack, but are not contributing money toward it.

"Over the history of our group, Grain Farmers of Ontario has not always agreed with government, but always been able to find middle ground. This is the first time we've ever had to initiate legal action as an organization," he said.

McDavid, then what?
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Drafting or acquiring reinforcements in goal and on defence top Edmonton's to-do list after their No. 1 pick
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By ERIC DUHATSCHEK
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Friday, June 26, 2015 – Print Edition, Page S3


CALGARY -- eduhatschek@globeandmail.com

On NHL entry draft day, it's easy to get caught up in the Connor McDavid hype because - let's face it - generational players only come along once in a generation.

But for the Edmonton Oilers, this year's draft needs to be about more than just stepping up to the microphone and announcing that McDavid is their first choice, which will happen early Friday night.

Oilers general manager Peter Chiarelli has a long list of business he needs to attend to at the draft or, if he can't make everything happen there, leading into the beginning of NHL free agency on July 1 (the courting window opened Thursday). In addition to No. 1, the Oilers also have the 16th and 33rd picks in the draft - three premium selections they can either use to draft prospects or trade for more immediate help.

Chiarelli is open to dealing any pick other than the first one, and he needs reinforcements in goal and on defence to help the Oilers get to the next stage in their development.

Right now, the trade market for NHL goalies is bursting with possibilities. Edmonton, the Buffalo Sabres and the San Jose Sharks top the list of teams desperately seeking help between the pipes, while the Calgary Flames and Dallas Stars are also making discreet inquiries, prices permitting.

Chiarelli can go one of two ways in goal. He can take a chance on a younger goalie or one with a smaller sample size of work (such as Robin Lehner, Cam Talbot, Eddie Lack or John Gibson), or go with a more established veteran (Kari Lehtonen, Craig Anderson or Mike Smith).

An unproven goaltender is riskier, but if the gamble pays off, then whoever it is can mature along with the rest of Edmonton's young team.

A proven veteran might just provide the stability at the back end that is the quickest way to fast-track NHL success. Last season's Florida Panthers provided the template - the addition of Roberto Luongo was the single biggest reason a team that was really bad the year before became respectable in a 12-month span.

If Chiarelli is unable to trade for the right guy in goal, then free agency is a further option. The top unrestricted free agent is the Flames' Karri Ramo, who finished the year as the team's starter and is seeking to cash in on his playoff success. If Ramo ended up in Edmonton, that would create one more intriguing plot twist to the re-emerging Battle of Alberta, which next year will feature McDavid against childhood friend Sam Bennett of the Flames. Other free-agent options in goal: Antti Niemi of San Jose, Michal Neuvirth of the New York Islanders and Devan Dubnyk, if he doesn't re-sign with the Minnesota Wild.

The Oilers also need to solidify their defence corps and a couple of options present themselves.

The Nashville Predators are deep in blueliners and woefully thin down the middle, even if they do re-sign Mike Fisher. If Chiarelli is swinging for the fences, there might be a fit there (wouldn't Shea Weber do for this Oilers team what Chris Pronger did for the '06 squad?). Anaheim, too, has defencemen to spare, but trading within the division is always a little trickier.

Ultimately, the challenge is balancing what Chiarelli calls "the competitive juices in all of us" - the urge to get better right away - with taking the longer view and showing patience with the rebuild.

It'll be difficult in Edmonton, where the Oilers have a new set of public faces - Chiarelli as GM, Todd McLellan as coach, McDavid as the team's big star - but are nine years removed from their last playoff spot.

In Calgary, meanwhile, the Flames made the playoffs this past season, won a round and convinced the paying public they're on the right track, so there's no pressure to fast-track the process.

"There are things you do for short-term gain and analyze the cost for such," Flames GM Brad Treliving said, "but I've been clear here, a lot of my calories are spent on the long term - how do we get better beyond the next 82 games?" Following is a team-by-team look at what trade and draft moves might be in the offing.

Calgary Flames

The Flames have six picks in the top three rounds thanks to late trades that sent Curtis Glencross to the Washington Capitals and Sven Baertschi to Vancouver. The Flames have great organizational depth in goal, but their two young hotshots (Jon Gillies and Mason McDonald) are years away from being NHL-ready. Their draft-day priority is depth on defence - they need to add bluechip pieces - and they have cap space to spare, so they would consider taking on someone else's contract headache if the deal was sweet enough. That's how the Kings' Martin Jones gets linked to them.

Edmonton Oilers

The Oilers are drafting first over all for the fourth time in six years, and after selecting McDavid, the key is to make better choices with their later picks than they have in the past. That said, the Oilers are open to trading both the 16th and 33rd picks to make improvements on defence and in goal.

The biggest question for Chiarelli is: Would he trade a core young player off the current team if that's the price for a major upgrade on defence and in goal?

If Ilya Samsonov, the young Russian goalie prospect everyone's excited about, is still available at 33 and the Oilers haven't moved that pick, it's hard to imagine they wouldn't pick him.

Ottawa Senators The Senators have made it clear they'll move a goalie - either Lehner or Anderson - and probably won't get the value they want in return. Lehner has had some concussion issues, which has raised some red flags with GMs, while Anderson is 34 and considered mostly just a short-term fix.

The Senators did sign two important players, Mika Zibanejad and Calder Memorial Trophy finalist Mark Stone, to reasonable contracts.

Montreal Canadiens Organizationally, the Canadiens would like to stockpile scoring wingers, big centres and maybe a left-hand-shooting defenceman at the draft. GM Marc Bergevin completed one important piece of business already, getting defenceman Jeff Petry under contract before he could test free agency. Petry's addition to a defence corps that includes two other pricey pieces - P.K. Subban and Andrei Markov - suggests Bergevin may want to offload Alexei Emelin. Forward P.A. Parenteau is also said to be available.

Vancouver Canucks

The Canucks began the off-season by floating Jacob Markstrom's name on the trade block and found little interest in the goalie who got their minorleague team to the AHL finals.

Since then, they've tested the market for Eddie Lack, who appears to be a more valuable trade chip and is only a year away from unrestricted free agency. If Lack gets moved, Markstrom will back up starter Ryan Miller. One thought: If Boston decides to shop Milan Lucic, a persistent rumour, would the Canucks try to repatriate their hometown boy?

For that matter, would Edmonton go after Lucic?

Winnipeg Jets

GM Kevin Cheveldayoff did a nice bit of work just before the previous trade deadline, landing defenceman Tyler Myers and the Buffalo Sabres' 25th over all pick in this draft in the Evander Kane deal. Philosophically, Winnipeg is a draft-and-development team that operates with a tight budget, which is why it could lose versatile winger Michael Frolik to free agency. After making the playoffs this year for only the second time in franchise history, the Jets will be picking 17th, barring a trade, marking only the second time in the past eight years they're drafting outside the top 10. It'll be more difficult to find blue-chippers such as Jacob Trouba and Mark Scheifele that last in the first round.

Associated Graphic

Vancouver Canucks goalie Eddie Lack could be a valuable trade chip. Oilers general manager Peter Chiarelli might be looking for an unproven goalie such as Lack to grow along with his young team.

SERGEI BELSKI/USA TODAY SPORTS

Team Canada to field B-team in Toronto
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By DAVID EBNER
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Saturday, July 4, 2015 – Print Edition, Page S3


VANCOUVER -- Andrew Wiggins and the best young basketball players in Canada will play for their country this summer - but they won't be on the court at the Pan Am Games in Toronto this month.

Canada will field a B-team at the Pan Ams, largely because of logistics with the NBA. The much more important tournament is in Mexico City, from Aug. 31 to Sept. 12, to qualify for the 2016 Summer Olympics in Rio de Janeiro. The Canadian men's basketball team hasn't been to the Olympics since Steve Nash and company qualified in 2000.

Coach Jay Triano said Friday he expects to have a "full roster" of Canada's best young players in Mexico. The Nash Olympic team had two NBA players. This time, almost the entire roster is set to be comprised of NBA talent.

For the Pan Ams, and for Canada, the B-team is not ideal.

Toronto has not been hit by a spark of excitement about the Pan Am Games, which lack star power. Now, the biggest young star of all, Wiggins, the NBA rookie of the year, won't be there. Nor will Tristan Thompson, who was a power for the Cleveland Cavaliers in the NBA finals. Both players are from the Toronto suburbs.

Earlier this year, Triano had said he hoped to have much of the national team together in Toronto, ahead of Mexico, so the players, inexperienced at the international level, could gel. The reality of the NBA interceded.

The starting lineup in Mexico is projected to be: point guard Cory Joseph, shooting guard Nik Stauskas, Wiggins at small forward, Thompson at power forward and centre Kelly Olynyk.

The team is very young, with Thompson, 24, the elder statesman and leader.

Thompson and Joseph, after four NBA seasons, are restricted free agents and negotiating new contracts. Stauskas has just been traded to the Philadelphia 76ers from the Sacramento Kings and will play in the NBA Summer League this month. Wiggins, during his rookie campaign, played the second-most minutes of any player in the league and his Minnesota Timberwolves don't want him playing in both Toronto and Mexico. The Boston Celtics said the same of Olynyk.

"They can play," Triano said.

"But not all summer."

In Mexico City, at the FIBA Americas tournament, Canada plays four games in four days, with one day off, and then plays another four in four days. The key game will be Sept. 11, the semi-finals. The two finalists in Mexico win berths to Rio. If Canada fails in Mexico, there is one last chance next July, at a large tournament of all the countries who have not qualified for Rio.

Three or four spots will be available for the 12-country Olympic tournament.

At the Pan Ams, Canada plays five games between July 21 to 25.

The potential star and leader will be Anthony Bennett, the No. 1 NBA overall draft pick in 2013, whose career has been a struggle. He's had two seasons of occasional flashes but mostly unfulfilled promise. Bennett, a teammate of Wiggins in Minnesota, has scored five points a game and averaged 14 minutes a game in his two seasons, in part marred by injury - but, all in, one of the worst NBA debuts for a No. 1 pick.

"Anthony Bennett's about to break through," Triano said Friday.

Bennett's game - a powerful body, fast and a sharp shooter from distance - should jibe well with the international game.

"I really have a lot of confidence in him," Triano said. "He's had a bunch of bad breaks and hopefully the Pan Am Games, in his country and in his city, are going to be something that gives him confidence. We expect a lot out of Anthony."

Bennett is one of 16 players who will try out for the Pan Am team July 12 to 17. The 12-man roster will be announced July 18.

Only a few of these players will be on the team for Mexico. Bennett could and should be one if he plays well in Toronto. Another is 6-foot-9 forward Andrew Nicholson, a 25-year-old who plays a small role for the Orlando Magic. Veteran Aaron Doornekamp, a 6-foot-7 forward who is 29 and plays in Germany, may play backup to Wiggins in Mexico.

The Pan Am camp features some of the next wave of Canadian hoop stars, including U.S. collegiate players Dillon Brooks at Oregon, Dyshawn Pierre at Dayton and Kyle Wiltjer at Gonzaga.

Jamal Murray, a 19-year-old guard who is a potential star, is also at the Pan Am camp. He heads to the University of Kentucky next season and is projected to be a first-round NBA draft pick next year.

Players who won't be in Toronto but likely will be in Mexico include Robert Sacre, the 26-year-old centre with the Los Angeles Lakers. Dwight Powell, a rookie power forward who finished the year with the Dallas Mavericks, will play in Summer League and maybe in Mexico.

Tyler Ennis, the rookie guard who finished the season with the Milwaukee Bucks, won't play in Mexico. He has had shoulder surgery and cannot fill the role of backup point guard as planned.

Backup point guard becomes a question. Numerous players are options, including Kevin Pangos and Olivier Hanlan, who will be at Summer League and aim to become NBA rookies. Pangos, from Gonzaga, went undrafted and Hanlan went in the second round to the Utah Jazz.

Associated Graphic

Anthony Bennett, right, a teammate of Andrew Wiggins in Minnesota, will be one of the few expected to play for Canada at both the Pan Am Games and FIBA Americas tournament this summer.

HANNAH FOSLIEN/AP

Josh Donaldson sets all-star vote record
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Toronto third baseman stars on the field in win over Detroit, then learns he garnered the most ballots ever cast by fans for a player
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By ROBERT MACLEOD
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Monday, July 6, 2015 – Print Edition, Page S2


DETROIT -- The most important acquisition Alex Anthopoulos has made during his six-year tenure as general manager of the Toronto Blue Jays settled into the batter's box in the first inning of Sunday's game against the Detroit Tigers.

It wasn't a long stay for Josh Donaldson.

With Jose Reyes taking his lead after a leadoff double, Donaldson swung at the first pitch he saw from Detroit starter Justin Verlander and stroked a grounder through the middle of the infield to cash the game's first run.

Donaldson's presence at first was an obvious concern to Verlander, who made an errant pickoff attempt. His throw was high and the ball tumbled deep into foul territory down the right-field line.

Donaldson was able to scamper all the way to third on the throwing error.

Win or lose, Donaldson has exhibited an innate ability to factor into almost every game he plays for the Blue Jays, and Sunday was no different.

In the Tigers' third, with Toronto still holding a slender one-run lead with two out and a Detroit runner at second, Donaldson deftly went airborne to pluck a line drive from Victor Martinez, saving a run.

For good measure, Donaldson drove in another run in the fifth, when the Blue Jays scored six runs - Jose Bautista and Justin Smoke also homered in the inning - to subdue the Tigers and avoid a three-game sweep with a 10-5 verdict at Comerica Park.

The Jays, 43-41, dropped two of three in Detroit but are still in the playoff hunt in the clustered American League East standing.

Most people knew going into the game that Donaldson, who is leading or among the leaders in most of the key offensive categories, was an all-star.

Sunday night, in a live television broadcast, the league made it official, revealing that Donaldson finished as the overall leader in fan voting and will be the starter at third base for the July 14 gala in Cincinnati.

It marks the second time that a Blue Jay player has led the way in fan voting with right fielder Jose Bautista turning the trick twice in the past four years, most recently in 2014.

Donaldson becomes the first Toronto third baseman to be elected to the All-Star Game and just the fourth Blue Jays infielder, joining the likes of second baseman Roberto Alomar, John Olerud and Carlos Delgado.

Donaldson, in his first season for the Blue Jays after a multiplayer trade in the off-season with the Oakland Athletics that included native-born son Brett Lawrie going the other way, garnered a record vote total of 14.09 million, surpassing Josh Hamilton's 11.07 million in 2012.

Donaldson was the only Blue Jay voted to the AL squad dominated by members of the Kansas City Royals, who had four players selected. They are catcher Salvador Perez, shortstop Alcides Escobar and outfielders Lorenzo Cain and Alex Gordon.

On Monday, the all-star reserves, pitchers and final vote candidates will be revealed and the Blue Jays are hopeful that catcher Russell Martin and rightfielder Jose Bautista are in the running.

Donalson's feat wasn't a bad accomplishment for a 29-year-old from the southern United States whose ascent to the top of the voting was nudged along by Don Cherry, who used his Hockey Night in Canada pulpit to stump for Donaldson in mid-June.

The cause was also endorsed by Stephen Amell, the Toronto-born star of Arrow, a U.S. television series, who urged the public to get on their computers and vote for Donaldson.

It all helped boost Donaldson's popularity as he went from trailing Mike Moustakas of the Kansas City Royals by 1.9 million votes in the race for the AL all-star third baseman spot to top spot overall.

"It's incredible," said Donaldson, who was voted to the all-star team for the first time last year.

Toronto manager John Gibbons was effusive in his praise of Donaldson, who is not only a catalyst on baseball's most explosive offence but also a firebrand in a clubhouse that had become almost complacent before his arrival.

"First off, he's one of the top players in the game. That's a given," Gibbons said. "You guys see that every day. He's got a different kind of personality, a different kind of mentality. I've said before many times that we needed it on this ball club. He's a guy that keeps pushing, pushing. Never takes an inning off."

Donaldson collected two hits on Sunday to give him 30 multihit games on the year, ranking him third among all position players in the AL.

He ranks No. 1 among AL third basemen in runs scored (62), hits (99), runs batted in (56) and slugging percentage (.527). He is tied for top spot in home runs (19) and doubles (20) and his .296 batting average ranks him No. 3.

He's a gem defensively, superb with the glove and possessed with a gun of a throwing arm.

In a game June 24 against the Tampa Bay Rays, Donaldson made a stunning catch at Rogers Centre, leaping head first into the second row of stands to snare a foul ball hit by David DeJesus.

"It's a big honour to represent this team for how many good players that we have on this team," Donaldson said. "It's an honour to be ticketed by the fans.

"Honestly I can tell you I would never expect this. Kind of mindblown a little bit from it."

Associated Graphic

Jays shortstop Jose Reyes scores Sunday in Detroit on a first-inning hit by Josh Donaldson.

RICK OSENTOSKI/USA TODAY

Raonic's as hot as London's weather
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Despite record-high temperatures at the All England Club, Canadian advances to third round behind 29 scorching aces
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The Canadian Press, The Associated Press
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Thursday, July 2, 2015 – Print Edition, Page S3


LONDON -- Milos Raonic rode his blistering serve to the third round of Wimbledon on Wednesday, firing 29 aces to hold off veteran Tommy Haas 6-0, 6-2, 6-7 (5), 7-6 (4).

The seventh-seeded Canadian, who hit the third-fastest serve in tournament history at 233 km/h, appeared to be cruising to victory early on as Haas managed to win just six points in the 17-minute first set. But the experienced German found his game in the third set, winning a tiebreaker to make Raonic work for the victory.

Raonic said he was never concerned, despite Haas's comeback.

"I was serving pretty well," said the player from Thornhill, Ont.

"That's always going to make my job a little bit easier."

Still, Raonic was impressed with the play of Haas, who at 37 became the oldest man on Monday to win a match at Wimbledon since Jimmy Connors in 1991.

"I think it's incredible what he's doing," Raonic said. "It's not just playing at 37 but playing at 37 and constantly coming back from many different things. It's a testament to the passion he has for the game and the kind of work ethic and resilience he has that makes big problems not seem too big."

Raonic, who made the semifinals at the All England Club last year, had surgery for an inflamed nerve in his right foot and missed the French Open this spring, but he won two rounds in his return to action at the recent Queen's Club event in London.

He said he's still working his way back from the injury.

"I'm doing everything I need to to be able to keep playing better and better every single match," he said, adding that he has some discomfort in his foot but "nothing out of the ordinary."

Raonic will meet Australia's Nick Kyrgios in a rematch of their 2014 quarter-final, a match Raonic won 6-7, 6-2, 6-4, 7-6 (4).

"It's going to be a good match," Raonic said. "We haven't played for a year now. I think a lot has changed on both ends. It's something I look forward to."

Raonic and Vasek Pospisil of Vancouver are the lone Canadians left in the singles draw after Eugenie Bouchard made a first-round exit on Tuesday.

Wednesday was the hottest day in Wimbledon, but defending champion Novak Djokovic kept his cool.

Down a break at 3-1 in the first set, he ran off 13 points in a row, Djokovic seized command and stayed in front the rest of the way on Centre Court as he beat Finland's Jarkko Nieminen 6-4, 6-2, 6-3 to reach the third round on a sweltering day at the All England Club.

With temperatures soaring into the mid-30s C, former champions Serena Williams and Maria Sharapova and French Open winner Stan Wawrinka also won in straights sets.

Exiting the tournament were fifth-seeded Kei Nishikori, who pulled out with a calf injury before his second-round match, and No. 7 Ana Ivanovic, who fell in straight sets to American qualifier Bethanie Mattek-Sands.

Nieminen started fast, breaking serve in the opening game and going up 3-1. But the top-ranked Djokovic won the next three games, including two at love, and never let Nieminen - playing in his final Wimbledon before retirement - back into the match.

"He came out firing some incredible shots," said Djokovic, who also won the title in 2011 and is going for a ninth Grand Slam title.

Players wrapped ice towels around their necks during changeovers and spectators used umbrellas to block out the sun as temperatures soared to record levels at a tournament known more for its rain delays than summer conditions.

The Met Office, Britain's official weather service, said temperatures reached 35.7 C at Kew Gardens, the closest observation site to the All England Club.

The previous record was 34.6C in the summer of 1976. The Met Office also said it was "the hottest July day on record" in London, with 36.7C recorded at Heathrow Airport.

Organizers kept the retractable roof over Centre Court closed in the morning to keep out the heat, then had it partially covering the spectators behind the baselines to give them shade.

Williams, the top-ranked fivetime champion, won her 23rd consecutive Grand Slam match, serving 12 aces in a 6-4, 6-1 win over Timea Babos of Hungary in a late Centre Court match. Williams next faces Britain's Heather Watson as the American bids for a fourth straight Grand Slam title and 21st overall.

Wawrinka, seeded No. 4, held serve throughout and beat Victor Estrella Burgos of the Dominican Republic 6-3, 6-4, 7-5.

In one of the day's biggest surprises, 158th-ranked MattekSands upset Ivanovic 6-3, 6-4.

Mattek-Sands, who was out for six months last year with a left hip injury, had 32 winners, more than twice the number for Ivanovic, a former No. 1 player who reached the semi-finals in 2007.

Fourth-seeded Sharapova, the 2004 champion, beat Dutch qualifier Richel Hogenkamp 6-3, 6-1.

In one of the tightest matches of the day, No. 9 Marin Cilic - the 2014 U.S. Open champion - needed more than 31/2 hours to overcome 90th-ranked Ricardas Berankis of Lithuania 6-3, 4-6, 7-6 (6), 4-6, 7-5.

Cilic will next face John Isner, the 17th-seeded American who beat Matthew Ebden in straight sets.

Associated Graphic

Defending champion Novak Djokovic plays a forehand on his way to beating Jarkko Nieminen at Wimbledon Wednesday.

CLIVE BRUNSKILL/GETTY IMAGES

Canada's past didn't help in the present
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Following his team's turfing in the quarter-finals, coach John Herdman returns his focus to the future
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By DAVID EBNER
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Monday, June 29, 2015 – Print Edition, Page S2


VANCOUVER -- The past, present and future of Canadian women's soccer intersected at the Women's World Cup.

The past - the stirring bronze medal at the 2012 London Olympics - sparked hope of a repeat, a push to the semi-finals or even all the way to the championship match. The future was represented in Canada's youth, led by 19-year-old defender Kadeisha Buchanan, a breakout star at the tournament.

The present, however, was Canada's undoing.

Sent reeling in the quarterfinals Saturday in Vancouver by two early England goals on defensive miscues, Canada strived to rally but couldn't scratch all the way back. England won 2-1, a piercing result for the home team - but the result cannot be shocking. Canada failed to score more than a single goal in any match, and when it counted on Saturday, in the second half, down a goal, Canada struggled to generate offensive punch for important stretches.

"This one stings," said Christine Sinclair, nearly two hours after the loss, after the team had itself cocooned in its locker room, absorbing the loss. Sophie Schmidt, who had a key late chance that sailed high, said: "Still brokenhearted."

The World Cup is neither failure nor success: Canada, ranked eighth coming into the tournament, reached the final eight teams out of 24. The first time Canada played a more formidable opponent, England, Canada lost - as Canada has in each competitive match it has played against England since the Olympics.

Germany plays the United States on Tuesday, and England takes on Japan in Edmonton on Wednesday. The focus for Canada becomes the future.

Coach John Herdman, hired in 2011, after Canada finished last at the 2011 World Cup in Germany, has always had a 10-year plan in his mind and on paper.

Numerous initiatives are under way in Canadian women's soccer. One is called the Excel program, for elite teenagers, run in the same rigorous way the senior team is operated. Herdman has often said Canada won't be fully in rhythm with what he calls the modern game - possession-driven soccer, tactically advanced - until 2020.

Canada relies too much on brute force. That showed flashes of what it's becoming, but not consistently.

Herdman looks toward the 2019 World Cup in France and the 2020 Olympics in Tokyo as the point when Canada will be - if all goes according to plan - one of the world's best, truly vying for a title or gold.

"There's a new DNA coming through," Herdman said after the loss to England. "There's a new breed of footballer that we're bringing through."

He referenced the Excel program, though not by name, saying younger players coming up are being trained with a clear understanding of the style of soccer Herdman is working to instill. "We're in a great place.

You can see the youth, just on the horizon."

A World Cup at home produced a midterm goal in Herdman's long-term thinking.

Canada had to play reasonably well here, even if the team is far from ideal. Herdman knew it was a juggling act, bringing up raw, young talent, while the core of the London team got older. Sinclair, for one, turned 32 earlier in June. She was a key player for Canada this month, but she was not what she was in London.

On Saturday night, asked if she would be playing at the next World Cup in France, when she'll be 36, Sinclair responded with an emphatic yes.

"The future's very bright," Sinclair said of the team and its youth movement.

The immediate challenge is the 2016 Olympics in Rio de Janeiro. A location for the qualifying tournament, with other North and Central American and Caribbean teams, has not been set, but will be staged in late January. Canada is expected to qualify for Rio. What sort of roster Canada brings to Rio - where it can have 18 players, fewer than the 23 at the World Cup - will be interesting.

Bet on youth, even if relatively untested.

First are the Pan American Games in July in Toronto, in which Canada fields an under-23 team. This is a close-up look at the future. Buchanan, back in her hometown, will be the leader, along with the likes of Ashley Lawrence. The 20-year-old midfielder, who is also from Toronto, is a close friend of Buchanan's and the two are also teammates at West Virginia University.

The biggest task, looking ahead, is the question of where goals will come from - Canada's primary problem this month.

Herdman speaks about his more robust development system that will produce more Sinclairs, more often. Buchanan may be the Sinclair of defenders, and Lawrence may emerge as a Sinclair-quality midfielder - Lawrence scored one of Canada's four goals in this World Cup. But the next Sinclair, among forwards, is not obvious.

There remains a long way to go, if Canada is to rival the true titans of women's soccer: Germany, the United States, France and Japan.

Brown triumphs over Nadal in London
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Spanish lefty struggles to get control throughout his second-round match against the 102nd-ranked German
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By HOWARD FENDRICH
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The Associated Press, The Canadian Press
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Friday, July 3, 2015 – Print Edition, Page S3


LONDON -- On the final point of the first set of his latest Wimbledon disappointment, Rafael Nadal swung his mighty, lefty forehand - and whiffed, accidentally whacking his right leg with his racquet.

It was a painful, embarrassing mistake, symbolic of the sort of day this was.

During five trips to the All England Club from 2006 to 2011, Nadal reached the final every time. In his most recent four appearances, though, Nadal has exited early against an unheralded, unaccomplished and, most importantly, unafraid opponent ranked 100th or worse. On Thursday, Nadal lost 7-5, 3-6, 6-4, 6-4 in the second round to Dustin Brown, who needed to qualify just to enter the main draw.

"It's not the end," Nadal said.

"[It's] a sad moment for me ... but life continues. My career, too."

Toni Nadal, Rafael's uncle and coach, summed up the Centre Court match this way: "He played really bad. Bad shots. Very bad with his forehand."

All true. But give credit to Brown and his varied, risky and entertaining brand of tennis, a mix of old-school serve-and-volleying, drop shots, drop volleys and go-for-it returns.

"I had nothing to lose. If I lose 6-1, 6-2, 6-3, everyone says 'Bravo, Rafa,' " Brown said.

The 30-year-old Brown was born in Germany to a Jamaican father - whose face is tattooed on Brown's stomach - and German mother. They moved to Jamaica when he was 12 and returned to Europe about a decade ago.

Around that time, his parents bought him an RV so he could drive from tournament to tournament.

Who could have imagined this sort of triumph back then? Or, frankly, even now?

After all, Brown is ranked 102nd, entered Thursday with a 6-11 record in 2015 and has never been past the third round at a major.

Vancouver's Vasek Pospisil is through to the third round of Wimbledon after posting a fourset win over 30th seed Fabio Fognini of Italy.

Emulating fellow Canadian Milos Raonic, Pospisil fired 23 aces en route to a 6-3, 6-4, 1-6, 6-3 win over Fognini.

Pospisil broke Fognini three times in the match and converted on 83 per cent of his first serve points.

Fognini converted two of five break points, with both coming in the third set.

Pospisil will face James Ward in the third round.

Nadal, meanwhile, is a former No. 1 and the owner of 14 major titles, tied with Pete Sampras for second-most behind Roger Federer's 17.

Federer joined Andy Murray and Petra Kvitova as past Wimbledon champions picking up straightforward, straight-set victories Thursday. Federer's 6-4, 6-2, 6-2 win over Sam Querrey of the United States included one particularly memorable moment - an on-the-run, between-the-legs lob.

"You want to go over and give him a high-five sometimes," Querrey said, "but you can't do that."

Nadal used to leave opponents feeling that way, too. Not lately.

He missed time last season with a right wrist injury, then needed appendix surgery and has spoken about confidence issues.

After his run of five consecutive French Open titles ended last month with a quarter-final loss to Novak Djokovic, Nadal's ranking dropped to 10th, his worst in 10 years.

Now, he has failed to win any of his past four major tournaments, not even reaching the semi-finals.

It's the 29-year-old Spaniard's longest drought since the first five Slams of his career.

Consider, too, Nadal's history at Wimbledon. He lost to Federer in the 2006 and 2007 finals, then beat him 9-7 in the fifth set of the epic 2008 final. After missing the 2009 tournament because of injury, Nadal collected another trophy in 2010, then lost to Djokovic in the 2011 final.

"I don't know if I will be back to [that] level," Nadal acknowledged.

In 2012, he lost to No. 100 Lukas Rosol in the second round. In 2013, he lost to No. 135 Steve Darcis in the first. And last year, he lost to No. 144 Nick Kyrgios in the fourth.

Like those guys, Brown played wonderfully. His back-length dreadlocks jumping around as he raced to the net, Brown serveand-volleyed on 99 of 114 service points, winning 71 of those. He hit serves at up to 215 kilometres an hour.

"Whatever I do is to take him out of his comfort zone," Brown said.

Most importantly, he never let up.

Associated Graphic

Twenty-nine-year-old Rafael Nadal has failed to win any of his past four major tournaments.

IAN WALTON/GETTY IMAGES

Richardson on the comeback trail with Riders
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By CRAIG SLATER
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The Canadian Press
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Saturday, June 27, 2015 – Print Edition, Page S2


REGINA -- Jamel Richardson's football résumé is an impressive one.

A two-time Grey Cup champion - and the title game's MVP in 2010 - Richardson registered five straight 1,000-yard seasons, all accomplishments registered with the Montreal Alouettes from 2008-13.

But now the 33-year-old not only finds himself back with the Saskatchewan Roughriders - the team Richardson began his CFL career with in '03 - but on the comeback trail. When Richardson steps onto the field Saturday for the Riders' season opener against the Winnipeg Blue Bombers, it will be his first game since tearing the anterior cruciate ligament and lateral collateral ligament in his left knee midway through the 2013 campaign.

"Football is a funny business sometimes," said Riders offensive co-ordinator Jacques Chapdelaine. "You always have something to prove.

"You have to prove it to yourself, you have to prove it to teammates, to the opponents. The day that you stop living with that mindset you start getting complacent, and that's not a good position to be in in this business."

Montreal released Richardson during training camp in 2014 and he didn't play the entire season.

Richardson signed with Saskatchewan as a free agent last December and said he wasn't ready to call it quits just yet.

"There was no doubt in my mind I'd be back on the field," he said. "There's too much inside of me.

"When I'm done with football it's going to be on my terms."

But Richardson admitted his comeback wasn't easy.

"It was definitely a long process to get back to where I am now and I had to be patient with that process," he said. "Now I'm healthy.

"My biggest test was finishing training camp and trying not to miss any days but still taking it steady. Everything worked out for me that way so I'm ready to go, ready to take the next step.

My legs have come back to life and I'm feeling great." That's great news for Saskatchewan, which will be without speedy slotback Weston Dressler on Saturday. Dressler's unspecified injury isn't considered serious and while sophomore American Ryan Smith will take Dressler's spot Richardson is expected to carry a solid workload.

Chapdelaine, in his first season with the Riders, raves about the versatility of his receiving corps.

The six-foot-five Richardson certainly has a role within the game plan.

"I can see some of the things he can do well and I can see some of things that maybe other guys can do a little bit better than him," Chapdelaine said.

"That's the beauty of this team, we have a number of guys who can do so many different things.

"There is only one ball to go around, but there is enough diversity within our system to be able to not just rely on one guy.

We have many guys here who can give us solutions on how to beat a defence."

Richardson is no stranger to making life difficult for opposing defences. In 2011, he recorded a league-record 12 100-yard games and finished with 112 catches for 1,777 yards (both league highs) and 11 TDs. Three years earlier, Richardson had a CFL-leading 16 touchdown grabs.

"We're going to be explosive and we're going to put up a lot of points this year," Richardson said. "There's a lot of playmakers on this team and, when you have more than just two or three guys that can make plays, it makes it that much harder on the defence.

"They don't know who to key on. It could be anyone who makes that catch, score that touchdown."

Associated Graphic

Slotback Jamal Richardson started his CFL career with the Saskatchewan Roughriders, and is back with the team after several great years playing for the Montreal Alouettes.

TROY FLEECE/CP

Williams, Djokovic start strong
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World No. 1s get down to work on grass courts as Canada's Raonic also advances
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By STEPHEN WILSON
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The Associated Press
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Tuesday, June 30, 2015 – Print Edition, Page S2


LONDON -- Serena Williams knew she had to do something - fast.

Trailing 3-1 to a qualifier on the first day of Wimbledon, the topranked player was not about to drop the opening set as she did four times during her run to the French Open title.

"She came out so fast, I was like, 'Oh my God, if I don't start, I'm going to be down a set.' And I was tired of being down a set," Williams said.

So the five-time champion got to work, winning 11 of 13 games to beat 113th-ranked Margarita Gasparyan of Russia 6-4, 6-1 on Monday to extend her Grand Slam winning streak to 22 matches as she pursues a fourth-straight major title.

Things were more straightforward for defending men's champion Novak Djokovic, who opened play on Centre Court and led all the way for a 6-4, 6-4, 6-4 win over Philipp Kohlschreiber of Germany.

"It's great to be back," said Djokovic, who beat Roger Federer in last year's final. "This is the cradle of our sport, Centre Court. It doesn't get any better than Wimbledon."

Williams, who played the opening match on No. 1 Court, is seeking to become the first player since Steffi Graf in 1988 to complete a calendar-year Grand Slam, a sweep of all four major titles in the same season.

Not only did Williams get off to another slow start Monday, she also got a warning for her language. In the sixth game, she received a code violation for an audible obscenity after sliding on the grass and falling during a point. But Williams was able to impose herself on an opponent making her Wimbledon debut.

"I knew she would be a good player," Williams said. "I can't say I thought she'd be that good, to be honest."

Also reaching the second round was Serena's sister, Venus, also a five-time champion at Wimbledon. The 16th-seeded Venus recorded a double bagel, beating Madison Brengle 6-0, 6-0 in just more than 40 minutes. Venus, who could face Serena in the fourth round, had 29 winners, compared with just two for Brengle.

Kohlschreiber, the highestranked men's player outside the seedings at No. 33, had figured to pose a stiff test for Djokovic, who came to Wimbledon after a painful loss to Stan Warwinka in the French Open final and without having played a warm-up tournament on grass. But the Serb was rarely troubled, seizing command with his all-court game, serving 12 aces and breaking five times.

Djokovic was followed on Centre Court by Maria Sharapova, who won a Wimbledon title at 17 in 2004. The fourth-seeded Russian also had a trouble-free opener, sweeping to a 6-2, 6-2 win over Britain's Johanna Konta.

Fifth-seeded Kei Nishikori of Japan was extended to five sets by Simone Bolelli on Court 1 before prevailing 6-3, 6-7 ("4), 6-2, 3-6, 6-3.

Other men's winners Monday included No. 7 Milos Raonic, No. 9 Marin Cilic, No. 16 David Goffin, No. 17 John Isner and No. 26 Nick Kyrgios.

Women advancing included No. 7 Ana Ivanovic, No. 11 Karolina Pliskova and two-time Australian Open champion Victoria Azarenka.

Associated Graphic

Wimbledon defending champion Novak Djokovic serves during his first-round match against Philipp Kohlschreiber on Monday. 'It's great to be back,' Djokovic said. 'This is the cradle of our sport.'

JULIAN FINNEY/GETTY IMAGES

U.S. beats Germany to advance to final
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American team will play the winner of Wednesday night's match between defending champion Japan and England
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The Associated Press
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Wednesday, July 1, 2015 – Print Edition, Page S2


MONTREAL -- Carli Lloyd buried a penalty kick, Hope Solo got another shutout and the United States beat topranked Germany 2-0 on Tuesday night to advance to the title match at the Women's World Cup.

Lloyd's penalty kick in the 69th minute went into the right side of the goal less than 10 minutes after Celia Sasic shot wide on a penalty kick for Germany.

Solo has posted five straight shutouts for the United States in the tournament. Kelley O'Hara came in off the bench and scored in the 85th minute, delighting the pro-American crowd.

The second-ranked United States will play the winner of Wednesday night's match in Edmonton between defending champion Japan, ranked No. 4, and sixth-ranked England. The final is set for Sunday at Vancouver's BC Place.

It was the fourth World Cup meeting between Germany and the United States. In each of the first three games, the winner went on to win the title.

The marquee matchup led to lines of fans waiting to get in about three hours before the game. The line for the main souvenir stand snaked up a halfdozen ramps to the building's third level, at one point.

The stadium built for the 1976 Olympics, where the East German men won the gold medal, was filled nearly to its blue fabric roof, mostly with fans cheering for the United States. The crowd was announced at 51,176.

Previous games in Montreal had the stadium less than half full, with the upper bowl completely empty.

The United States had several good chances from the start.

Julie Johnston missed on a header off a corner kick from Megan Rapinoe, and Alex Morgan's breakaway in the 15th minute was stopped by goaltender Nadine Angerer.

There was a scary moment in the first half when Germany's Alexandra Popp and American midfielder Morgan Brian collided in front of the U.S. goal following a free kick from about 25 yards out. Television cameras caught blood in Popp's hair, and Brian was prone on the field for several minutes. Both players returned to the match.

After a scoreless first half, Lloyd had a header bounce inches wide to open the second.

Sasic's penalty kick came after Johnston fouled Popp in the box.

Sasic fooled Solo, who went right, but her kick went wide left, prompting a roar from the crowd.

Sasic went into the match as the tournament's high scorer with six goals.

Shortly thereafter, Annike Krahn got a yellow card for fouling Morgan in the box, but replays showed it occurred just outside. Lloyd's penalty kick was her third goal in three matches.

O'Hara scored on Lloyd's leftfooted cross.

The United States tweaked its formation for the match. Morgan started up top, with Lloyd as an attacking midfielder with Rapinoe and Tobin Heath on the wings.

The United States had success in its quarter-final against China when it had Lloyd roaming up top and Brian back as a holding midfielder.

The United States improved to 3-1 against Germany in World Cup matches and 19-4-7 overall.

The United States has won two World Cup titles, but none since 1999. The Americans have appeared in the semi-finals of all seven of the women's tournaments.

Associated Graphic

U.S. forward Kelley O'Hara, top, celebrates her goal against Germany on Tuesday.

JEAN-YVES AHERN/USA TODAY SPORTS

A contrarian's guide to bank stocks; Investing in the Big Five can yield impressive returns. But finding the Mighty One--the bank stock most likely to soar--is better still
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By DAVID BERMAN
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Friday, June 26, 2015 – Print Edition, Page P2


Canadian banks have delivered great returns for investors, and anyone who wants to invest in the sector can easily buy an exchange-traded fund that tracks all five of the big lenders. But is there an even a smarter way to invest in Canada's leading oligopoly--a way to squeeze not just the average return from the sector, but to focus on the one or two bank stocks most likely to perform best over the year ahead?

In fact, there is. And the best part: If history is any guide, you don't have to be that clever to find these exceptional performers. Yet they can add an impressive dollop of profit to your portfolio.

The numbers are eye-catching: If you had owned all of the Big Five banks over the past five years, in equal dollar amounts, you would have gained an impressive 80% including dividends. But your results would have been even better if you had chosen the best single performer over that entire period--Toronto-Dominion Bank, which delivered a return of 98%. And you would have fared better still by picking the best-performing bank in each of the five years. A perfect stock-picker would have achieved a return of more than 120%, or 40 percentage points better than the average.

Okay, perfect is a tough goal. But achieving pretty good isn't so difficult. We looked at three easy ways to size up the big banks and were surprised to discover that the simplest approach worked best. Equally surprising: what didn't work.

DIVIDEND DARLINGS Buying the bank with the biggest dividend yield at the start of January, and holding it until the end of the year, looks like a tempting strategy. Theory says you should collect a bigger quarterly payout while benefiting from the strong probability that the share price will rise to reflect the lush dividend.

Sadly, though, this approach only works in theory. In each of the past five years (including 2015 so far), the highest-yielding bank stock usually went on to underperform the average big bank over the course of the year. You would have been better off with that simple exchange-traded fund.

BARGAIN BEAUTIES A strategy based on cheap valuations also disappointed. The bank stock with the lowest price-to-earnings ratio--that is, the lowest share price relative to its 12-month trailing earnings--underperformed the average bank in three of the past five years. Again, you were better off with an ETF.

BASEMENT DWELLERS So what worked? Simply buying the bank stock that had been the worst performer in the previous year gave you a very good chance of delivering better-than-average gains in the next year. Indeed, this approach worked in four of the past five years. If the pattern holds up, last year's laggard, Bank of Nova Scotia, has a good chance of outperforming in 2015.

80%: Return On Bank Stocks Since 2010

Associated Graphic

Illustration Joe Magee

Why East Texas is ground zero for settling patent cases
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By KARIMA BAWAUN
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Saturday, July 4, 2015 – Print Edition, Page B2


Senior fellow at CIGI and currently providing advice on intellectual property and strategy to Canadian startups. She is former general counsel and chief legal officer for Research In Motion/BlackBerry.

On May 9, The Globe and Mail published Canadians Can Innovate, But We're Not Equipped To Win by former Research In Motion co-CEO Jim Balsillie. This is part of a series responding to and expanding on that.

In the innovation economy, companies that want to grow their business globally need to think about the role geopolitics plays in that growth.

Patents and other intellectual property ("IP) rights are at the heart of revenue generation, but they can also stifle commercialization. IP decisions that affect commercialization are made in courts that are typically accountable only to very local interests.

For technology companies, these courts are most often in the United States, because of the size of the market and because of the advantages these courts offer to domestic patent holders.

As such, to better position themselves, companies are paying greater attention to patents and IP. For example, in 2011, Google and Apple spent more money on IP rights than on R&D. They did this not only to protect their innovations, but to use their patents defensively against competitors. These companies are gathering their arsenals, as they know they will be sued repeatedly and these patent suits will most commonly be in plaintifffriendly jurisdictions, such as the Eastern District of Texas. Apple and Google are not alone in this - BlackBerry, formerly Research in Motion, has been repeatedly sued in the same district.

In 2013, almost 25 per cent of the patent lawsuits filed in the U.S. were in the Eastern District, where a single judge had more than 900 patent cases assigned to him. East Texas has been referred to as a place where a profitable idea can be quashed by a meritless lawsuit. Often, plaintiffs will go there to force defendants to pay large damage awards and settlements.

It is also a place where speedy trials cause business disruption and create sizable legal bills.

When defendants are sued in East Texas, they frequently settle even meritless claims because it's cheaper and less disruptive. For plaintiffs, in addition to a better settlement prospect - even on a meritless claim - a speedy resolution means a quicker payout, less time for a defendant to work around its patents and a lower risk that market changes and tech advances will make the patented invention obsolete and irrelevant.

Another factor favouring East Texas as a venue of choice is the plaintiffs' prospects for success, especially when they are going up against a foreign entity, since there is frequently an inherent jury bias against foreign parties.

East Texas juries are also known to be sympathetic to plaintiffs.

Between 1995 and 2013, the rate of success for "patent trolls" in the district was 45 per cent, compared with the average U.S. success rate of closer to 25 per cent.

The damages awarded by juries in this district are staggering.

Since 2000, Texas's total patent damages award is the highest, with more than $19-billion ("U.S.) - compared, for example, with $7-billion in the Western District of Pennsylvania and just more than $2-billion in Delaware. The median award for damages in East Texas is also higher, in the range of $18-million to $20-million, as compared with most other courts in the United States, which are below $2-million.

Texas's courts also offer procedural advantages, since, historically, matters rarely have been resolved through pretrial proceedings. This means that complex and technical issues outside the general realm of knowledge of ordinary citizens have to be decided by lay juries. So there is greater pressure for the defendant to settle, even if the claim is without merit.

Finally, these courts are often reluctant to allow cases to be transferred to a jurisdiction more convenient to the defendant, even where the case has a tenuous connection to Texas. Patentees themselves will go to great lengths to keep their cases in the state.

This sort of gamesmanship is not unique to the United States, of course. In Europe, patent infringement cases are often first filed in Germany. That country's patent enforcement system offers patentees the advantage of speed and certain procedural benefits.

Infringement and invalidity proceedings are split and determined in different courts on different schedules. Frequently, infringement cases precede the invalidity proceedings resulting in a finding of infringement ("with the possibility of an injunction being granted) before invalidity is even considered.

Canadian companies need to understand the strategic aspects of international IP practices and procedures so that they can anticipate these sorts of tactics and be prepared to respond offensively and defensively. And Canadian policy makers need to create and implement strategies in response to judicial and geopolitical realities if we want our innovative companies to scale globally.

As Thomas Hobbes pointed out, life can be nasty, brutish and short. So while it doesn't sound very Canadian, it's better for our companies to be on the winning side than sidelined because they don't play by the same rules as their competitors.

There's more to Element than GE deal
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By JACQUELINE NELSON
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Tuesday, June 30, 2015 – Print Edition, Page B1


Streetwise

Element Financial Corp.'s $8.6billion acquisition of part of General Electric Co.'s fleet management business is not the end of the company's growth plans, according to chief executive Steve Hudson, who went so far as to name his next acquisition targets.

"This message of growth at Element is: It's not over, it's not over, it's not over," said Mr. Hudson, on a conference call with analysts Monday. "They say you have to say something three times," he added.

According to Mr. Hudson, the Toronto-based equipment finance company is still in expansion mode, both through more acquisitions as well as possible advantages from its global network of fleet leasing partners.

The GE deal boosts by 580,000 the number of vehicles Element owns or manages, with assets in the United States, Mexico, Australia and New Zealand. Mr. Hudson said Element will have 1.2 million vehicles at the end of September, when the deal is set to close. The two companies entered into exclusive negotiations on the deal, an opportunity stemming from Element's acquisition of GE's Canadian fleet portfolio in 2013.

The value of Element's net earning asset portfolio - the income-producing assets owned by the business - will swell from $10.8-billion to $17.9-billion. The company predicts that synergies such as merging facilities and improved funding costs will save $90-million to $95-million in 2016 and 2017.

Much of Element's focus is on its fleet management business, which helps finance, maintain and track vehicles such as vans and trucks for companies that have a mobile work force or are transporting goods. The company also offers technology to make fleets more effective, such as tracking drivers' job completion, reducing mileage and ensuring health and safety standards are being met.

Right now, 73 per cent of the company's net earning assets are in its fleet unit, which the company sees as a lower-risk, predictable business with higher returns on equity and assets.

While Element will focus on integrating the GE operations, Mr. Hudson already has his eye on a couple of other businesses that will likely come to market in the next year to 18 months. And the emphasis will continue to be on fleet management. "We're happy with our existing vendor, aerospace and rail [business lines]," Mr. Hudson said in an interview.

The first asset he's watching is LeasePlan Corp. NV, a Dutch fleet manager that is part owned by Volkswagen AG, the German car giant. The company has a large European and Latin American business, but "we don't have an interest in LeasePlan outside of North America," Mr. Hudson said.

And then there's "Hertz, which is going through a restructuring with a new CEO, and has a fleet company - we would expect that to come on the market at some point," said Mr. Hudson of Hertz Corp.'s subsidiary Donlen.

At the same time, Element is looking to extend its international network through a deeper partnership with Paris-based Arval, a subsidiary of BNP Paribas Group.

About one year ago, Element struck a deal to expand into the United States with the $1.4-billion purchase of PHH Arval, which was then PHH Corp.'s fleet management business. The acquisition gave Element a foot in the door to the more than 14-year alliance between Arval and PHH Arval, serving clients across Europe and North America.

Mr. Hudson said competing for GE assets against this existing partnership didn't makes sense, so Element helped Arval strike a memorandum of understanding for Arval to acquire GE Capital's European fleet operations with more than 160,000 vehicles in 12 European countries, valued at $3.3-billion.

"Going forward, it means we have more purchasing power together," said Mr. Hudson, who cited maintenance, parts and fuel as potential areas of savings.

The Element-Arval Global Alliance, which also includes companies such as Avis Fleet Services in Southern Africa and Sumitomo Mitsui Auto Service in Japan, will manage customer fleets in more than 40 countries. GE also has a fleet business in Japan, but Mr. Hudson said that was never an offering on the table in Element and Arval's negotiations.

As fleet businesses continue to consolidate, Mr. Hudson said, the industry is mirroring what happened to credit cards in the 1980s, when financing through securitization and other efficiencies accelerated the growth of the largest players.

The GE deal will be funded in part through $2.7-billion in shares and bonds Element came to market for last month. But that's it for a while - the company said it's not coming back to the market to raise equity any time soon.

Element Financial ("EFN) Close: $19.19, up 32¢

Associated Graphic

THE GLOBE AND MAIL SOURCE: ELEMENT FINANCIAL CORPORATION

'National security' review a warning to investors
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By JEFF GRAY
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Thursday, July 2, 2015 – Print Edition, Page B1


An apparent move by the federal government to quash a plan by a Chinese company to build a factory in Saint-Bruno-de-Montarville, Que., is the latest indication of Ottawa's willingness to use its opaque national security review process to block foreign investments it sees as potential threats.

Last summer, a newly formed Canadian subsidiary of Beijingbased Beida Jade Bird Group, which is controlled by China's Peking University, announced plans to invest $30-million, build a 130,000-square-foot manufacturing plant and hire more than 70 people. The company, called Maple Armor Fire Solutions Canada Inc., planned to build fire-alarm systems for the Chinese market, which values a "Made in Canada" sticker on this kind of product as a symbol of quality.

But almost a year after a groundbreaking ceremony attended by Saint-Bruno's Mayor and Quebec Economy Minister Jacques Daoust last summer, there is no factory. In June, La Presse, citing unnamed sources, reported that the federal government had conducted a national security review and had rejected the location of the factory as too close to the headquarters of the Canadian Space Agency, just under two kilometres away.

The rejection is the latest such move by Ottawa, which has grown increasingly wary of investments from state-owned enterprises from China and elsewhere.

In 2009, the federal government added to the Investment Canada Act the ability to block mergers or foreign investment over national security concerns. A handful of high-profile deals have been shot down by secretive national security reviews. But lawyers say an unknown number of other transactions, which have never been made public, have also been vetoed in recent years.

The Globe could not confirm the reason for the rejection of Maple Armor's plans. A spokeswoman for the town of Saint-Bruno said officials were alerted by the company in April that the factory was not going ahead, because of a "decision by Industry Canada." An Industry Canada spokeswoman said confidentiality requirements prohibit the department from offering any comment.

Quebec's provincial government gave the company $3-million in interest-free loans and a $1-million grant. Chantal Corbeil, a spokeswoman for the government agency Investissement Québec, confirmed that Industry Canada had vetoed the site in Saint-Bruno, but could not say why. She said the provincial investment agency is still assisting the company, which now plans to locate its factory somewhere else, likely in Montreal's South Shore area. A representative from the company could not be reached.

Lawyers who specialize in Canada's foreign investment rules say the case appears to be the first time an investment has been vetoed for its location. It is also the first known case of the quashing of the establishment of a new business, as opposed to the acquisition of a Canadian asset.

The United States has blocked or reviewed sensitive foreign investments owing to their proximity to military bases. In 2012, President Barack Obama blocked a privately owned Chinese company from building wind turbines close to a U.S. Navy military site in Oregon, citing national security concerns.

Omar Wakil, a lawyer with Torys LLP, said Canadian national security reviews for foreign investments, while still rare, are on the rise. "We are seeing an increased number of transactions being scrutinized under this provision."

Oliver Borgers, a lawyer with McCarthy Tétrault LLP, said he knows of others deals, never made public, that have been quashed by security reviews, but could not provide specifics. He said foreign investors with potentially sensitive transactions, no matter what size, need to get clearance from Industry Canada well in advance before going ahead.

Brian Facey, a lawyer with Blake Cassels & Graydon LLP, said the Maple Armor case, if the reports are true, shows the government is not shy about using its review powers: "I think what this suggests is that the national security provisions of the Investment Canada Act are not just window dressing."

Several high-profile deals have been undone by national security reviews in recent years, including Manitoba Telecom Services Inc.'s attempt in 2012 to sell its Allstream unit to Accelero Capital Holdings, an investment firm cofounded by Egyptian billionaire Naguib Sawiris. In 2013, Prime Minister Stephen Harper himself warned that any foreign bid for Waterloo, Ont.-based BlackBerry Ltd. would face close scrutiny, after reports that China's Lenovo Group Ltd. was planning a takeover.

Associated Graphic

Groundbreaking for the Chinese-owned fire-alarms factory at Saint-Bruno is about as far as it went.

MAPLE ARMOR

Greece talks break down as default fears rise
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By ERIC REGULY
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Friday, June 26, 2015 – Print Edition, Page B1


ROME -- Economics

A sense of doom and frustration enveloped the talks to reach a new bailout accord between Greece and its creditors on Thursday, boosting the chances that the cash-strapped country will default early next week.

European Union finance ministers and government leaders expressed dismay that the talks, which seemed on the verge of a breakthrough early in the week, had all but collapsed. German chancellor Angela Merkel told journalists just before the start Thursday of the two-day summit that "one even has the impression that we've regressed a bit."

In a closed door meeting, she expressed her frustration by insisting "we will not be blackmailed" by Greece, Reuters reported.

In a tweet on Thursday, Slovak finance minister Peter Kazimir wrote, "Allow me not to be optimistic anymore - but I'd like to be proven wrong."

A rare hint of optimism came from French president François Hollande, who said that an agreement was "possible and necessary" and urged Greece's creditors - the EU, the European Central Bank and the International Monetary Fund - to reach an agreement quickly to temporarily stabilize Greece with an injection of €7.2-billion ($9.9-billion) of loans withheld from the current bailout, which expires June 30.

That is the same day that Greece must make a 1.6-billion debt payment to the IMF.

"Let me say this: The earlier the better," Mr. Hollande said.

"Because when an agreement is possible, when it's necessary, the accord must come. Not just because it's useful, but because there is nothing to gain by taking much more time. Greece doesn't have any left."

The finance ministers of the euro zone countries have met three times this week with Greek negotiating teams, led by Prime Minister Alexis Tsipras. They had hoped to break the stalemate by Thursday and send the compromise proposal to the EU leaders, after which the Greek parliament would vote on the fresh bailout package.

While some of the substantive issues have been resolved, there is still significant disagreement over pension reform, corporate tax rates and the value-added tax.

Greece's talks with its creditors collapsed Thursday morning, when the creditors demanded that Mr. Tsipras accept a compromise proposal. They told him that, if he were to reject it, the proposal would be sent to the finance ministers as a "take it or leave it" deal.

Greek Finance Minister Yanis Varoufakis then presented his own proposal, which evidently persuaded the finance ministers to call off their threat. The Greek team and the creditors are to meet again on Saturday, with Ms. Merkel reportedly insisting that a new deal be agreed before the markets reopen on Monday.

Investors fear that a default could create financial chaos, crippling the Greek banks and spreading throughout Europe and beyond. In Washington, the U.S. Senate banking, housing and urban affairs committee held a hearing Thursday on "the global impact of a Greek default."

Failure to make a breakthrough increased the chances that Greece will have to impose capital controls on its banks as early as Monday to prevent the run on deposits from crippling the banks.

The deposit exodus has been covered by daily emergency loans from the European Central Bank.

But with no agreement between Greece and its creditors in sight, the deposit outflow, which had slowed earlier this week, could well accelerate again. Some euro zone finance ministers, including Germany's Wolfgang Schaeuble, have been pushing for capital controls in exchange for more ECB loans to the Greek banks.

Even if a deal is concluded this week, the ill will between the two sides, and within Mr. Tsipras's own Syriza party, will likely ensure animosity all around. "Political and implementation risks are high, and tensions both with creditors and within the government's own majority are likely to appear, as reaching an agreement will require the government to cross some of its 'red lines,' " the French bank Société Générale said in a Wednesday morning note.

If a deal is reached in Brussels, Mr. Tsipras's problems will not be over. The far-left wing of Syriza is complaining that the new austerity measures that would come with a new bailout package would constitute a betrayal of Syrzia's anti-austerity campaign pledges.

In a vote, he is likely to lose the support of dozens of his parliamentarians, meaning he will have to rely on votes from pro-European, pro-bailout opposition parties to get the bailout deal approved.

Tsipras juggles need for deal with political battle at home
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By ERIC REGULY
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Thursday, June 25, 2015 – Print Edition, Page B1


ROME -- Greek Prime Minister Alex Tsipras ran into new roadblocks on Wednesday in his daunting and potentially explosive task to complete a deal with Greece's creditors and pass legislation to approve that deal within the next four days.

Before he left for Brussels in the morning, Mr. Tsipras said that Greece's creditors had complained that some parts of Greece's latest proposal for a new bailout plan were inadequate.

"The repeated rejection of equivalent measures by certain institutions never occurred before, neither in Ireland or Portugal," he said. "This curious stance may conceal one of two possibilities: Either they don't want an agreement or they are serving specific interest groups in Greece."

The creditors - the European Union, the European Central Bank and the International Monetary Fund - reportedly want the Greek government to rely less on taxation and more on spending cuts in its new austerity plan.

The government, for instance, had proposed hiking the corporate tax rate to 29 per cent from 26 per cent. The creditors want a 28-per-cent rate, meaning Greece would have to fund the difference elsewhere.The creditors also want a more aggressive pension cuts than Athens had proposed. Pension reform has emerged as a potential deal buster - the Greek government has called it a "red line" issue.

In spite of the gap between the two sides, many analysts and economists expect the new package to approved by euro zone finance ministers, even if they are not ruling out another negotiating collapse.

The tax measures include a broader value-added tax, a higher land tax and a wealth tax.

They would go along with a levy on companies with annual income of more than 500,000 ($700,000) and steps to eliminate early retirement options.

The measures would raise 7.9billion over 2015 and 2016 - a significant amount for a small economy trapped in recession. If the reforms are approved by euro zone finance ministers, the EU leaders and the Greek parliament, Greece will receive 7.2billion in loans that had been held back from the current bailout, which expires on June 30.

The loans, however, may not arrive in time for Greece to meet a payment deadline to the IMF on the same day. The IMF is owed 1.6-billion and managing director Christine Lagarde has said she will give Greece no payment leeway. But her stance is bound to change if the new bailout measures are approved by all sides by early next week.

Assuming Mr. Tsipras secures approval for his new deal with creditors in Brussels this week, the Greek parliament must accept or reject the new bailout measures. That vote is expected Sunday or Monday. The creditors have made it clear that the measures have to be cleared in Athens before they go to the national parliaments in the euro zone for approval.

Mr. Tsipras will inevitably lose support form the hard-left wing of Syriza, which will criticize him for accepting a deal that he had campaigned against during the January election. Mr. Tsipras and his Finance Minister, Yanis Varoufakis, had pledged to end the austerity measures that they claimed were deepening the recession and raising the jobless rate to the highest in the Western world. "A political crisis is about to replace the economic crisis," said a euro zone official, who did not want to be quoted by name. "My bet is that Tsipras will face elections soon."

Syriza's Left Platform has 40 members. If Mr. Tsipras loses their votes, he will have to make them up among the opposition parties. "It will remain a major challenge for the Greek Prime Minister to successfully pass a potential agreement through parliament," Deutsche Bank analyst George Saravelos said in a note. "How the political process plays out largely depends on the number of parliament members the current government loses."

Mr. Tsipras will probably gain the support of a couple of opposition parties, including the centre-right New Democracy, which led the previous government and which had been largely in favour of accepting new bailout terms aimed at keeping Greece solvent and inside the euro zone.

But support from the opposition parties would, at the same time, show voters that Mr. Tsipras, in accepting new bailout terms that include deeper austerity measures, had abandoned some or all of his election pledges. "This will undermine him completely," the euro zone official said.

Associated Graphic

Greece may not be able to meet an IMF payment deadline.

PETROS KARADJIAS/AP

World Bank's SNC appeal to be heard by top court
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By JEFF GRAY
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Friday, July 3, 2015 – Print Edition, Page B1


A battle over whether the World Bank can be forced to produce its files on the bribery probe in Bangladesh that later resulted in Canadian criminal charges against three former SNC-Lavalin Group Inc. employees is going to the Supreme Court of Canada.

The Washington, D.C.-based World Bank is challenging an Ontario Superior Court decision that ordered it to produce documents related to its investigation of bribery allegations around a multibillion-dollar project to build a bridge in Bangladesh.

The Supreme Court of Canada announced on Thursday that it would hear the case. A date has not been set.

It's the latest twist in the corruption allegations that for years have swirled around Montrealbased SNC-Lavalin, Canada's largest engineering firm, which also faces separate RCMP charges related to allegations that $47.7million in bribes were paid to win contracts in Libya under the regime of the late dictator Moammar Gadhafi.

Starting in 2010, the World Bank conducted its own investigation into allegations around a bid by SNC-Lavalin for a $10-million contract to manage the construction of Bangladesh's multibillion-dollar Padma Bridge project, which was being financed by the World Bank.

In 2011, the World Bank brought those allegations, including information from four unnamed "tipsters," to the RCMP. Based solely on this information, the Mounties obtained permission to wiretap conversations. The RCMP then raided SNC-Lavalin's Oakville, Ont., offices in September, 2011.

In 2012, the RCMP laid bribery charges against two now former SNC-Lavalin employees: Mohammad Ismail, the company's former director of international projects, and his boss Ramesh Shah, a former vice-president of SNC's international division.

In 2013, it added charges against Kevin Wallace, who was SNC's vice-president of energy and infrastructure, and Zulfiquar Bhuiyan, a businessman with dual Canadian-Bangladeshi citizenship who was not an SNC employee but who is alleged to have been a representative of a senior Bangladeshi official, Abdul Chowdhury.

In court last year, lawyers for the men demanded that the World Bank hand over all of its files related to the case, including those the RCMP relied upon to secure its wiretaps. Production of these kinds of documents would be not be unusual in a routine domestic criminal case, to allow the defence to scrutinize a police investigation for using unreliable witnesses, such as those with an axe to grind, or for relying on flimsy information.

But the World Bank refused to participate in the court hearing on the issue, insisting that its status as an international organization grants it immunity and that it could not be compelled to turn over any documents.

In a decision issued last December, Ontario Superior Court Justice Ian Nordheimer sided with the accused, ruling that the World Bank had waived the immunity it would have been afforded under Canadian law by actively participating in the RCMP's criminal investigation.

Alan Lenczner, a Toronto lawyer acting for the World Bank in its Supreme Court challenge, said in an e-mail that the bank is concerned about preserving the anonymity of informants in anti-corruption probes, particularly in countries where whistleblowers are more likely to face reprisals: "For the World Bank, one of its main tools in combatting bribery of foreign officials is the information it receives from lower-ranking officials that their bosses are being paid to award contracts to companies."

Justice Nordheimer addresses this issue in his December ruling, saying that Canadian law already protects sensitive police sources and noting that two of the World Bank's four tipsters had already been deemed confidential informants in court.

Lawyers for the accused contacted by The Globe and Mail declined to comment publicly in detail on the case, as it is before the courts.

In a written submission to the Supreme Court, Toronto criminal defence lawyer Frank Addario, who is acting for Mr. Bhuiyan, accused the World Bank of showing disrespect to Canada's court system: "This case is about an unhappy litigant seeking another kick at the can, after opting out of the hearing below. Regardless of whether leave is granted, [the World Bank] is likely to do whatever it wants. It will only comply with a court order that suits it."

Last fall, Bangladesh's anti-corruption commission dropped its allegations related to the bridge project, saying it had not received enough information from the World Bank and Canadian authorities to proceed, according to local media reports.

No vote puts Greece, investors on edge
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Markets brace for volatility 6 Confusion over country's fate likely to provoke swings in days ahead
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By TIM SHUFELT
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Monday, July 6, 2015 – Print Edition, Page B1


Markets are bracing for a swell in global volatility as investors grapple with the consequences of the Greek referendum, which sets the country on a course to potentially exit the euro zone.

Greek voters rejected new austerity measures demanded by its creditors in return for additional funding, landing the country in a state of limbo over its membership in the currency union.

Confusion over Greece's fate is sure to provoke swings in asset prices in the days ahead, with the vote producing little in the way of a conclusive outcome. The Greek financial system is on the verge of collapse, its economy is shutting down and it's unknown how European leaders are likely to respond.

But unlike past episodes of the Greek saga, the market has so far met this latest flare-up with no small amount of resilience, reflecting some confidence that a potential exit of Greece from the euro zone will not amount to a global systemic shock.

"I think we're mildly vulnerable, but it's just a different world than it was three or four years ago," said Doug Porter, chief economist for the Bank of Montreal. The global economy is stronger and European officials have made strides in strengthening the institutions of the euro zone to limit the spread of financial contagion from Greece.

"That's not to say we won't see a reaction on Monday," Mr. Porter said. "But I suspect it will be a fraction of what we would have seen even two years ago."

And yet the potential for material declines in asset prices is far from remote, as the Greek vote comes to bear on global investor confidence.

"If this historic No win is confirmed, look initially for a general selloff in global equities, along with price pressures on the bonds issued by Greece, other peripheral euro zone economies and emerging markets," Mohamed ElErian, the former chief executive at Pacific Investment Management Co. and current chief economic adviser at Allianz, posted on social media on Sunday.

Such an investor reaction would resemble the week just past, which saw headlines dominated by the bombshell referendum announcement.

In response to heightened risk, the premium that investors demanded to hold peripheral euro zone government debt rose, but just barely. Italian and Spanish yields each rose on the week by a meagre 10 basis points to 2.24 per cent and 2.20 per cent, respectively. In 2011 and 2012, when the European debt crisis consumed global markets, those yields rose to higher than 7 per cent.

A measured investor response also registered on the VIX index, which is a gauge of global volatility. It rose to 16.8 by the end of the week, which was up by 20 per cent, but from an extremely low base. By contrast, the so-called fear index topped out at 48 in August, 2011.

Perhaps most remarkably, the euro was virtually unchanged on the week, and even rose marginally on Monday.

"I think there is a view that others would not follow Greece out the door if it did leave," Mr. Porter said.

Previously, losing Greece from the currency union was seen as an existential threat to the euro, for fear that a precedent might be set that other larger, more important euro zone members might follow.

Were Greece to leave the euro zone, not only could it avoid the kind of punishing austerity tied to its bailouts, it could also reap the benefits of a devalued currency - options that might start to look good to Portugal, Italy or Spain.

But those countries have stabilized in the intervening years. "If anything, the chaos we've seen in Greece might make it less likely for others to follow their lead," Mr. Porter said, suggesting the euro is drawing strength from Greece seeming more and more like a special case.

Bond investors, meanwhile, seem to have taken comfort in the efforts of the euro zone to ring-fence Greece. Most Greek government debt is now held by institutions rather than banks, and the European Central Bank promised to do whatever is necessary to prevent a euro zone collapse.

On Sunday, the European Central Bank reaffirmed that pledge: "In the current circumstances of great uncertainty in Europe and the world, the ECB has been clear that if we need to do more we will do more. We will find the necessary instruments."

Trade issue could expose the real NDP
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By BARRIE MCKENNA
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Saturday, June 27, 2015 – Print Edition, Page B1


OTTAWA -- It's been nearly three decades since Canadians fought an election over trade.

The 1988 campaign, dominated by the Canada-U.S. free-trade agreement, put the country on a path toward more open borders.

Once on opposite sides of the debate, the Conservatives and Liberals are now unabashedly pro-free trade.

Even the NDP, a party with deep anti-trade roots, has moved cautiously toward the political middle on the issue. It endorsed the recent free-trade pact with South Korea and welcomed the completion of negotiations with Europe on the pending Comprehensive Economic and Trade Agreement (CETA).

But the NDP has been conspicuously vague about where it stands on the Trans-Pacific Partnership - a massive free-trade zone spanning a dozen Pacific Rim countries with a combined economic output of $28-trillion (U.S.).

The TPP is no longer an abstraction. U.S. President Barack Obama secured "fast-track" trade negotiating powers from Congress this week after a protracted political battle, clearing the way for the possible completion of TPP negotiations before the Canadian federal election in October.

The deal could now emerge as the sleeper issue in the campaign.

Prime Minister Stephen Harper dispelled any lingering doubts about his commitment to the deal, saying Thursday that joining the TPP is "essential" for the Canadian economy.

The Liberals also back the TPP. But Liberal Leader Justin Trudeau called this week for re-engaging with often-ignored NAFTA partner Mexico and repairing strained relations with the United States, the destination for roughly threequarters of Canada's exports.

NDP Leader Thomas Mulcair has been much harder to pin down. In a major economic speech earlier in June, Mr. Mulcair talked about boosting exports, but never once mentioned the TPP or other trade agreements.

The NDP's platform and its track record suggest an agnostic attitude toward these deals. The party's decisions suggest a more protectionist bent than either the Liberals or the Conservatives.

The NDP's official platform emphasizes "fair trade" rather than "free trade," suggesting highly qualified support for trade agreements. The party opposes investor-state provisions, which allow companies to sue governments for unfair treatment, even though such rules are an integral part of NAFTA, CETA and the TPP.

The NDP also wants to renegotiate NAFTA to better protect Canada's investment and energy security. The party platform talks of "regulating the flow of international capital" and preserving the right of municipalities and provinces to continue steering contracts to local suppliers.

These positions put the NDP at odds with elements of both CETA and the TPP. The deals will open up vast areas of government purchasing, improving the access of Canadian companies to local government contracts in Europe, and vice versa.

The NDP also has a seemingly contradictory position on two persistent trade irritants with the United States: Buy American purchasing rules and a U.S. countryof-origin meat labelling law, recently declared illegal by the World Trade Organization because it treats Canadian and Mexican meat unfairly.

The party has been highly critical of these protectionist policies.

And yet, senior NDP MPs have backed legislation that would impose similar measures in Canada. For example, NDP trade critic Don Davies introduced a countryof-origin food labelling law in 2009 that would have covered all food and ingredients. Also in 2009, NDP Opposition House Leader Peter Julian introduced a bill to "give preference" to Canadian products in contracts paid for with federal transfers to provinces and municipalities.

The NDP is not alone in having awkward trade policy inconsistencies. All three parties continue to defend the supply management system, which shields Canadian dairy, chicken and egg producers from foreign competition with prohibitive tariffs.

And Mr. Harper reiterated that support this week, insisting the government is "working to protect our system of supply management," even as it pursues entry into the TPP.

The good news for voters is that a TPP deal would force all three parties to lay their cards on the table, prior to the election.

The government must now decide how far it's willing to go to defend dairy and chicken farmers.

For the NDP, the choice is to stand with the government or make trade a wedge issue.

The 12-year doughnut fight
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Legal saga offers cautionary tale of pitfalls of franchisee-franchisor relationship
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By BERTRAND MAROTTE
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Monday, June 29, 2015 – Print Edition, Page B1


MONTREAL -- Dunkin' Donuts' pink-and-orange double-D logo was once so ubiquitous in Quebec the U.S. fast food chain was dubbed "The McDonald's of Doughnuts."

At its peak at the end of the 1990s, the maker of Munchkins (Dunkinese for Timbits) boasted 210 outlets in La belle province.

That's now down to four. Meanwhile, Tim Hortons Inc. has more than 600 outlets and continues to expand.

The crumbling of the Dunkins empire in Quebec at the hands o f Tim Hortons is a cautionary tale about the potential pitfalls of the franchisee-franchisor relationship. In 2003, a group of 21 fed up franchisees operating 32 outlets launched a suit against the franchisor - then owned by Allied Domecq PLC - alleging it let them down by not providing the needed backing to fight the Tim Hortons juggernaut in the 1990s, and by generally failing to support the brand in the Quebec market.

The action wound its way through the courts for more than a decade as the franchisor - now Dunkin' Brands Canada Ltd. - fought back every step of the way. Quebec's three-judge Court of Appeal recently upheld a lower court judgment that Dunkin' Brands breached its duties in failing to protect and enhance the brand. Dunkin' Brands was ordered to pay the franchisees about $11-million for its behaviour and failure to act.

But the fight is not necessarily over. Dunkin' Brands, based in Canton, Mass., said earlier this month it is seeking leave to appeal the decision in the Supreme Court of Canada.

The court usually takes about six months to decide whether or not to grant leave to appeal.

Guy Pratte, the lead lawyer for Dunkin' Brands' Supreme Court action, declined to comment on the case. But in its presentation to the appeal court, the franchisor argued that Quebec Superior Court mistakenly imposed upon it "a new unintended obligation to protect and enhance the brand, outperform the competition and maintain indefinitely market share." The judge, Justice Daniel Tingley, ruled it was incumbent on the franchisor to take reasonable measures to defend the brand.

"The collapse of the Dunkin' Donuts chain may well have no match as a financial misfortune in the annals of the quick-service restaurant business in Quebec ... but nothing in [Justice Tingley]'s account of the Franchisor's obligations was 'unprecedented' or even demonstrably wrong-headed ... " Justice Nicholas Kasirer wrote in the Court of Appeal decision.

Even if the Quebec judgment doesn't make it to the highest court in the land, it remains a landmark decision certain to influence future litigation over the rights and obligations of signatories to franchise agreements, says Toronto-based Ned Levitt, an expert in franchise law.

"Frankly, going after a franchisor and being successful because he didn't support the brand properly is precedent-setting," he said.

Toronto-based franchise lawyer Jennifer Dolman plays down the impact the case is likely to have outside Quebec. "This is a Quebec decision and it's not binding on courts outside [the province]," she said, adding that it is entrenched in the province's unique civil law code. "I strongly disagree with the notion this is some radical game changer."

Counsel for the franchisees, Frédéric Gilbert, says their 12year saga is a striking illustration of what can happen when those who signed on in good faith and held up their end of the bargain are left hanging by a franchisor.

"They were completely abandoned. This is a case study of a disaster."

TELLING NUMBERS

11,300 Number of outlets Dunkin' Donuts operates in 36 countries worldwide .

4 Number of outlets Dunkin' Donuts operates in Quebec, down from 210 at the end of the 1990s

$9.8-billion (U.S.)

Franchisee-reported sales for Dunkin' Brands Group Inc. at the end of 2014

Associated Graphic

The collapse of Dunkin' Donuts in Quebec serves as a 'case study of a disaster.'

CHRISTINNE MUSCHI FOR THE GLOBE AND MAIL

Cenovus in $3.3-billion Teachers deal
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By CARRIE TAIT, JACQUELINE NELSON
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Wednesday, July 1, 2015 – Print Edition, Page B1


CALGARY, TORONTO -- Energy & Resources

Cenovus Energy Inc. has agreed to sell its mineral-fee-title lands and promised the buyer a slice of its future revenue in a multibillion-dollar deal that will inject much-needed cash into its coffers.

The company will collect $3.3billion from Ontario Teachers' Pension Plan in exchange for 4.8 million acres and agreeing to pay the pension fund royalties tied to operations from three separate projects, according to a statement it released Tuesday.

The deal's architecture demonstrates how depressed oil prices and damaged balance sheets are forcing companies to be creative in order to fund projects and protect dividends.

Cenovus had disclosed its desire to cash in on its mineralfee properties, whether through an initial public offering or sale.

But the decision to hand over a percentage of its future revenue was not a strategy it discussed publicly.

"It is tough to argue with $3.3billion of cash," said Justin Bouchard, an analyst at Desjardins Securities in Calgary. "So from that standpoint, it is a big deal, it is a good deal for Cenovus.

They needed the cash."

But "the price that they received for that package of assets is perhaps lower than what you would have expected," considering Cenovus will hand Teachers part of its future revenue, he said. "It is exchanging a very long cash flow stream for a lump-sum upfront cash payment."

The government does not receive royalty payments from oil and natural gas produced on socalled mineral-fee-title lands, making these assets more valuable to the landowner. These properties are royalty-free because of legacy deals stretching back to the 1880s, when Ottawa gave land to Canadian Pacific Railway. The properties' royaltyfree status remains intact despite the land changing hands over 130 years.

Firms, however, can collect royalties from other companies in exchange for permitting them to produce oil and natural gas on any type of land they control. Indeed, Cenovus has agreed to pay Teachers' a 9-per-cent royalty on its production on the fee land package, as well as so-called gross overriding royalties on revenue stemming from its Pelican Lake project in Northern Alberta and its efforts in Weyburn, Sask.

The gross overriding royalty at Pelican Lake will be 3 per cent, and 5 per cent on Cenovus's 50.4per-cent stake at Weyburn, the oil sands company said. The deal is expected to close in July.

Ziad Hindo, who manages the tactical asset allocation and natural resources portfolios at Teachers', said the commodity crunch worked in the pension fund's favour.

"We view this acquisition as very opportunistic. We are capitalizing on the sell-off in energy prices and energy assets over the past year," Mr. Hindo said. "It will produce cash flows for a very long period of time, so it has a very long duration, which is a good match against our liabilities that also have very long durations."

Brian Ferguson, Cenovus's chief executive officer, said in a statement that the agreement "captures significant value" from its mineral-fee-title properties in Alberta, Saskatchewan and Manitoba. The $3.3-billion will buffer the company's balance sheet and give it the ability to invest in other projects, Mr. Ferguson said. The company has cancelled its expansion projects, cut its budget, laid off 15 per cent of its work force, offered shareholders the right to reinvest dividends at a discount and raised $1.5-billion through a bought deal, as it grapples with low commodity prices.

Cenovus Energy (CVE) Close: $19.97, up 17¢

By The Numbers

4.8 million Number of acres of royalty and mineral fee title lands in Alberta, Saskatchewan and Manitoba held by Heritage Royalty Ltd. Partnership

$320-million Heritage Royaltly Ltd. Partnership's 2014 revenue

14,800 Heritage Royalty Ltd. Partnership's average production in barrels of oil equivalent a day

Associated Graphic

John Sopinski/The Globe and Mail Source: Cenovus INC.

FIRST IMPRESSIONS
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Excited Edmonton fans finally get a glimpse of 'Second Coming' Connor McDavid - who is similarly awestruck, Marty Klinkenberg reports
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By MARTY KLINKENBERG
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Saturday, July 4, 2015 – Print Edition, Page S1


EDMONTON -- THE PROSPECT A season with teenage Canadian hockey sensation Connor McDavid, and his impact on the Oilers, the NHL and the city of Edmonton.

A line snaked 300 metres from the front doors through the parking lot at Rexall Place at 8:45 a.m. Friday, 21/2 hours before Connor McDavid was scheduled to appear.

Children played tag around a bronze statue of Wayne Gretzky while their parents, dressed in new No. 97 hockey sweaters, stood baking in near-30 C heat.

The Oilers usually hold their six-day rookie orientation camp in a small rink on the outskirts of Edmonton but moved the training sessions to their home arena to accommodate fans eager for a first look at the 18-year-old who is shouldering the hopes of this city and its long-suffering team.

So many spectators showed up - and so early - that employees of the former Northlands Coliseum waded out into the throng to hand out free popcorn and bottles of water as a thank-you gesture.

"This is the second coming," said Angel David, a long-time Oilers fan and season-ticket holder.

"There was Gretzky, and then there is Connor."

There is no mistaking that the shiny-faced No. 1 draft pick has Edmonton in a tizzy. Friday was the third day of camp but the first time proceedings were open to the public.

Approximately 3,500 turned out to watch McDavid and 30 other prospects participate in drills for a little more than an hour. Larger crowds are expected at practice sessions on Saturday and Sunday, and on Monday night, when the camp concludes with a scrimmage.

The lower bowl at Rexall Place was half full when McDavid, showing a flair for the dramatic, skated onto the ice last in a long line of players and right into the faithful's hearts. The crowd erupted at his sight and within seconds was chanting - "Connor, Connor, Connor." They cheered wildly as one of his first shots clanked loudly off the crossbar.

"It was awesome," McDavid said, describing the moment he realized a throng had turned out to greet him. "I didn't know what to expect. It was just a normal practice. People here are excited and it is nice to see that."

Only a few hours earlier, the Oilers locked up McDavid for three years, signing him to an entry-level contract as the most anticipated player to enter the sport in at least a decade. He recorded 285 points in 166 games for the Erie Otters of the Ontario Hockey League in three previous seasons, drawing comparisons to the Great One and Sidney Crosby.

The Oilers, of which a nine-year playoff drought is the longest in the NHL, won a lottery to secure the right to pick McDavid with the first choice in the June 26 draft. It is the fourth time in six years the team has picked first and this time a new general manager and coaching staff has been brought in with him.

"It feels surreal that we have this guy here," said Randy Fernandez, a season-ticket holder for three years. His children, ages four, six and eight, stood beside him, tugging at their orange McDavid T-shirts. "The odds of winning the lottery weren't in our favour, but it looks like the hockey gods were looking out for us."

Twenty-three banners hang from the rafters at one end of Rexall Place, honouring the division and league championships and five Stanley Cups the team won between 1984 and 1990. Retired jerseys of seven players hang at the other end - but all are from the Gretzky era. It is as if the team has been frozen in the past.

"The Oilers have a history that's rich and that's deep and that's strong, and is something we'll never escape," said head coach Todd McLellan, who came to the Oilers this spring after leading San Jose to the playoffs six times in seven years. "But our group is about creating its own history.

The past doesn't drive the future.

We have to drive our own future."

McDavid, a 190-pound centre who skates as if he is rocket-propelled and effortlessly dangles and dekes his way through defencemen, is the centrepiece around which McLellan is building the team. The teenaged prodigy talks as if he's uncertain of his status, but McLellan expects him to be in the lineup when the 201516 season begins in St. Louis on Oct. 8.

"He talks about 'making the team' because he is a very respectful young gentleman and he understands that he has to earn it," McLellan said. "But I expect him to push forward and play for our hockey club next year, and I think, in his heart, he does, too.

His skills are remarkable and he is a very humble, focused young man who does things right, and that's tough for an 18-year-old to do."

The Oilers' brass in the past two days has gathered at one end of the rink and watched his every move. "It's hard for your eyes not to find 97 to see what he is up to," McLellan said.

The franchise is in search of a new identity, one that includes winning. Fans who are tired of losing feel they deserve better - and are convinced a new day has dawned.

"I was at home at dinner the night they won the lottery," said Bob Stauffer, the commentator during Oilers games and a talkradio host. "My wife says it is one of only two times she has ever heard me scream. The other was when Sidney Crosby scored the winning goal [in the 2010 Olympics]."

On Friday, fans cheered McDavid when he passed the puck, when he deftly directed a shot through the goalie's five-hole and even when he missed. They oohed and ahhed when, at the end of a drill, he balanced the puck on the end of his stick.

On a weekday morning, thousands came and cheered, and cheered some more.

"These people have been dying to get their first glimpse of him," said J.J. Hebert, the Oilers' senior director of media relations and communications. "It shows how passionate they are."

In Edmonton, the McDavid era has begun.

Follow me on Twitter: @globemartyk

Associated Graphic

The Connor McDavid era has begun in Edmonton.

JASON FRANSON/THE CANADIAN PRESS

Connor McDavid, the first overall pick in the 2015 NHL entry draft, takes part in the Edmonton Oilers orientation camp in front of fans in Edmonton on Friday.

JASON FRANSON/THE CANADIAN PRESS

Fewer mind games, more winning games
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Team Canada's lacklustre performance was proof that motivation without talent is as useful as a parachute without shoulder straps, Cathal Kelly writes
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By CATHAL KELLY
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Monday, June 29, 2015 – Print Edition, Page S1


TORONTO -- Throughout their disappointing World Cup, the Canadian team wanted it both ways.

They told people they weren't very good. Players and coach said that over and over again. At the same time, they thought they had a chance to win it.

It got harder to hold on to those opposing ideas as things went on, but Canada's confidence seemed to grow.

They couldn't score, but, to hear them tell it, that wasn't a problem. They made terrible errors at the back, but that wasn't an issue either. Couldn't get organized; very little skill on the ball; Christine Sinclair aside, no star quality whatsoever - nope, nope, nope. All good. Just trust us.

Maybe this bafflingly upbeat approach in the face of so much evidence to the contrary was the result of time spent in coach John Herdman's famous Brain Room. If so, perhaps somebody needs to build a Practice Room, and spend a little more time in there. This team was proof that motivation without talent is as useful as a parachute without shoulder straps.

Canada played five games over three weeks, looking out of sorts for long stretches in every one of them.

Despite all the time in the world to make adjustments or tinker with the roster, it never got any better. It just was. And not in the good Zen way.

The bulk of this team has been together for a decade. They play like they just met in the tunnel mouth, and have decided they don't like each other very much.

There was one breach of the Great Wall of Positivity, when former Canadian player and current Fox TV analyst Christine Latham reported she'd been told there was dissent in the camp. Everyone rushed to jump on Latham's head for making up stories, but she was plainly right. If the verbal shiftiness of Canada's denials wasn't enough to convince you, the way they (don't) play in concert should have been.

Thanks to FIFA fixing the draw in their favour, they managed to avoid all the good opponents.

But as soon as unimpressive England decided to put the shoulder in, Canada folded.

The English team is Canada's mirror image - up-for-it, unskilled and unapologetically brutish. The difference was they put their best 11 on the field.

Ticking off his locker-room debts, Herdman ran out a series of veterans who didn't belong in the game. Don't blame Lauren Sesselmann for taking a header over the ball on the first goal.

Blame Herdman for putting her in a position to fail, when he should have acknowledged she was mentally shot after an errorridden tournament.

The game was decided when Herdman opted to field a London Olympics Dream Team instead of one designed to win.

He'll face the same decision at Rio 2016. He can't make the same mistake twice. The old guard should be thanked for its long service, and then gently pushed out the door. Now. The longer he waits, the harder that will get.

That's what makes a battling 2-1 loss such a disaster. It will allow some elements in the Canadian soccer set-up - including players - to convince themselves they were right there.

They never were. They weren't even close.

The best sides in the world - Germany, France, Japan, et al - are getting better. Canada is standing still.

Saturday's choppy, thuggish game had one great moment, very early on. Christine Sinclair took the ball on the flank, nutmegged two successive English players, moved infield and sidefooted an inch-perfect 40-yard pass to Melissa Tancredi.

It was incredible stuff from Canada's only incredible player.

As Sinclair was fading into nothingness during the second half, you realized no one else has anything approaching that level of ability. Young, old, in-between - they're all her mediocre children.

As age catches her up, Sinclair is becoming this program's Ozymandias - look on her works, ye mighty, and despair. Nothing beside remains.

The main point of this tournament was proving that Canada has something besides Sinclair to look forward to. This was where the program established a beachhead to the future. From that perspective, it was a failure.

Canada has many fine young players - Kadeisha Buchanan, Ashley Lawrence, Jessie Fleming.

But they're all tireless, complementary types. There's no cunning to any of them.

Buchanan and Sinclair aside, there isn't a single Canadian player who would make - never mind start for - Germany or France. They lack the basic skills and smarts, the sort of training that starts at a kindergarten age.

Based on Herdman's demonstrable faith in the next generation (i.e. none at all), it isn't getting any better. In four years, the best in the world will have begun to lap us.

So if any good is to come of this World Cup, it is the death of Canada's we-think-we-can, wethink-we-can approach. It doesn't work.

It's not Herdman's job to convince a bunch of jobbing pros they're 1970 Brazil. Nor is it his task to create a happy soccer family. He's not a hypnotist or a therapist, and he should stop talking like one.

It's his job to pick the best players, regardless of allegiances and intrasquad cliques, and show them how to win.

We could have a long discussion here about developmental techniques, grassroots funding and domestic pro leagues, but it's largely pointless. Money follows success. Nobody's going to spend the money until the senior team is successful. And it's headed in the other direction.

Don't ask taxpayers to save Canadian soccer. It's on the players to do that for themselves. They'll have one more chance at next summer's Olympics. If they blow that as well, people will start to forget about them. This tournament, powered by the memories of 2012, will have been the highwater mark.

Knowing that should be all the motivation this team needs.

Follow me on Twitter: @cathalkelly

Associated Graphic

From left to right, Canada's Josée Bélanger, Christine 'inclair, Melissa Tancredi and Ashley Lawrence react after losing 2-1 to England in a quarter-final S game at the FIFA Women's World Cup in Vancouver on Saturday.

DARRYL DYCK/THE CANADIAN PRESS

Toronto bats provide the Canada Day fireworks
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By CATHAL KELLY
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Thursday, July 2, 2015 – Print Edition, Page S1


TORONTO -- ckelly@globeandmail.com

On the occasion of Canada Day, Blue Jays manager John Gibbons wanted to congratulate his Canadian friends on their "independence."

Owing to our limitless national small-man syndrome, it had to be pointed out that we are not, technically, independent. The Queen and all that. This involved a short primer about 1867.

Gibbons is an enthusiastic student of history. He was all solicitous attention until someone went there.

Someone: "That was about 50 years after we beat the Americans." Gibbons: "I don't think you want to try that again."

Commence aux festivales! That's what Canada Day is all about at the old ballpark now - us trying to out-America America.

This year, they unfurled a flag so large, they could not open the roof of the Rogers Centre, for fear it would catch the wind like a sail and go flying into the rafters with several dozen unlucky bearers still hanging on.

Elsewhere, the twin polarities of the Canadian experience - Don Cherry and a guy in dress greens - were doing the opening honours. The soldier, LieutenantGeneral Guy Thibault, gave Gibbons a medallion of his office - vice-chief of the defence staff.

Gibbons kept the bauble in his pocket for the entire game. For the next little while, he might want to hang on to it. On Wednesday, we saw the Blue Jays at the absolute best they can be in an 11-2 win over the Boston Red Sox.

The win was so comprehensive, so lacking any need for explanation; Gibbons began his post-game presser with, "Are we going to start with the Phil Kessel trade?" First, starter Mark Buehrle, who really ought to be given to science rather than allowed to retire. The years pass, and Buerhle just gets better.

Ahead of the game, general manager Alex Anthopoulos was musing about the future of touted prospect Daniel Norris, who may return from Buffalo in the next few days for a spot start.

Though he's only 22 and ought to have expected it, Norris was apparently emotionally unwound by an early season demotion to the minors. Anthopoulos said he's only just starting to get over it.

Perhaps they ought to have Norris spend a little time in Buehrle's company. There wouldn't be any talking, but nor would there be any worrying.

Buehrle wears his constructive apathy like armour.

He's so blasé he might be legally deceased.

On Wednesday, Buehrle allowed only one run over seven innings, running his record to 9-4. He has the knack of not feeling the need to pitch to a score. Win or lose, Buehrle is indifferent to results. They pay him to pitch, so he pitches.

He's toweringly disinterested in engaging questions about why, aged 36, he is still so effective.

"I'm feeling good. I can't tell you why I'm feeling good," Buehrle shrugged. "I'm not going to try to figure out why ... I don't like to ask too many questions."

Yes, questions. They ruin everything. In the words of one of the great men of our age: "You see, the problem is communication. Too much communication."

After taking a few days off, Buehrle's outing was overshadowed - again - by the offence.

The Jays scored seven runs in the first two innings - as many as they'd scored in the previous four games. If it were possible to feel sorry for anyone from Boston - and it isn't - you'd have felt sorry for Red Sox starter Rick Porcello. He gave up three home runs in those two innings, and looked like he was seriously considering pulling himself.

Toronto hit five home runs in all, the most remarkable of those by infrequent first baseman Justin Smoak. His second long ball of the day ended up in an empty luxury box on the fourth deck.

When Edwin Encarnacion pointed out the landing spot to teammate Dioner Navarro,

Navarro crossed his arms over his chest in a 'Saints preserve us!' gesture. It was that long.

This was the 14th game of the year in which Toronto scored at least 10 runs. That matches its best mark since 2009. And we're still nearly two weeks from the all-star break.

"In 2010, when I was with Texas, being in that offence, it was really good [fifth best in the majors]. This one's a lot better than that one," Smoak said.

Toronto now leads the major leagues by nearly 70 total runs.

Despite their up-and-down pitching, the Jays maintain the second-best run differential in the game.

While we're celebrating that, we might recall that the 1931 Yankees - Babe Ruth, Lou Gehrig, et al - scored 1,067 runs in 153 games. That's an average of nearly 7 runs a game. (Toronto stands around 5.5 a game.)

Those Yankees still finished 131/2 games behind the Philadelphia Athletics and missed the playoffs.

So ... pitching.

On that score, Anthopoulos said he continues to explore trades. He is still more interested in a starter than bullpen help, but he'll take both if he can. He isn't inclined to exchange prospects for a rental, but he'll listen to all offers. He isn't close to doing anything. He anticipates nothing - and wouldn't tell us if he did.

So, as far as the future is concerned for this ball team, more of the same.

But it was easy to forget all that amid the ease of a sunny day at the ballpark, and a little harmless jingoism.

When it goes right for this team, man, they are fun to watch.

Follow me on Twitter: @cathalkelly

Associated Graphic

Blue Jays left-fielder Ezequiel Carrera makes a diving catch to rob Boston's Mookie Betts of a third-inning hit on Wednesday.

FRANK GUNN/THE CANADIAN PRESS

Quebec City bid in focus as governors mull expansion
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By ERIC DUHATSCHEK
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Thursday, June 25, 2015 – Print Edition, Page S1


eduhatschek@globeandmail.com .

So now, it begins.

After years of deflecting, dismissing and otherwise discouraging all talk about possible expansion, the NHL board of governors gave commissioner Gary Bettman the green light to explore what a 31-, 32- or even a 33-team league might look like.

The first and most obvious beneficiary of Wednesday's announcement in Las Vegas will be the actual Vegas group bidding for an expansion franchise, which has a new 17,500-seat arena set to open in the spring of 2016. Las Vegas checks the three primary boxes to qualify for expansion: It's a market that helps expand the NHL's footprint, its state-of-the-art arena can spin off bags of money and it has a stable, wealthy ownership group.

Officially, Bettman expressed his usual amount of caution, saying that just because the league is exploring an expansion strategy doesn't necessarily mean it will expand.

Formal applications, available after July 6, must be submitted by Aug. 10. The applications will then be turned over to the NHL's executive committee for review. Though no expansion fee has been set, Bettman said his indications from the board were that they wouldn't be interested in moving forward unless the fee began with a five.

Translation: It'll cost $500-million (U.S.) or more to get in the door.

In the previous round of expansion, phased in over a three-year period between 1998 and 2000, the four new teams (Minnesota Wild, Columbus Blue Jackets, Atlanta Thrashers and Nashville Predators) paid $80million each to join the league.

"With all the well-chronicled expressions of interest, let's see what we get when you're required to sign on the dotted line on a formal application," Bettman said.

Bettman spent most of his time answering questions about businessman William Foley, who with the NHL's blessing has already conducted an exploratory season-ticket drive in Las Vegas.

Bettman was on hand in February, when Foley launched the drive, which attracted more than 13,200 refundable deposits for season tickets.

Despite the spin from league officials Wednesday - Bettman insisted that Foley had to file the same paperwork as any other potential bidder - the expectation is not if Foley and Co. will land an expansion franchise, but when that might happen.

Bettman said he was impressed by the work the Vegas group has done to date, but cautioned: "There is no list, there's no priority, there's been no determination other than 'we've been listening for a while, let's take a look.' Expansion is a serious and important business decision. You don't do it frivolously."

There is less certainty beyond Vegas, however.

Quebec City would be a logical choice, because it has an established fan base, a new 18,500seat arena opening in September and a well-heeled prospective owner.

From an NHL perspective, the problem with Quebec City, or any other potential Eastern Conference candidate, is its geography.

With 16 teams already operating in the Eastern time zone, the NHL would ideally prefer to put two more teams in the West, for a balanced 32-team league.

Vegas and a team in the U.S. Pacific Northwest would fit the bill. Seattle and Portland have both been linked to NHL expansion in the past, though neither city is anywhere nearly as close as Quebec City to putting together a viable bid.

At some point, any number of groups representing the Greater Toronto Area may also come out of the woodwork, though Bettman has always been lukewarm about that possibility.

Deputy commissioner Bill Daly said the earliest possible date when an expansion team could begin play would be the 2017-18 season.

Expansion fees - a potential $1-billion windfall - flow to team owners under terms of the collective bargaining agreement.

The value to the players association is the increased number of jobs. Many teams, meanwhile, regard the next expansion draft as an opportunity to dump unwieldy contracts on their new partners.

Quebec City's bid will presumably benefit from the recent history in Winnipeg. The Jets lost their team in 1996 to Phoenix, but an ownership group spearheaded by Mark Chipman was able to bring the NHL back to Winnipeg in 2011 by purchasing and relocating the Atlanta Thrashers.

Since then, the Jets have been a smashing box-office success, even though their overall market is small by NHL standards.

If a well-run team in a popular hockey market can succeed in Winnipeg, the thinking goes, the same thing could happen in Quebec City, which lost its previous team to Denver in 1995.

Bettman said he knew of "at least one" Quebec group that's interested in applying for an expansion team.

"If somebody else is interested, we'll find out in the next few weeks," he added.

Foley hasn't said anything lately about the process, aware that the NHL prefers its prospective owners to be discreet until it is time to cut the cheque. But back in February, Foley proclaimed his intentions without ambiguity: "We have the arena and we have strong ownership.

Now it's our job to convince the NHL that Las Vegas is ready for hockey."

Quebec City might be a tougher sell, although there may be some creative solutions to the conference alignment. One would be to ultimately go to three, 11-team conferences. Another would be to divide up the NHL along the same lines as the NFL into eight four-team divisions, and do away with the conferences altogether.

However it plays out, the end game - a 32-team league - came one step closer Wednesday. And you can be sure the mechanics of putting a team back where it belongs in Quebec will start in earnest now.

For better or worse, pain is coming to Leafs
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Contract shedding has yet to begin, but there's plenty of time for that
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By JAMES MIRTLE
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Wednesday, July 1, 2015 – Print Edition, Page S1


jmirtle@globeandmail.com

Mike Babcock told you there would be pain.

You believed him, of course.

Then again you wanted the kind of pain the respected coach seemed to be talking about - the kind that would see all those underperforming, no-good Toronto Maple Leafs punted out the door of the Air Canada Centre with nothing but a "Will Play for Food" sign.

It hasn't happened.

It may not - not in the near future, anyway.

And that, in its own weird way, may be its own kind of pain for Leafs fans who are tired of this group of players.

The Leafs head into free agency on Wednesday without much turnover on a roster that finished fourth from the bottom in the NHL last season. They have nine forwards, seven defencemen and two goalies that were there a year ago, provided they get the three restricted free agents signed.

That means $25-million (U.S.) in salary - more than a third of their cap space - dedicated to captain Dion Phaneuf, leading scorer Phil Kessel, Joffrey Lupul and Tyler Bozak, the veteran core that many in Toronto believed would be dynamited well before July 1.

Two weeks after the Stanley Cup was given out in Chicago, they're still there. The rumour is most will be staying, with interest on the trade market tepid at best.

As a result, other teams around the league, and fans in the Greater Toronto Area, are wondering what on earth the Maple Leafs are doing. Where is the deconstruction that was promised? Where's the pain?

President Brendan Shanahan has cautioned again and again that it is going to take incredible patience to rebuild the Leafs, especially in this market, which has the attention span of a gnat.

At the moment, the Leafs are trying to wait out the market, watching as big pieces such as Brandon Saad are moved in massive deals (as he was to Columbus late Tuesday) and hoping they benefit from the fallout.

The fallout in this case? The Penguins missed out on Saad, their preferred option for help on Sidney Crosby's wing, so they move on. Potentially on to someone like Kessel.

The Leafs are not going to be good next season, but in a sense that buys them some freedom.

They can take back junk in a deal such as the rumoured one with Pittsburgh, gladly accepting Chris Kunitz and Rob Scuderi as long as a talented young player comes with them.

They can also experiment in the free-agent market. The Leafs appear to have two strategies there.

1. Look at young players - primarily forwards, given how many bodies they have on defence after adding Martin Marincin - who can be signed for a reasonable dollar value for three to five years and be part of the solution, taking the roles of Kessel, Lupul and others whenever the bloodletting does begin.

Michael Frolik is a potential option in this category, although the Leafs could get priced out there. Players such as Cody Hodgson, Shawn Matthias and Erik Condra could be as well.

2. Look at stopgaps, like they did with Dan Winnik and Mike Santorelli last year, bringing in value players on one-year deals and flipping them for picks at the trade deadline. Those likely come after waiting out the July 1 frenzy.

The rebuild is in that. It was in what the Leafs did at the draft, acquiring extra picks and a young defenceman (Marincin) who can play in their top six next season.

What it likely will not look like is the scorched-earth scenarios that Buffalo and Edmonton went through. This isn't going to be a 50-point team next season.

Leafs management won't come out and say it, but they believe the pain Babcock is talking about doesn't have to be nearly that absolute for the team to become a contender. They believe that Mark Hunter is a good enough bird dog and Kyle Dubas (aided by his team) is a good enough analytical mind that they'll find their share of hidden gems and win their share of trades.

The Leafs will probably move Kessel in the coming months for a package that includes a good young player. They can also easily dump a Lupul or a Bozak without much in return.

But they've picked high in three of the past four drafts - fifth, eighth and fourth over all - and have a minor-league franchise that appears to be on the rise.

The prospect cupboard isn't as bare as it was two or three years ago; there's the start of a foundation there.

The Leafs still intend to get very young. They still intend to be a team built through drafting and development. And patience still applies.

Especially when it comes to the more difficult aspects of the teardown, which is the phase the Leafs are working their way through now. What they get back is more important than when they pull the trigger, even if the audience is growing restless.

Next year, after all, is a writeoff, a season entirely in service to 2017-18 and beyond.

So there's going to be pain, all right. It'll be in the waiting. And in the hoping that doing things a little bit differently - in the front office and in the rebuild - pays off.

It's already started.

Follow me on Twitter: @mirtle

U.S. wins crown for third time by crushing Japan
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Carli Lloyd scores the tournament's fastest hat trick, including a spectacular goal from the halfway line, striking three times inside 16 minutes as the U.S. storms into an unexpected and unsurmountable lead over its shell-shocked opponents
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By DAVID EBNER
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Monday, July 6, 2015 – Print Edition, Page S1


VANCOUVER -- It was a demolition.

It was, for the winners, a coronation, one that was a long, long time coming.

It was, for the losers, a humiliation, the end of an era.

On Sunday in Vancouver, well before a warm afternoon ebbed into early evening, on the day after the Fourth of July, the United States - for the first time in 16 years - seized the Women's World Cup soccer championship.

This was not only a victory. It was a pronouncement. U.S. women's soccer isn't fading. It is renewed. And the rookie boss, coach Jill Ellis, is the savvy strategist.

The game was over as soon as it began.

There had been the idea that the United States was not the titan in women's soccer that it once was, that this re-re-rematch against Japan - a rivalry extending to the 2008 Beijing Olympics - was going to be a match of near-equals. That this could be something like 2011, when Japan upset the United States at the previous World Cup, or even like the 2012 Olympics, when the United States narrowly defeated Japan.

No. Not close at all, like the arcing distance over the Pacific Ocean from the United States to Japan.

Three minutes had not elapsed when, on a delightfully crafted set piece, Megan Rapinoe of the United States tapped out a seemingly innocuous corner kick, flat, the ball bouncing diagonally along the fake grass, into the centre of the penalty box.

Carli Lloyd, streaking to the ball like an F-16, put it home.

Barely two minutes later, on another set piece, a ball sent in from a free kick, Lloyd popped home another goal. The wildly pro-U.S. crowd of 53,000 at B.C.

Place, draped in every sartorial permutation of the American flag, went bonkers.

In the 14th minute, Lauren Holiday scored to make it 3-0.

The second goal was the dagger, the moment the match was over, Japan's life force not yet sapped but done for.

The fourth, however, was the bludgeoning.

It was the 32-year-old Lloyd, again, from barely over midfield into Japan's half, when she belted up a beautiful ball, spotting Japan's goalkeeper Ayumi Kaihori a step or two too far out.

The ball carried.

Kaihori retreated.

Lloyd's touch was perfect.

Kaihori, leaping backward, twisting, reaching, got a hand on the ball, but it was not enough.

"A hat trick in 16 minutes?" said a FIFA staffer. "I don't think that's ever been done before."

At the end: jubilation. The final tally was 5-2 - and one of Japan's scores was a U.S. own goal.

The United States has forever been one of the two best teams in the world in women's soccer, duelling with Germany. The Americans have won four of five Olympic gold medals. But the United States had not won a World Cup since the end of the last century. Abby Wambach, who came on as a substitute, late, had never won a World Cup.

Four years ago, the United States lost on penalty kicks to Japan, in an emotionally wrought match in Germany, only months after the tsunami and earthquake that had wracked Japan.

In this World Cup, the United States hacked through the much more difficult side of the draw and overpowered Germany in the semi-finals in the de facto championship match. It was a game marked by controversies but the 2-0 win was decisive, the Americans dominant. Japan didn't lose a single game on its side - and won its semi-final when England scored an own goal, late.

This Japan team came of age in 2008. Sunday marked the end of a team past its prime.

The Women's World Cup win was the third for the United States, the first since 1999. The country also won in 1991.

The big story was on the field, but the other story was who was there and who was not. Joe Biden, U.S. Vice-President, was there. Sepp Blatter, the FIFA president who would usually present the championship trophy, was not.

While the embattled Blatter plans to visit Russia for the July 25 qualification draw for the 2018 men's World Cup in Russia, he was advised by his lawyer not to venture to Canada. The spectre of arrest, amid the spiralling FIFA bribery scandal, hung in the air. "Until everything is clarified," Blatter said in comments to a German newspaper published on the weekend, "I won't take any travel risks."

The tournament was, however, considered a success.

Canada reached the final eight, which fit its No. 8 world ranking.

And Canada scored a big victory Sunday when Kadeisha Buchanan, the 19-year-old defender from Toronto who emerged as a star this past month, won the award for young player of tournament.

The tournament did not seize the attention of the host country but was a hit on TV, in Canada, the United States and abroad. Attendance at the stadiums, led by four games of more than 50,000 at B.C. Place, reached about 985,000. It was a record for FIFA events outside men's World Cups.

Associated Graphic

U.S. midfielder Carli Lloyd celebrates with teammates after scoring a first-half goal Japan in Vancouver on Sunday. The U.S. won 5-2.

MICHAEL CHOW/USA TODAY SPORTS

Who the Maple Leafs will draft at No. 4
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By JAMES MIRTLE
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Friday, June 26, 2015 – Print Edition, Page S1


jmirtle@globeandmail.com

It's a heated, organization-wide debate that will finally be put to rest Friday night: Who should the Toronto Maple Leafs take with the fourth pick in the 2015 NHL draft - the franchise's highest pick in 26 years, one they feel must absolutely turn out to be a superstar?

The pivotal decision has divided the front office for months, ever since Edmonton won the draft lottery and the Leafs learned that only three teams would be picking ahead of them.

Some in Leafs management like pint-sized London Knights forward Mitch Marner. Others are fans of big Boston College defenceman Noah Hanifin.

The two players have completely different in skill sets, backgrounds and development curves, so weighing the pros and cons gets complicated. And members of the Leafs' fourheaded management team all have different ideas about what kind of player is most vital to a team that's rebuilding.

Because this draft is deep in high-end talent, the teams picking after Edmonton and Buffalo - which will have no trouble choosing Connor McDavid and Jack Eichel, respectively - are in a bind, trying to determine which of the remaining players might be future stars.

Anyone taken fourth over all is expected to be a good NHL player. The Leafs, however, desperately need a great player, so they say they'll take the best player available, regardless of position.

Unsurprisingly, the main voice in the Marner camp is Toronto's director of player personnel, Mark Hunter. The former Knights general manager knows Marner intimately - he picked the forward 19th over all in the 2013 OHL draft and persuaded him to forgo a scholarship offer from the University of Michigan.

At that point Marner was 15 years old, 5 foot 7 and 130 pounds, and his size was the biggest reason he slipped to London at 19. Over the next two years, he grew four inches, added 30 pounds and rang up a terrific 126-point season to finish second in OHL scoring as a 17year-old.

Hunter's belief in him paid off.

He thinks it will again for the Leafs and he has support from colleagues such as Lindsay Hofford, one of the Leafs' newest scouts, who was the Knights' director of scouting when they drafted Marner.

They know everything about the player - his family, his habits, his progression - and they love him.

Marner is also likely to be available at No. 4 since the Arizona Coyotes are expected to take Dylan Strome third - if they don't trade that pick.

From the outside, it long appeared the Leafs' decision with the fourth selection would be between Marner and Strome, the top two OHL scorers. But the Leafs rate Strome fifth, while at four Hanifin has influential supporters in the organization, including head coach Mike Babcock, who covets his unique combination of size, speed and ability to move the puck out of the defensive zone.

Make no mistake, Babcock has become an important voice for the Leafs. In the five weeks since signing an eight-year, $50-million (U.S.) deal, he has been putting in 12-hour days, working and debating with the scouting staff and management over their choices.

His vision for how the Leafs will play mirrors his philosophy in Detroit and with Team Canada: He wants a team that moves and thinks fast and doesn't spend much time in its own end.

Strength on the blueline and at centre is paramount. A smallish winger? Not as much.

Two things, however, will push the Leafs in Marner's direction.

No. 1 is the fact he can play centre and enjoys the position.

It's not out of the question that, if he continues to develop - both in terms of size and skill - that's where he slots at the NHL level.

The other key factor is that Hunter is in Marner's corner.

Maple Leafs president Brendan Shanahan will have to break the deadlock - if there is one - at the draft table, and he made Hunter his draft and scouting guru for a reason.

He knows players, especially OHL players, and if he wants Marner that badly, he'll likely get his way.

The Leafs' decision could be made even easier if the Coyotes do trade their pick. The top team in the running for it is Columbus; the Blue Jackets are interested in moving up from No. 8 in order to take Hanifin.

If Hanifin goes at three, the Leafs won't have much deliberating to do.

But even if he doesn't, it may not matter.

The Leafs' list 1. Connor McDavid 2. Jack Eichel 3. Mitch Marner 4. Noah Hanifin 5. Dylan Strome Others well regarded by the organization if it can acquire another top pick: Ivan Provorov, Mikko Rantanen, Mathew Barzal.

Boyd's pitching implosion one to forget
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By DAVID SHOALTS
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Friday, July 3, 2015 – Print Edition, Page S2


TORONTO -- Matt Boyd should dedicate the second start of his major-league career to everyone who's ever had a bad day or night.

As bad nights go, the Toronto Blue Jays starter had one for the ages.

Funny thing, though. It didn't start out too badly for the 24-yearold. Boyd came out Thursday night at Rogers Centre and fired two strikes past the Boston Red Sox's leadoff hitter, centre fielder Mookie Betts. Then Betts singled to left. Well, okay, no real damage, and Boyd promptly went 0-2 on the next batter, second baseman Brock Holt.

That is when it went sideways.

Holt singled to left. Then shortstop Xander Bogaerts singled to centre. Next up was Big Papi, David Ortiz. You knew how that was going to go. Grand slam to left field. Then it was Hanley Ramirez's turn. He blasted a towering drive into the left-field seats for his 16th home run of the season.

Five batters, five runs. But it wasn't over yet for Boyd. The lefthander gave up another single, to Pablo Sandoval, broke his string of hits with a walk to Mike Napoli and it was 7-0 for Boston. Seven batters, seven runs and there still wasn't a single out. At that point, Jays manager John Gibbons came to Boyd's rescue, summoning right-hander Liam Hendriks to try to douse a five-alarm fire. Hendriks didn't last long, and despite a couple of comeback attempts, the Jays went on to drop a 12-6 decision to the Red Sox along with the series.

As Boyd made his trance-like march to the Toronto dugout, the grim numbers came over the press-box loudspeaker. Zero innings pitched, six hits, seven runs, all earned, one walk. Not to mention a tidy 214.85 earned-run average. No, that is not a typo.

Nor is it something you will include in the family album.

It seemed like a dream season for Boyd, who started at the Jays' farm team in New Hampshire and held opposing Double-A batters to a .155 average before he was promoted to the Triple-A Buffalo on June 13. After two starts for the Bisons, Boyd was called up to Toronto for his major-league debut, thanks to the Blue Jays' wobbly pitching, and that is where that whole Cinderella thing fell apart.

Boyd did manage seven strikeouts in his big-league debut, which tied a club record, but he also coughed up a three-run homer and wound up 0-1. And now this.

No one would have blamed Boyd if he walked through the Blue Jays dugout, kept going until he hit the pub across the street and pulled up a stool at the bar, uniform and all.

But Boyd's implosion did not appear to have much effect on the crowd of 29,758. After all, they are getting used to big comebacks by the slugging Jays this season. The night before, the Jays won their only game of the Boston series, 11-2, with a typical pounding of the Red Sox pitchers.

Indeed, the Jays came back in the second inning with four runs to cut Boston's lead to 8-4, but it was all on singles. The boom was not in the bats this time. At least not until the ninth inning, when Russell Martin and Danny Valencia hit back-to-back homers and Kevin Pillar doubled, although that comeback died there.

Also having (enjoying?) an early night was Gibbons. He got himself tossed from the game in the fifth inning after arguing a call by home-plate umpire Gerry Davis. It appeared Boston catcher Ryan Hanigan missed the tag on the Jays' Valencia. Gibbons challenged the call, but after a long look at the replay, Davis's call was upheld and Valencia was the third out of the inning.

The Jays bullpen coughed up some more runs in the seventh inning, compliments of Steve Delabar, who could not find the plate. He finished his two-thirds of an inning with three wild pitches. This may have brought some comfort to Boyd, who had only one.

The loss left the Blue Jays 3-4 on the seven-game homestand and 26-18 over all at Rogers Centre this season.

Argonauts call Fort McMurray home
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Nomads for first five games of season, Toronto team travels 2,600 kilometres to host 'visitors' from Edmonton in heart of oil patch
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By DONNA SPENCER
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The Canadian Press
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Saturday, June 27, 2015 – Print Edition, Page S2


FORT MCMURRAY, ALTA. -- Toronto Argonauts kicker Swayze Waters and long-snapper Jake Reinhart set their hotel-room alarm for 2 a.m. their first night in Fort McMurray, Alta.

At the appointed time, they pulled the curtain open, only to be disappointed by the absence of aurora borealis.

"We were going to try and get a look at the northern lights," Waters said Friday. "It's on my bucket list.

"We decided to give it a shot. It didn't work out for me though."

But the first trip to the 56th parallel for many Argos has been an eye-opener, literally, as a northern Alberta day in late June offers 17 hours of daylight.

"I was laying there last night about 10:30 and we had to close the blinds because it was light outside," rookie linebacker Brian Rolle said. "It's sort of weird."

The combination of scheduling issues at Rogers Centre and the Pan American Games being held in Toronto this summer have made the club a nomad for its first five games of the CFL campaign. But having to play the season opener here Saturday is unusual because the Argos will be the home team some 2,600 kilometres away from home in a venue they've never played in before.

The "visiting" Edmonton Eskimos have already experienced the new, 15,000-seat SMS Equipment Stadium, beating the Saskatchewan Roughriders 31-24 there in a June 13 pre-season game.

The Esks will have the bulk of fan support in a city 435 kilometres northeast of Edmonton.

"I expect it to be a pro-Edmonton crowd, obviously," Toronto head coach Scott Milanovich said.

"Just feels like a road game for us.

"I don't know that any of our players are treating it like a home game."

The "Northern Kickoff" is billed as the most northerly regularseason game ever played in the CFL. Fort McMurray, with a population around 80,000, is the centre of the oil sands industry.

The temperature is expected to be close to 30 C by Saturday's kickoff at 3 p.m. local time.

Toronto, which doesn't play at home until Aug. 8, will open the season with backup Trevor Harris under centre. Incumbent Ricky Ray is on the six-game injured list recovering from off-season shoulder surgery.

Harris appeared in five games last year and started the regularseason finale against Ottawa. The six-foot-three, 235-pound Harris completed 26-of-36 passes for 281 yards with two touchdowns and an interception in a 23-5 win.

"He has gotten playing time.

He's not like a normal backup that comes in very green," Milanovich said. "Trevor is highly intelligent. Phenomenal the way he prepares himself even when he's not the starter.

"The fact this is his team right now, I don't think that weighs too heavily on him. I think he embraces that."

The Argos missed the playoffs last season with an 8-10 record.

The Eskimos finished second in the West Division at 12-6 before losing to eventual Grey Cupchampion Calgary in the conference final.

The Eskimos have also been displaced from Commonwealth Stadium to start this season by the Women's World Cup soccer event. However, they'll be back in their home building by mid-July.

The Argos arrived Thursday evening following a four-hour non-stop charter flight from Toronto. The Eskimos held their walkthrough in Edmonton on Friday morning before a quick flight north.

"The crowd was pretty full when we were here last time and it was a fun place to play a football game in," Eskimos quarterback Mike Reilly said. "It's in Alberta, so we're excited we should have a pretty good turnout from out fan base.

"We did have the opportunity to go and play a couple of weeks ago here, but once the ball is kicked, football is football. Nobody really cares where you're playing. Once that ball is kicked off, you've got one thing to do and that's win."

Raps hope new '905' affiliate will bolster player development
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By RACHEL BRADY
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Tuesday, June 30, 2015 – Print Edition, Page S1


MISSISSAUGA -- Two years ago, during his interview with the Toronto Raptors prior to becoming their general manager, Masai Ujiri was already asking Maple Leaf Sports and Entertainment to consider buying an NBA Development League team to call its own.

The idea stayed on top of Ujiri's to-do list after he took the job. And the ball got rolling in New York in February when Ujiri and an MLSE team made a convincing pitch to D-League president Malcolm Turner that Mississauga, in the heart of Southern Ontario's thriving basketball market, was ripe for the opportunity.

Less than four months later, Ujiri, Turner and Mississauga Mayor Bonnie Crombie got together on Monday to announce that the D-League is adding its first international team, named Raptors 905, that will play home games at the Hershey Centre starting this fall.

It will be the 19th team added to the D-League, the official minor league of the NBA. The 905 nickname is a nod to where so much young basketball talent has emerged in recent years - Greater Toronto's 905 area code.

Before now, the Raptors had been sending young players such as Bruno Caboclo and Lucas ("Bebe) Nogueira to the Mad Ants in Fort Wayne, Ind., a D-League team that serves as a shared affiliate for several NBA teams that don't have exclusive franchises.

Neither player got as much playing time there as the Raptors would have liked.

Having a team of their own will give the Raptors more control over how their young players are handled, and being just 32 kilometres from the Raptors' home at the Air Canada Centre is an obvious convenience. The team will be allowed 14 roster moves each year.

"Having our own team right here is going to help us develop players, and it will also be our guinea pig, a place where we can try new things in instructing and coaching - things we want to try here first before bringing [them] to the Raptors," Ujiri said. "This is also huge for Canada Basketball. There are seven players in the NBA right now who are from the 905 area code, and we really think that number is going to keep growing."

9 NBA youngsters Andrew Wiggins, Tyler Ennis, Anthony Bennett, Andrew Nicholson, Nik Stauskas, Tristan Thompson and Cory Joseph all grew up playing locally, all part of basketball's spike in popularity here.

Several kids from the minor Mississauga Monarchs, touted as one of Canada's largest community basketball organizations, were on hand to celebrate Monday's announcement.

"We had various expansion opportunities in various markets in the U.S. and Canada - virtually every NBA team is interested in their own D-League team. But we resolved that the right place was in Canada, and we should do it for next season," Turner said.

The Raptors are the ninth NBA team to fully own and operate their own D-League team, following the Cleveland Cavaliers ("Canton Charge), Golden State Warriors ("Santa Cruz Warriors), Los Angeles Lakers ("L.A. D-Fenders), New York Knicks ("Westchester Knicks), Oklahoma City Thunder ("Oklahoma City Blue), Philadelphia 76ers ("Delaware 87ers), San Antonio Spurs ("Austin Spurs) and Utah Jazz ("Idaho Stampede).

If Caboclo and Nogueira aren't getting much playing time with the Raptors, they will likely play in Mississauga. Ujiri said injured Raptors may also play rehabilitation games with the affiliate, and he hopes to have some Canadians play for Raptors 905.

Ujiri intends to hire a coach of the D-League soon. Then the players will be added to the team via an expansion draft in October, before D-League play begins in November.

Associated Graphic

Before now, the Raptors had been sending young players such as Bruno Caboclo to a D-League team in Indiana.

DAVID BECKER/THE ASSOCIATED PRESS

As baby boomers start fading into retirement, the millennials are arriving-taking over the workforce, having children and buying homes. As they enter their prime spending years, they're also giving investors plenty to think about
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By DAVID BERMAN
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Friday, June 26, 2015 – Print Edition, Page P1


Coined by Neil Howe and William Strauss in the 1990s, Millennials refers to people born between 1982 and 2002 (1980 is also a popular starting year)

Based on U.S. population surveys, millennials emerged as the largest generation in the U.S. labour force at the start of 2015, for the first time:

Millennials: An estimated 54 million and rising

Gen Xers: 53 million

Boomers: 45 million

Canadians aged 25 to 29 who hold a post-secondary degree or diploma:

68% (2011)

43% (1981)

Millennials who sleep with their phones next to their beds: 80%

Millennials in the U.S.: 80 million

Millennials in Canada: 7 million

Five Things That Define Their Consumption Habits

1: They don't like debt

2: They are informed consumers, thanks to social media

3: Though responsible for 80% of births, millennials are waiting longer to start families, which means they have more time to spend on themselves

4: But they have less money to spend than previous generations, which makes them sensitive to value

5: They tend to embrace a healthier lifestyle, avoiding diet pop, candy, cigarettes and prepackaged food while embracing daily fitness routines and natural foods

THREE STOCKS TO BUY

NIKE

Millennials love brands that innovate. If they can order a pair of customized shoes online, they will

ZULILY

Parenting is a lot easier when you can use your mobile device to shop for kids' clothes from smaller, hip brands

STARBUCKS

Real food and coffee are an advantage over other chains

AND THREE TO RUN AWAY FROM

HERSHEY CO.

Millennials aren't wild about candy (unlike Gen Xers and Boomers)

DR. PEPPER SNAPPLE GROUP INC.

They're also not fond of carbonated soft drinks

GENERAL MILLS

Or sugar in their cereals

No happy ending for the Greek saga
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By ERIC REGULY
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Saturday, June 27, 2015 – Print Edition, Page B1


ROME -- One way or another, the end is nigh for Greece.

By this time next week, perhaps earlier, Greece will have defaulted, putting it on a fasttrack exit from the euro zone.

Or it will have signed a deal with its creditors that will demand more austerity in exchange for more emergency loans that it will never be able to repay. The former would trigger a quick economic collapse; the latter would grind it down for years - a slow-motion suicide.

The odds are in still in favour of a deal between Greece and its creditors - the European Union, the European Central Bank and the International Monetary Fund - if only to deny the euroskeptics the pleasure of saying: We told you so, the euro is a failed project.

We will probably know the outcome this weekend, after the conclusion of a meeting in Brussels among the euro zone finance ministers, including Greece's Yanis Varoufakis, who insisted again on Friday that he was not about to cave in to the creditors. "As a debtor, I have a duty not to take on more loan tranches unless at some point these debts will be repaid," he told RTE Radio.

But neither he nor Greek Prime Minister Alexis Tsipras have much negotiating power. The government lacks the money to pay the €1.6-billion ($2.2-billion) owed to the IMF on June 30 and the Greek banks, the victims of a deposit run, are alive only because the ECB has mercifully flooded them with cheap liquidity. Polls show that the majority of Greeks want to stick with the euro and Mr. Tsipras has never threatened, at least publicly, to pull the plug on the euro zone if he doesn't get a deal he can live with. On Friday, the economists at the French bank Société Générale attached a 60-per-cent chance of the two sides reaching a deal that will allow the Greek government to keep the lights on.

Greece faces a damned-if-youdo-damned-if-you-don't choice. Let's assume that a deal of some sort gets done, one that would allow Greece to pay its debts this summer to the IMF and the ECB, stabilize its banks and stay in the euro zone. Then what? The answer isn't pretty because the new austerity measure will suck €7.9-billion out of the economy this year and in 2016, according to Greece's estimate earlier this week (the final estimate, depending on the deal struck, could be higher). Pension cuts, higher corporate taxes, an extension of the value-added tax (VAT), a wealth tax and less defence spending are the main ingredients in the new austerity soup. How can this not hurt growth?

Lest we forgot, Greece's creditors wholly miscalculated the damage austerity would inflict on Greece five years ago, when the country became the poster child for the debt crisis that nearly shattered the euro zone.

The IMF's staff report from May, 2010, when Greece found itself shut out of the debt markets and received its first bailout, made some fairly optimistic predictions about Greece's recovery.

It said that real GDP growth would return in 2012 and reach 3.8 per cent in 2015; that employment growth would resume in 2013; and that the jobless rate would peak out at 14.8 per cent in 2012, then fall to 13.4 per cent in 2015. Greece, in other words, would use growth to bury its problems and shrink its debt, albeit slowly.

The IMF projections were dead wrong. Unemployment rose to more than 27 per cent (the latest figure is 26.6 per cent).

Youth unemployment is a staggering 52 per cent. Greece's GDP has shrunk by more than 25 per cent - an outright depression.

After flirting briefly with growth last year, the economy is contracting again. The debt-to-GDP ratio, which was supposed to be 140 per cent by now, is an obscene 180 per cent, the highest in the Western world. Absent a debt writeoff, a new bailout program will ensure the figure does not come down any time soon.

So what is the creditors' fix-it plan for Greece? More austerity.

Privately, the creditors will say that Greece is its own worst enemy; had it worked harder to implement genuine economic reforms, from privatizations and freeing up the job market to fighting corruption and breaking business cartels, Greece's economy would be in far better shape.

Because Greece failed to implement many, perhaps most, of the reforms, the creditors have no choice but to insist instead on another round of austerity.

To be sure, there is some truth to the creditors' argument, but only some. The inconvenient truth (for them) is that Greece has done a credible job in shifting from a primary budget deficit to a primary budget surplus (the measures exclude debt payments). On a cyclically adjusted basis, that is, adjusted for what it would be at full employment, Greece's primary surplus would be more than 5 per cent, the highest in Europe, according to the IMF.

You can see where this is heading. When the new tax demands and spending cuts hit in a few months, Greece's recession will deepen and the jobless rate, which is actually ratcheting up again, will remain at gruesome levels. Greece will require another bailout, ensuring it will remain a ward of the IMF, the ECB and the EU for many more years. The price of keeping the euro zone intact is keeping Greece in austerity hell.

Trade woes are not merely a Canadian problem
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By DAVID PARKINSON
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Thursday, July 2, 2015 – Print Edition, Page B1


Economic Insight

If there's any consolation in the frustrating lack of sustained momentum in Canadian exports (and for an export-focused economy there's not much), it's that we're not alone. Much of the rest of the industrialized world is in the same rudderless boat.

To say Canada's trade in recent months has been a disappointment would be an understatement. The sector was supposed to be leading the country's economy to better times; instead, it posted its two biggest deficits in history in March and April, a combined $6.9-billion trade crater. Exports have fallen in six of the past seven months.

It's tempting to blame this export slump on the oil shock. Energy products made up roughly one-quarter of Canada's exports, by value, before oil prices started plummeting last year. In April (the latest month available for trade data), the value of energy exports were 40 per cent below their 2014 peak, representing a decline of nearly $5-billion.

But this is about more than a deep price slump in a single export sector to which Canada is heavily exposed.

Non-energy exports have fallen in three of the past four months. And while average monthly energy export volumes this year are actually up from last year, non-energy export volumes are down nearly 2 per cent. No, this is not just a Canada/oil problem. There's something not right with trade worldwide.

A recent report from National Bank of Canada economist Krishen Rangasamy noted that global trade volumes sank by an annualized rate of 6 per cent in the first quarter of 2015 - the worst quarter since the Great Recession.

Certainly the West Coast port strikes and unusually harsh winter in the United States contributed to the first-quarter funk.

But the fact is, this was the culmination of years of sluggish trade flows that have held back the global recovery. With the exception of a bounceback from the recession lows in the early stages of the recovery, global trade growth has been considerably below its historical norms throughout most of the postrecession period.

In a research report last week, Royal Bank of Canada said that one of the keys to the prolonged global trade doldrums has been the lacklustre pace of business capital investment across a broad swath of advanced economies.

"Private fixed investment in advanced economies contracted sharply during the global financial crisis, and there has been little recovery since," the International Monetary Fund said in its recent World Economic Outlook. It said that for the advanced countries, this investment - in fixed assets such as machinery, equipment and facilities - is a massive 25 per cent below where it was on track to be before the 2008 financial crisis hit. Weak economic growth, uncertainty and reduced financing availability in the postcrisis era have conspired to discourage business spending.

This investment deficit is evident when you look at the Canadian export sectors that have had the poorest recovery from the financial crisis and Great Recession. The RBC report analyzed Canada's export volume growth since the depth of the crisis in the first quarter of 2009, and found that growth has been weakest in sectors closely associated with business investment: electronic/electrical equipment and industrial machinery.

The slide of the Canadian dollar against its U.S. counterpart would appear to have helped these business-oriented exports pick up somewhat as the recovery progressed. But CIBC World Markets deputy chief economist Benjamin Tal believes that the exchange rate is now acting as a double-edged sword.

In a research note last week, Mr. Tal noted that Canada's export focus to its biggest market, the United States, has become increasingly focused over the years in feeding U.S. businesses the construction materials, equipment and raw materials, and intermediate goods they need to manufacture things for world markets. But those manufacturers, who right now should be gobbling up these Canadian exports as they look to ramp up their output and capacity as the U.S. economy picks up speed, are being held back in a serious way by the rise of the U.S. dollar against other world currencies. The greenback's rise is hurting global demand for U.S.-made consumer goods, and that, in turn, is slowing demand for what Canada delivers to those U.S. manufacturers.

"So, the currency-induced reduction in demand from U.S. manufacturing works to offset the currency-induced improvement in Canadian manufacturing competitiveness," Mr. Tal said.

A return to more robust U.S. growth in the second half of this year, after a disturbingly slow start, may help this problem solve itself in the near term; U.S. domestic demand is capable of being big enough and strong enough to overcome currency headwinds for U.S. exports. But without a globally more stable and healthy economy, it may prove hard to truly break free of the bigger investment-starved trade cycle.

And it certainly won't help to have a new crisis every minute from Greece and the European Union. That not only drives more flight-to-safety buying of U.S. dollars and exacerbates its rise, but it rekindles the kind of deep uncertainty that has been making businesses so hesitant to invest for so long.

Associated Graphic

CARRIE COCKBURN/THE GLOBE AND MAIL SOURCES: RBC CAPITAL MARKETS

No vote puts Greece, investors on edge
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Banks face nightmare scenario Leaders and shareholders had been lobbying hard for a Yes vote, banks might not reopen without emergency loan
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By ERIC REGULY
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Monday, July 6, 2015 – Print Edition, Page B1


ATHENS -- Greek Prime Minister Alexis Tsipras's stunning referendum victory may come at the cost of the country's banks.

The No result in Sunday's vote, signalling rejection of the creditors' loans-for-austerity demands, was the nightmare scenario for the banks, whose leaders and shareholders had been lobbying hard for a Yes vote - acceptance of the creditors' demands.

The governor of the Bank of Greece, Yannis Stournaras, was to call Mario Draghi Sunday evening to try to convince the ECB president to pump more emergency loans into the Greek banks.

The ECB's governing council is to meet in Frankfurt on Monday to decide if the banks will get that assistance.

If more emergency loans are to come, they would have to come fast.

The Greek government stated last week that the banks would reopen by Tuesday. But that promise might have to be broken if more emergency loans fail to appear.

As of early last week, there was only about 1.5-billion ($2.1billion) remaining in the ECB's emergency loan assistance (ELA) program.

The steady outflow of deposits, slowed somewhat by the capital controls imposed on the banks a week ago, is thought to have reduced that amount to about 500-million by the weekend, meaning the banks are close to being bled dry.

Economists and strategists on Sunday night said the No victory will close more doors than it opens, since the creditors - the ECB, the European Union and the International Monetary Fund - had hoped for a Yes vote.

"Everyone [in Greece] is praying the ECB will increase the ELA cap for the Greek banks [Monday]," Megan Greene, chief economist for Canada's Manulife Financial Corp., said in a note Sunday night written from Athens. "I think this is extremely unlikely. Why would the ECB increase its exposure to Greece when the government, now backed by a majority of the people, is rejecting a bailout plan that was lighter than the one Greece will ultimately need?"

Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, also thought the ECB would be unwilling to pump more emergency loans into the Greek banks. "A No vote accelerates the drift toward Grexit," he said, referring to the shorthand for Greece's exit from the euro zone, "and makes it agonizingly difficult to maintain ELA. If the ECB keeps the banks afloat even after a No vote, then its credibility will be seriously called into question."

The ECB alone can make or break the Greek banks, and the Greek economy along with them.

The ECB launched its ELA program for the Greek banks in February, a month after the election of Mr. Tsipras's radical left, antiausterity party. His victory spooked depositors, who began yanking their cash from Greece's four main commercial banks.

The deposit run came as a blow to the banks, which had been restructured and recapitalized after taking severe losses during the height of the debt crisis in 2011 and 2012.

Since February, the ELA program has made 89-billion available to the banks. A week ago, the ECB capped ELA at that amount instead of boosting it, as the banks had hoped. Fearing the banks would run out of cash, the Greek government then ordered the banks to keep their doors shut and imposed capital controls. Since then, ATM withdrawals have been limited to 60 a day. Pensioners, most of whom do not have cash cards, were allowed into the branches to withdraw 120 a week.

By the end of the week, there were strong rumours that ATM withdrawals would have to be limited to 20 a day to preserve what little ELA remained. Ms. Greene said that if no more emergency loans come, the Greek banks would be able to survive until July 20 at best, when Greece owes the ECB a bond payment of 3.5-billion.

"If the banks have no cash left, the ECB will demand recapitalization or resolution plans and Greeks will be out in the streets," she said.

There have been reports that any recapitalization plan might have to be funded by a "haircut" on deposits, similar to the one imposed on the Cypriot banks in 2013 during which banks were closed for two weeks and capital controls lasted two years. The Greek government has denied a haircut is being planned, though in a crisis situation, it would no doubt emerge as an option.

The capital controls and the No vote are a blow to Prem Watsa, chairman and CEO of Toronto's Fairfax Financial Holdings.

Last year, Fairfax led a high-profile investor group that pumped 1.3-billion of capital into Greece' Eurobank. That was half of the 2.9-billion raised.

The landmark deal made Eurobank the first Greek bank to return largely to private ownership after the crisis that nearly proved fatal to the entire banking sector only two years earlier.

Eurobank shares have lost 62 per cent in the past year.

Associated Graphic

Greek Prime Minister Alexis Tsipras casts his ballot at polling station in Athens on Sunday.

CHRISTIAN HARTMANN/REUTERS

Markets slide on Greece woes
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Global stocks sink as Greece signals default and fears of euro exit rise, but investor reaction more moderate than in previous moments of crisis
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By TIM SHUFELT
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Tuesday, June 30, 2015 – Print Edition, Page B1


The possibility of Greece leaving the euro currency union gripped global markets on Monday, reigniting fears of a destabilizing financial shock emanating from the country's enduring financial and economic crisis.

After Greek bailout talks collapsed, stock market benchmarks worldwide dropped in Monday's trading.

But while stock losses were nearly universal, the magnitude of the investor reaction was modest compared with past flare-ups in the crisis.

"I would argue the market is showing remarkable resilience," said Eric Lascelles, chief economist for RBC Global Asset Management. "The euro is largely holding steady, stocks are down only moderately and Italian yields are still in the vicinity of U.S. yields."

That's a different story from a few years ago, when the euro zone's debt saga would provoke much wider swings in equities, currencies and bonds. While a Greek exit could be unpredictable and messy, the world has had years to insulate itself from financial contagion, Mr. Lascelles said.

Greece brought its future in the euro zone into question on Friday when it walked away from negotiations over an extension to its bailout program, which has pumped hundreds of billions of euros into the troubled country over the past four years, and which expires at the end of June.

With a 1.5-billion ("$2.1-billion Canadian) debt payment due to the International Monetary Fund on Tuesday, Greece's government instead said it will hold a national referendum on July 5.

The vote is seen as a proxy for Greece's continued membership in the currency union.

In response, the European Central Bank capped the emergency liquidity supplied to Greek banks, forcing the Greek government to impose capital controls to prevent a financial collapse.

The Athens stock exchange and Greek banks are closed pending the referendum, and bank withdrawals are limited to 60 a day per account.

Investors reacted by trading down risk assets in favour of safe-haven securities. Investor fear was most apparent at the centre of the crisis.

While Greek stocks are frozen, a United States-based exchange traded fund called Global X FTSE Greece 20 fell by 20 per cent on Monday.

Beyond Greece's borders, the shock waves spread through foreign stock markets with diminishing intensity.

Every single stock in the bluechip Euro STOXX 50 index was down on the day, with the benchmark declining by 4.2 per cent.

The greater European powers showed a little more resilience, with the French CAC 40 index dropping by 3.7 per cent, and the German DAX by 3.6 per cent.

Canadian and U.S. stocks both swung to a loss on the year, as the S&P/TSX composite index and the S&P 500 index dropping by 2.1 per cent on the day.

For Greece itself, which is laden with debt and mired in economic depression, the stakes couldn't be higher.

But in the intervening years since Greece last inspired panic in financial markets, euro zone officials have put in place measures to limit the spread of financial contagion.

The bulk of Greek public debt has been taken out of the private sector, limiting the exposure of the European banking system to a default event.

The European Stability Mechanism, a permanent bailout fund, was established.

And the European Central Bank ("ECB) implemented its own quantitative easing program, buying up 60-billion worth of debt every month.

"A large majority of Greek public debt is owned by official European creditors," TD economist Andrew Labelle, said in a note.

"[And] the ECB has the ammo to quell rising volatility."

Economically, Greece claims a 2-per-cent share of European Union GDP, which is insufficient to have any real consequences for global output and trade.

Meanwhile, U.S. investors' holdings of Greek stocks amount to only about $5.7-billion ("U.S.), according to Bloomberg, which wouldn't even qualify as a single large-cap stock by U.S. market standards.

So the resurgence of Greek default fears has "prompted a flight-to-safety market response, but no panic," noted Douglas Porter, chief economist for the Bank of Montreal.

"We believe this is entirely the appropriate response."

A major pullback in North American equities resulting from a Greece exit is not out of the question.

However, there is likely to be a strong bid among bargain hunters seeking to profit from a selloff, Mr. Lascelles said.

For those investors, Monday's modest dip in Canadian and U.S. stocks doesn't go far enough.

"We expect stocks to decline further this week as uncertainty reigns and that bond yields should fall this week in North America as investors seek a safe harbour," Norman Levine, managing director and portfolio manager with Portfolio Management Corp., said in a note.

"We look forward to further declines in equity prices and this is hopefully the market correction we have been expecting and eagerly awaiting."

Loblaw seeks to avert spread of strike to GTA stores
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By AHMAD HATHOUT
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Friday, July 3, 2015 – Print Edition, Page B1


Workers at nine Loblaw Cos. Ltd. stores in the Windsor area walked off the job early Thursday, adding pressure to labour talks leading up to another possible strike at 61 stores in the Greater Toronto Area this weekend.

Loblaw and the union representing 26,000 employees went back to the bargaining table Thursday after an early morning deadline for a deal with the Windsor workers lapsed, sending them to the picket lines. Loblaw said it will keep the Windsor stores operating with managers, but with modified store hours and reduced services.

"In light of the union's decision to reject our offer and to strike, we have turned our attention to serving local customers and supporting our colleagues who will continue to serve them in all nine stores," Kevin Groh, Loblaw's vice-president of corporate affairs, said in a statement.

Loblaw and officials with the United Food and Commercial Workers union have now resumed negotiations. Loblaw will try to come to an agreement with the union not only to end the current strike but also to avert a scheduled strike involving Local 1000A, which could affect 61 stores in greater Toronto, before a deadline of 12:01 a.m. July 5.

"Our senior members are telling us that they made sacrifices for the company, when they needed it most, to help the business grow," read a statement on the Local 1000A website.

"Now, the business is doing well, they expect more and a fair share of those profits."

Michael Van Aelst, retail analyst at TD Securities, said in a note Tuesday that there is still a "reasonable amount of time to fine-tune the agreement before July 5," and that either party can request another vote hoping for a larger turnout that would lead to a favourable outcome.

TD said voter turnout for the ratification meetings was less than 20 per cent.

Just before midnight on Wednesday, Locals 175 and 633 released a statement on their website that said John Miller, the mediator specialist for the Ministry of Labour, had asked the parties to resume negotiations and advised all parties to observe a media blackout. The union previously said on its website that Loblaw was not prepared to return to the bargaining table, but agreed to on Mr. Miller's urging.

Loblaw said in a memo obtained by industry publication Grocery Business that it was closing service cases in its fresh departments at the nine stores during the dispute, which would affect sales volumes and production.

The Windsor-area deadlock affects 1,600 workers at Zehrs Great Foods and Real Canadian Superstores (RCSS) locations in Kent, Essex and Lambton counties.

Meanwhile, a separate segment of locals 175 and 633 representing about 50 stores operating as Zehrs, Loblaws, Great Food and RCSS in central and north central Ontario agreed to the new contract.

The new six-year term would see part-time clerks who work the fewest number of hours paid minimum wage (currently $11) over the duration of the contract. Both full-time and part-time employees at the end rate of pay would see a $1.70an-hour increase over the six years.

The five-year agreement ratified in 2010 saw part-time employees paid a minimum of $10.25, also based on Ontario's minimum wage, for the duration of the contract.

The union said in a May statement that the salient issues are fair wage increases, reliable work schedules, benefit improvements and limits on thirdparty providers. Last month, 61 per cent of the union membership rejected the tentative agreement at ratification meetings.

Kevin Grier, a food market analyst, said Loblaw would not want to see a strike drag on.

"This is probably a time when you don't want to see a strike because this is a time when margins are good and you want to be selling and you don't want to lose market share. Because square footage has been growing, there has been a lot of competition from Wal-Mart and Costco. They [Loblaw] have been losing share to those in a big way in terms of the traditional grocers but also to the lower-cost formats like Food Basics."

Peter Chapman, retail marketer at GPS Business Solutions, said that Loblaw had built in some flexibility in its previous agreement. This allowed it to explore its own lower-cost grocer formats such as its Box by No-Frills.

Mr. Van Aelst said the "greater risk" to the company would be a temporary disruption in its momentum.

The previous Loblaw strike lasted two days in Alberta in 2013.

Economic recovery: the miserable truth
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By ROB CARRICK
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Friday, June 26, 2015 – Print Edition, Page B1


A lot of people are going to hate the economic recovery.

Where we are now is the economic sweet spot - low interest rates to support our consumption of houses, cars and such, plus reasonably solid underlying fundamentals. A gauge of economic stress called the misery index now sits at its lowest point in 35 years for Canada.

Economists have been forecasting a return to more normal levels of growth since the last recession ended in 2009. Instead, we've seen persistently slow growth that has suited a lot of us very well. If you owe a bunch of money, these times could be the best you'll ever know because of low rates. You won't know what you've got till it's gone, to paraphrase Joni Mitchell.

You can find economic data to back up any view at all about what's happening out there right now. Middle-class stress, middleclass success. Excessive borrowing, manageable debt. Into this mix, let's throw some numbers about all the retail therapy we've been enjoying.

Start with new cars, SUVs and trucks. This year is shaping up to be yet another record-breaker in sales over all, with luxury and high-performance car makers generating the biggest increases.

According to the Good Car Bad Car website, Audi, BMW, Lexus, Lincoln and Mercedes-Benz all had sales increases in Canada of 16 per cent to 22 per cent for the first five months of 2015. Porsche sales surged 34 per cent.

Houses are also selling well, even in cities beyond Vancouver and Toronto. Calgary's doing pretty well considering the impact of lower oil prices, and modest slumps in cities such as Ottawa and Montreal seem to have halted, at least for the moment.

Travel is another area where we're spending with enthusiasm.

The Hotel Association of Canada forecasts that the average occupancy rate will be 64 per cent this year, tied for 2014 as the highest since 2007. And check out Air Canada's numbers: The airline reported its second straight year of record profits in 2014 at $531million.

The April tally of retail sales showed a small decline on a yearover-year basis, a sign of overall economic sluggishness. But hidden by that overall number were niche increases of 8 per cent for jewellery, clothes and home furnishings, and 10 per cent for shoes.

The economy is definitely weak by traditional standards - it shrank 0.6 per cent in the first quarter of 2015 on an annualized basis and grew 2.4 per cent in the final three months of 2014. Three per cent would be a very solid but not outrageous annualized growth rate. However, we're still in pretty good shape in terms of a measure of economic stress called the misery index. Created by American economist Arthur Okun, the misery index is the sum of the unemployment rate and the inflation rate.

It turns out that in this recent period of weak economic growth, we happen to have the lowest reading on the misery index in 35 years. The index stood at 7.7 per cent for May, which compares with an average of 11.7 per cent going back to 1980 and a reading of 8.2 per cent in 2007, before the global financial crisis and recession. You want to see what real misery looks like? In 1982, the misery index hit 21.9 per cent.

Canada's economy is in a position where unemployment is fairly low over all and inflation is subdued enough to allow the Bank of Canada to keep borrowing costs at historic lows. What could upset the balance? A pickup in economic growth feeds inflation and gives the central bank the excuse it needs to start pushing interest rates higher.

Higher rates will help savers and conservative investors relying on income from bonds and guaranteed investment certificates, but they'll be hard on borrowers. As the economy heats up, they'll be paying more on floating-rate debt such as home equity lines of credit and variable-rate mortgages.

People with fixed-rate mortgages will renew into higher rates and see their monthly payments increase. That means less cash to spend on cars, jewellery, shoes and houses.

Stronger economic growth should lower the unemployment rate, create better quality jobs (full-time instead of part-time or contract work) and generate higher wage increases. And yet, a lot of indebted households are going to be worse off. That's an economic risk no one's talking about.

Follow me on Twitter: rcarrick

Beijing to B.C. and beyond: Chinese visits on the rise
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By RICHARD BLACKWELL
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Wednesday, July 1, 2015 – Print Edition, Page B1


China is poised to overtake Britain as Canada's second-largest source of foreign tourists.

The shift is expected to take place around the end of this year, leaving only the United States ahead of China when it comes to visitors entering this country.

Data from Statistics Canada show Britain still ahead of China for the first four months of 2015, but China's numbers are growing so quickly that it will soon move up into second place.

From January to April, 134,392 visitors came from Britain and 107,351 from China, but the Chinese numbers are up 20.4 per cent from 2014.

The change in rankings was expected to happen in 2016, said David Goldstein, president of Destination Canada, the Crown agency responsible for selling Canada as a travel destination.

But based on trends in the first few months of this year, it will occur earlier, he said.

"We talk about mature markets and emerging markets," Mr. Goldstein said. "China has now emerged. ... It is a juggernaut."

The growing middle class in China is one factor increasing Chinese tourism to Canada.

Another key factor was an agreement between the two governments signed five years ago, which gave Canada "approved destination status." This allowed direct-to-consumer tourism advertising in China, and permitted Chinese group visits. Quicker visa processing has also helped.

The higher demand means there has also been a sharp increase in the number of flights between the two countries.

Meanwhile, the rise in the number of Chinese travellers has forced Canadian tourist operators to adapt, Mr. Goldstein said, "just as the Rockies had to get accustomed, 20 years ago, to a huge wave of Japanese tourists."

That means making sure that appropriate food offerings are available, for example, and that menus and guidebooks are printed in Chinese.

Chinese visitors are travelling throughout Canada, Mr. Goldstein said, and not just sticking to the West Coast or the TorontoNiagara Falls region. Air China has just announced a direct flight from Beijing to Montreal starting this fall, a sign there is sufficient demand for that route, he said.

Despite the rise of Chinese tourism, the United States is still firmly the No. 1 source of travellers coming to Canada. In the first four months of 2015, almost 2.3 million Americans came across the border and stayed at least one night, more than double the number who came from the rest of the world combined.

Destination Canada, which until recently was known as the Canadian Tourism Commission, will soon resume promotion of Canadian tourism in the United States. Three years ago, its budget was slashed and it sharply cut back its U.S. activities. But in May, the government said it will add $30-million to the organization's budget over the next three years specifically to resume promotion south of the border.

Mr. Goldstein said the new U.S. marketing effort - which will rely more heavily on social media and co-operative programs with tour operators rather than traditional advertising - will start in the coming months. In the meantime, U.S. travel to Canada is increasing anyway. Overnight trips were up almost 6 per cent in the first four months of 2015 compared with the year before.

"There is pent-up demand in [the U.S.] market, even unaided," Mr. Goldstein said. The low Canadian dollar has been a factor, he acknowledged, but U.S. travel could really boom if it gets a boost from targeted promotion.

More broadly, Mr. Goldstein said Canadian tourism promotion efforts will now be geared toward attracting a younger demographic than they have in the past. Canada's great outdoors is "very compelling to younger travellers" who like to explore, he said, and this needs to be emphasized. "Canada is just built for that."

In addition, "millennials stay longer and spend more money than people think," he said, although less of their budget goes to hotels and more is spent on food, drink and cultural activities.

Overall travel to Canada is on track to increase about 5 per cent in 2015, the first time it will hit that number in more than a decade.

In the first four months of 2015, the only major source of Canadian tourism that shrunk is Germany, where traffic fell by 7 per cent. That is mainly a result of a cut in the number of available airline seats, Mr. Goldstein said, and should be a short-term anomaly.

'Draconian' supplier integrity rules (quietly) eased
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By BARRIE MCKENNA
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Monday, June 29, 2015 – Print Edition, Page B1


OTTAWA -- Here's a tricky communication challenge: How does a tough-on-crime federal government water down controversial supplier integrity rules without appearing soft on corruption?

The easy answer is to quietly make the changes in the dog days of summer, when Parliament isn't sitting and Canadians aren't paying attention.

That may be exactly what the Conservative government is planning. Various industry sources say a key cabinet committee recently approved a new "integrity framework" after widespread complaints that its strict 10-year ban on suppliers convicted of corruption anywhere in the world is draconian and unfair.

"We are waiting to see what happens, but we're hopeful," said Warren Everson, senior vice-president of policy at the Canadian Chamber of Commerce.

It's not clear when Ottawa will move, and how. Amber Irwin, a spokeswoman for Public Works Minister Diane Finley, would say only that the government would be making an announcement "in the coming weeks."

But with Parliament now in recess until after the Oct. 19 federal election, business groups are anxious to see changes in place as soon as possible.

The government is believed to be ready to modify the debarment period, create a limited appeal process and make exceptions for some crimes, such as those committed by loosely related offshore affiliates.

A tougher regime introduced last year by Public Works and Government Services Canada has become a quagmire, both for the government and businesses.

The rules put at risk billions of dollars worth of federal contracts and endangered its relationship with several key suppliers, including SNC-Lavalin Group Inc., Hewlett Packard Inc., IBM Canada Ltd., Brookfield Asset Management Inc. and Siemens AG.

The threat of banishment has fanned uncertainty throughout Ottawa's vast network of suppliers. For example, companies that may have acquired businesses with previous foreign convictions risk banishment in Canada. Many may choose to not bid for fear of being punished retroactively.

"There are hundreds and hundreds of people out there who are uncertain about their situation," said Mr. Everson of the Chamber of Commerce.

"It's not in Canada's interest to see a lot of people not bidding for projects because of uncertainty."

A number of developers who lease office space to the government have balked at renewing leases until Ottawa makes changes.

The government promised action in its April budget, saying it would introduce a "governmentwide integrity regime" that is "transparent, rigorous and consistent with best practices in Canada and abroad."

The government has been struggling to create a revamped set of rules that is workable, while also protecting it against unscrupulous and unethical suppliers.

Waiting until the summer recess to act may look bad. But the government is right to fix the problems it created.

Ottawa put in place an excessively rigid and sweeping regime - rules that, on paper, are tougher than in most other developed countries. Inexplicably, the government failed to anticipate that many of its leading suppliers would be caught in its policy dragnet.

Ottawa will no doubt sell the latest changes as an enhancement and a step forward for integrity in government. It will, for example, extend the policy to cover all government purchases, not just those done through Public Works.

But it doesn't have much choice.

Waiting until after the election could put at risk a range of vital government contracts, including office leases and information technology purchases. Some foreign suppliers have threatened to pull operations out of Canada.

And longer-term, a range of critical defence contracts would be affected.

The good news is that there are a range of sensible steps Ottawa can take, while still disqualifying unethical suppliers.

The government could, for example, do as other countries do and create a system that allows banned suppliers to appeal a debarment decision and seek reinstatement as a supplier. And it could make a much clearer distinction between crimes committed by foreign affiliates and those more directly linked to Canadian individuals and operations.

The government can still do the right thing, even if no one is paying attention.

WestJet grapples with PR challenges posed by bomb threats
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By SERES LU, OLIVER SACHGAU, AHMAD HATHOUT
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Saturday, July 4, 2015 – Print Edition, Page B1


With five bomb threats in less than a week, WestJet Airlines Ltd. is grappling with a public relations challenge to keep customers flying with the Calgarybased carrier.

WestJet began receiving threats on June 27, leading to several diverted flights and unplanned landings. The latest threat was for a WestJet flight from Las Vegas to Victoria, which landed safely Thursday.

The danger is that people could avoid flying with the airline.

"The problem here is that, obviously, when it comes to air travel, people have choices. If it seems that WestJet is being targeted for whatever reason, people will ... choose other airline carriers," said Wesley Wark, a visiting professor at the University of Ottawa and former member of the prime minister's Advisory Council on National Security.

So far, though, there is little sign that customers have been scared off; nor has WestJet's stock price shown any less confidence on the part of shareholders.

"As far as financial impact, there is a bit of money to set an airplane down a bit early, but we're not talking about any material impact at this point on any quarterly earnings," said Robert Kokonis, head of consulting firm AirTrav Inc.

"There'd have to be a lot more substantive issues with increasing their flights and impacting consumer confidence, but at this point it's simply a nonissue," Mr. Kokonis said.

What's more, experts say, the company could turn a bad situation into a public relations win.

"Sure, it's an elevated time of risk for WestJet, but it's also an elevated time of opportunity," said Daniel Tisch, chief executive officer of Toronto-based Argyle Communications. "...What happened to WestJet could happen to anybody. What's important is to take this new spotlight and make sure what you do well shines through."

So far, the company has been diligent about frequently updating its Twitter feed, replying to customer concerns and explaining how it's working with authorities to ensure safety. It has stressed that it believes the threats are hoaxes, and has taken measures, such as diversions, "out of an abundance of caution."

It's important to take every threat seriously and communicate with the public that you understand their concern and inconvenience, said David Gordon, a managing partner at Cohn & Wolfe, a public relations firm.

"If they are effective in communicating on those two levels, the public will rally behind them and say, 'This is a company I want to do business with and trust my safety with,' " Mr. Gordon said.

Customers are showing support for the airline. On WestJet's Twitter feed, comments range from encouragement - "Your teams are doing an amazing job! Keep up the great work" to sympathy - "I'm sorry that you're all having to go through this right now."

"They've done well in owning the information," said Jane Shapiro, a crisis-management expert at Hill+Knowlton. "They very quickly established themselves as the source, for the big things as well as the little things."

The support, Ms. Shapiro adds, comes largely from the reputation that WestJet already has with customers. "In unexpected situations like this, generally, companies with strong brands have a bank of goodwill they can draw on," she said. "Someone even said they are going to make it a point of flying with them next time."

WestJet ("WJA) Close: $26.53, down 40¢

Tuesday, July 07, 2015 Tuesday, July 07, 2015 CorrectionA Saturday Report on Business article on Westjet incorrectly said the airline has received five bomb threats in less than a week. In fact, the company has received four bomb threats and one unspecified threat.

Bobcat sees the day when he'll rein in the claws
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By DAVID SHOALTS
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Saturday, July 4, 2015 – Print Edition, Page S1


TORONTO -- One of the longest-running and most successful acts in Canadian broadcasting is looking at a curtain call.

Bob McCown, the ringmaster of the afternoon drive-time radio show Prime Time Sports since it hit Toronto's airwaves in 1989, says he has no plans to continue with the show when his contract with Rogers Communications Inc. expires in early 2018. He will be 65 then but does not expect to retire, just turn to something different, such as the Stoney Ridge winery he bought 18 months ago, or television projects with his company, Fadoo Productions Inc.

The one constant in Prime Time's various incarnations over the years is McCown. He's had a remarkable run in a business known mostly for turnover, but he says it feels like a long time and "that leads me to where I am now, which is a little bit bored."

Listeners across Canada know well the McCown persona: the cranky, sarcastic radio host now seen on television screens in headphones and sunglasses ("he doesn't like the studio lights).

What they probably don't know is that the persona is a creation - a character McCown plays for fun and profit. It has made him the highest-paid broadcaster in Canada, according to some sources, with an annual salary believed to be more than $1-million.

"He's created this character that's embedded in listeners' heads," said sometime co-host Stephen Brunt. "It's Bob of the imagination."

In the process, McCown has helped stoke a very real phenomenon: the exponential growth in the sports-talk radio business in Canada. When Toronto's CJCL went all sports as The Fan 1430 in 1992, the first voice on the air was McCown's. Over the next decade, all-sports radio stations popped up in most major Canadian cities - Toronto and Vancouver each have two. ("Full disclosure: I have been on McCown's show as both a paid guest and co-host many times over the past 15 years or so.)

These days, listeners might think their favourite curmudgeon is a little extra grumpy. Taking shots at Rogers bigwigs has been a McCown staple, but it seems to happen more frequently now as the 12-year, $5.2-billion contract Rogers signed with the NHL to be its Canadian national broadcaster has caught Prime Time in its wake.

The roster of co-hosts was shaken up, with Brunt and Damien Cox, who once alternated as cohosts, heard less and less. Appearances on Sportsnet's hockey broadcasts mean Cox no longer has time to be a co-host and Brunt's television obligations mean he will only be at McCown's side for 20 weeks this year. Also limited is Hockey Night in Canada broadcaster Elliotte Friedman, who, like Cox and Brunt, has good chemistry with McCown.

"There's no question the hockey contract has changed things and not for the good for me," McCown said.

Sportsnet television anchor Ken Reid has taken Cox's place and tries to bring a hip, pop-culture sense of humour to the show. The kindest thing to say is the chemistry with McCown is still developing. However, when Brunt or old hand John Shannon or Sportsnet broadcaster Arash Madani are in the co-pilot's seat, McCown is still at the top of his game.

Some of McCown's colleagues also say he is not pleased with the move of The Fan's popular afternoon duo of Tim Micallef and Sid Seixeiro to Sportsnet television.

They went from a strong lead-in to McCown's radio show to direct competition from 5 p.m. to 7 p.m. on weekdays.

Management's thinking is that Tim and Sid appeal to a younger and less sports-oriented audience, so they will boost Sportsnet's numbers while not stealing McCown's audience.

"There's room for both," outgoing Rogers Media president Keith Pelley said in an e-mail message.

McCown said Rogers executives did not consult him about any of those moves. While he said he likes working with Reid and would have resisted if he did not, he also said, "I'm at the point in my life where I don't fight any more. I spent my whole life trying to fight people who, quite frankly, don't know much about broadcasting."

At the same time, Pelley is one of McCown's best friends. He left the direct McCown wrangling to Scott Moore, Rogers's president of Sportsnet and NHL. But both men regard McCown's kvetching as part of his schtick. McCown's long-term success also makes the shots easier to digest.

"Part of what makes Bob so great is that he doesn't pull any punches," Pelley said. "He calls it as he sees it - even if it means questioning company management or the teams/players in which the company has an ownership stake." Pelley added that Rogers will support McCown in any new venture: "I've got all of the time in the world for Bob. He's a genius at his craft and has moulded the Canadian sports radio scene."

Colleagues are skeptical he will cut the cord

While Prime Time no longer gets the 8- to 10-per-cent share of the overall radio audience in Toronto it once did thanks to the splintering of traditional media audiences, especially among younger people, the show maintains its rule of sports talk in the 4 p.m. to 7 p.m. time slot. This is especially true for sports radio's target audience. For the spring ratings period of March 1 through the end of May, Sportsnet says Prime Time's share of the male 25-54 audience was 6.8 per cent, compared with 2.5 for TSN Drive with host David Naylor on TSN Radio 1050.

McCown's fade from the show will begin shortly, as he negotiated a reduction in the number of weeks he hosts annually to 37 this year from 43 to accommodate the first of two television shows on Rogers' Sportsnet network. The TV show, which is expected to air six times this year, will see McCown interview a major sports personality and give viewers a glimpse of the person's lifestyle.

By 2016, McCown says, he expects to be Prime Time's host for no more than 30 weeks a year.

"I do not see myself doing this after this contract," he said.

If so - and at least some of McCown's colleagues are skeptical he will cut the Prime Time cord - it will bring down the curtain on an act like no other.

"There's no one currently on the air in Canada you can tap as the next McCown, none," said Mike Gentile, who was both a colleague of McCown, as his producer from 1997 to 2006, and a competitor as the former producer of TSN Drive.

"The only guys you can compare him to across North America who've built their brand like that are Jim Rome, Dan Patrick and Howard Stern. That's his company."

The keywords are act and brand.

McCown and those who know him best say the abrasive radio host with an opinion on everything really isn't him off the air.

He is described as an introvert who is uncomfortable in large groups of strangers. He rarely makes public appearances. His off-hours are spent with his wife Christina, his daughter and stepson and a small circle of friends.

McCown also has two adult daughters and a son from a previous marriage.

In broadcasting, it is common to find people with that unusual mix of shyness and a towering ego. McCown, by his own account, has no shortage of self-confidence.

"When it comes to sports talk, I'm the only one who's done it for 40 years, no one else can say that," he said. "There's a skill to it, you have to understand the entire genre. I worked in it all my life, I understand it. I created most of it."

It was created after McCown - who was born in Columbus, Ohio, and moved with his mother to her native Toronto as a toddler when his father died - started his working life as a professional at a Toronto golf club. He decided the radio business looked more interesting. One of the members at his club got him a job as an advertising salesman at CKFH. When McCown tired of selling, he talked the station into giving him a nightly sports talk show.

But things did not start well.

"You realize if you are only getting two calls a night, you are doing something wrong," he said.

"What came into my head was change the character, change who you are."

So he created what he calls an obnoxious talk-show host, someone who baited callers or put them down or hung up on them.

The response was quick and heated, but in two months McCown's ratings jumped. "I realized I was on to something, so I kept going," he said.

The character followed him to a Toronto Blue Jays postgame phone-in show, a run in the 1980s on the Global television network as host of a nightly sports highlight show, and then to Prime Time. But over the years, McCown said, he has toned down the character.

"I still try to be opinionated and to a certain extent controversial, but not in the same way I was in the '70s," he said.

Brunt said the Prime Time television simulcasts propelled McCown and his sunglasses into the consciousness of Canadians who don't even get the show on radio. And when those people come up to Brunt, they usually have the same thing to say: "You put that Bob in his place, don't take any crap from him," Brunt said.

"Bob is not a jerk on the air," Brunt went on. "There's always a smile underneath it. You might disagree with him, but you don't hate him."

Brunt learned how solid McCown's place is with listeners when he left Prime Time for a year in 2001 to compete against him on CHUM Ltd.'s ill-fated The Team experiment in sports radio. "To fight against Bob, you're asking people to change habits they've had their entire lives," he said. "In the car, you have your presets where you go for traffic, weather and listen to sports. How often do you change them?"

Bill Watters also knows that McCown makes a formidable opponent. He served as McCown's first co-host when Prime Time launched, then as a competitor with his own show for four years on AM 640 until it was cancelled in 2011. In his first year, Watters said his show drew a 4.5-per-cent audience share compared with 6.5 for McCown, "and that's as close as anybody's got to Bob."

'I've done all five topics 500 times'

In the broadcast industry, McCown is famous for arriving at The Fan studio minutes before the show starts at 4 p.m. and hitting the exit equally quickly at 7 p.m. But Gentile says those who mock his apparent lack of preparation have no idea how the show works.

"That guy, when the clock hits 4 and the microphone is on, it doesn't matter when he walks in the door," Gentile said. "He's outstanding."

McCown checks newspapers and websites before he hits the studio, but does not see endless research as necessary.

"In the early days I would do 10 hours of research every day," he said. "Obviously now I've got 40 years of experience and what I understand is there are only five topics and I've done all five topics 500 times. You're not going to fool me any more. I came to the conclusion it's okay not to know stuff. The audience will forgive you. I don't have to know a lot, just know how to interview. I believe it's the overall quality of the conversation, not the questions."

Both Gentile and his successor as producer, Ryan Walsh, worked with McCown long enough to know how to put together a show lineup of topics and guests he would like. But, said McCown, "spontaneity is the key. We go in there and make it happen, fly by the seat of our pants. And it's worked. How can you say it's the wrong thing to do?" Once the red light is on, there is no doubt who is in charge. "It's Bob's show," Cox said.

"Your role is the co-host. Brunt and I joke about this, that with Bob you're always the most popular co-host when it's not your turn. When you come back he's happy to see you and then after a couple of days he wants the next guy."

Brunt is considered the most skillful McCown wrangler. "My role is to be the amiable co-host," he said. "He's the star and I'm the guy that tees him up."

Despite McCown's insistence he wants a change at the end of his contract, this is not a sure thing.

Graceful exits are not part of the Canadian media landscape. There is no shortage of sports broadcast legends hanging on in reduced roles at Canadian networks.

McCown must also see if his persona will translate to another medium. When The Fan tried to make him a Morning Zoo-style morning man in the mid-1990s, the experiment failed and McCown was fortunate to land back at Prime Time.

But his supreme self-confidence has him looking to the wine business - despite the fact he rarely drinks. He even has an allergy to red wine. But just as in broadcasting, he believes, it's about the brand, not a passion for the product.

McCown has dabbled in outside ventures with varying success, but friends told him he wasn't doing enough to "build his brand." So he decided on wine. "I wanted a product I could hold in my hand," he said. "My whole life all I produced was air."

He bought Stoney Ridge 18 months ago along with an interest in the Mike Weir Winery. The professional golfer is in the process of selling the rest of his winery to McCown, who hopes to add a third winery. He might even bring a touch of the obnoxious radio host to the new venture.

The wine business, McCown said, is "run by a bunch of farmers and wine growers who don't know jack shit about marketing or promotion or anything.

They've been to Toronto, but they never lived here. They have no concept of how a business really runs.

"I thought if you bring a little level of sophistication to this thing, if I can use my contacts maybe we can change it. In 18 months, boy, we've changed it and we've barely started. It's about understanding how to market, it's not about the product. It's not what's inside the bottle. Now what we produce is as good as anybody's. I'll put our wines up against anybody's in the country.

"In March of last year we went into the LCBO with Stoney Ridge and now we have two of the top 10 [sellers]. That's never been done. To a certain extent my involvement with the winery created that marketplace. But they don't buy a second bottle because of me, they buy it because they like it."

Listeners continue to like his radio act, too, even if his sports knowledge is not exactly encyclopedic. "He's still the best," Watters said. "Bob knows the tricks. He knows how to deliver sports in a fashion that makes you think he's forgotten more than you'll ever know, when in fact that's not the case. That's a master stroke. He's always been confident in his own ability to deliver what he wants."

Associated Graphic

Bob McCown: A well-crafted persona.

DARREN CALABRESE FOR THE GLOBE AND MAIL

Prime Time host Bob McCown says 'spontaneity is the key' to his program's success, and he has made a habit of not doing research before each of his shows.

DARREN CALABRESE FOR THE GLOBE AND MAIL

Bob McCown is photographed in January, 1983, while working as the host of a nightly sports highlight show on Global Television.

GLOBAL TV

CHOSEN, ONE
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The big draft moment was no surprise, but for Connor McDavid, the most heralded junior hockey player in a decade, it was still momentous to pull on his first pro jersey and begin his NHL career
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By MARTY KLINKENBERG
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Saturday, June 27, 2015 – Print Edition, Page S1


SUNRISE, FLA.. -- THE PROSPECT

A season with teenage Canadian hockey sensation Connor McDavid, and his impact on the Oilers, the NHL, and the city of Edmonton.

A journey that started when Connor McDavid strapped on skates at age three in the Toronto suburbs concluded Friday night when the 18-year-old was selected by the Edmonton Oilers with the first pick of the NHL draft.

In the minutes before his name was called at the BB&T Center, the prodigy who has drawn comparisons to Sidney Crosby and Wayne Gretzky bounced one leg nervously and seemed to hold his breath. "I'm going to throw up, I think," he said to his parents, who were seated on either side of him.

At the moment hockey's most-talked-about prospect became a professional, he hugged his father, Brian, his mother, Kelly and older brother, Cameron. Then he walked up onto the stage and pulled on the No. 97 Oilers jersey he is likely to be wearing when the puck drops in October at the start of the 2015-16 regular season.

"I didn't know how I would feel, but it was even better than I expected," McDavid said. "I was anxious. It is hard to describe what it is like to hear your name called.

"It's a dream come true."

The Oilers' fourth No. 1 pick in six years, McDavid ended his major-junior career with the Erie Otters this season as the most decorated player in Ontario Hockey League history.

Despite having only an 11.5 per cent chance, Edmonton won the right to choose first in a lottery that dashed other struggling teams' hopes on April 18.

Only minutes after picking him, the Oilers announced they will give all long-suffering season-ticket-holders a replica McDavid sweater. Once one of the most successful franchises in sports, Edmonton has not reached the postseason in nine years and last won a Stanley Cup in 1990.

In the 69 days since winning the lottery, the team fired and hired a new president and general manager in Peter Chiarelli, a new coach in Todd McLellan, and took a broom to its coaching and scouting staffs.

"It's exciting, of course," McDavid said of the many moves within the organization. "It's a great change. I am an Edmonton Oiler and I couldn't be any more proud."

After rolling up 120 points in 47 games and leading Erie to its first conference championship since 2002, the lightning-quick centre added 49 points in 20 postseason games and was chosen the most valuable player in the OHL playoffs.

Baby-faced and extremely softspoken, he attended his senior prom at Sir William Mulock Secondary School in Newmarket, Ont., several weeks ago, and only last week completed his final exams. He missed his highschool graduation Wednesday night while taking part in predraft activities in South Florida.

Before beginning his career on what NHL commissioner Gary Bettman called "a night of opportunity, renewal and anticipation," McDavid had breakfast with his family, spent some time drinking coffee and staring at the Atlantic Ocean and went jet-skiing to help make the hours pass more quickly.

He was cheered loudly at the Panthers' rink, which was crowded with more fans than attend on many game nights. Florida was last in the NHL in home attendance this year with an average of 11,265 spectators a game.

The crowd included a smattering of Oilers fans who made the long trip from Alberta to see the team get their man.

Randall Kemp, who is getting married in August, came from Edmonton as part of a prebachelor party celebration with his father, Murray, prospective father-in-law, Doug Coulter, and friend, Sean Piper.

"It is almost like the draft is our Stanley Cup," Piper, an engineer, said. "Nobody celebrates tiny victories like Edmonton Oilers fans."

Randall Kemp was at lunch with Coulter on April 18 when the Oilers overcame long odds to win the McDavid sweepstakes.

"We didn't think the Oilers would win and then the whole place erupted," he said. "I told Doug we won the lottery and he thought I meant the 6/49."

Standing outside in sweltering 33 C heat, Piper fretted that the Oilers may do something unexpected.

"If Peter Chiarelli walks on stage and announces a trade, we are going to burn the place down," he said.

With amplifiers blaring canned music by Miami's KC and the Sunshine Band, hundreds of spectators dressed in team sweaters waited outside for more than an hour for the doors to open.

Once inside, they quaffed brews, downed shots of Stoli at a bar in the lobby, lined up for autographs from Panthers' stars Jonathan Huberdeau and Aaron Ekblad, and booed lustily any time the Bruins, Canadiens, Rangers or Bettman was mentioned.

The rink was decorated for the draft, with photographs displayed of Guy Lafleur (1971), Mike Modano (1988), Vincent Lacavalier (1998), Alex Ovechkin (2004) and other No. 1 picks. Perhaps next year, when the draft convenes in Buffalo, McDavid's picture will be added to the exhibit.

The Sabres used the second pick to take defenceman Jack Eichel, while Arizona, picking third, chose McDavid's linemate in Erie, Dylan Strome.

Before the draft began, the two waved and made faces at one another from their seats.

Only the third 15-year-old ever given permission by Hockey Canada to play in the OHL, McDavid played in Erie for three years before ending his spectacular amateur career. He won awards as the OHL and CHL's top player this season, and helped Team Canada win a gold medal at the world junior championship.

Fans crowded into Rexall Place in Edmonton and bars and house parties raged around the city on Friday night to welcome him to the family.

"Ever since [the Oilers] won the lottery and I got the job, I have told myself that I have to temper expectations to help Connor," Chiarelli said earlier Friday during a news conference in Miami. "He is a terrific player and will help our franchise when he gets up and running.

"This is an exciting day."

McDavid said he is not worried about those expectations getting out of control. He has them, too.

"I think my expectations exceed any of those that anyone else puts on me," he said. "I just have to make sure I am playing my game. If I meet my expectations, the chances are I will meet everybody else's as well."

NHL Hall of Famer Bobby Orr, whose agency represents McDavid, said he expects great things.

"He is going to be a great player for a long time," Orr said. "He is going to represent our game so well.

"I look at what he has gone through these last three years and am impressed at how well he has handled it. He hasn't changed a bit since I met him."

TOP PICKS

No. 2 JACK EICHEL Buffalo Sabres

No. 3 DYLAN STROME Arizona Coyotes

No. 4 MITCHELL MARNER Toronto Maple Leafs

No. 5 NOAH HANIFIN Carolina Hurricanes

No. 6 PAVEL ZACHA New Jersey Devils

No. 7 IVAN PROVOROV Philadelphia Flyers

No. 8 ZACHARY WERENSKI Columbus Blue Jackets

No. 9 TIMO MEIER San Jose Sharks

No. 10 MIKKO RANTANEN Colorado Avalanche

Associated Graphic

Connor McDavid is presented with a team jersey after being selected as the No. 1 overall pick by the Edmonton Oilers in the 2015 NHL Draft at BB&T Center in Sunrise, Fla., on Friday.

STEVE MITCHELL/USA TODAY SPORTS

Connor McDavid hugs family members and friends after being picked No. 1 in the NHL Draft last night.

McDavid said he is not afraid of the high expectations being placed upon him by others.

PHOTOS BY STEVE MITCHELL/USA TODAY SPORTS

THE BALL'S IN HIS HANDS
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Reviving the Argos and making every team profitable are high on Jeffrey Orridge's to-do list, and the commish has a wealth of experience to help him, Rachel Brady writes in Toronto
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By RACHEL BRADY
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Thursday, June 25, 2015 – Print Edition, Page S1


Jeffrey Orridge knows plenty of commissioners.

The former head of sports at CBC has done business with Gary Bettman (NHL) and Adam Silver (NBA) for years. He has picked the brain of Roger Goodell (NFL) and dined with the former boss of the Canadian Footbal League, Mark Cohon. But the new CFL commissioner insists that while he's learned from each of those men, job comparisons don't really apply since each commissioner has to address issues specific to their sport.

The CFL that Orridge is taking on, in fact, is entering an entirely new era. Its 2015 season kicks off Thursday, less than two months after his first day on the job. And one of the things that makes it different is Orridge himself: The 54-year-old New York native is the first black commissioner of a major North American sports league, not to mention the first CFL commish who didn't grow up in Canada.

He inherits a league that made strides under Cohon. The league welcomed Ottawa back into the fold with the birth of the RedBlacks in 2014, and teams have replaced their crumbling stadiums with $2-billion worth of new facilities. The CFL struck a fresh TV deal with TSN, implemented its first drug-testing policy, and hammered out a new salary cap and fouryear collective bargaining agreement with the players.

But there's still plenty to do. Three-down football badly needs to attract younger fans, create rules aimed at making the game more exciting, make all nine franchises profitable and fix the Toronto Argonauts' dwindling popularity in the league's most vexing market.

Orridge, a Harvard-educated lawyer, draws on a diverse list of professional experiences, including stints working for brands such as Reebok, Mattel and Warner Brothers. He was on the marketing team behind USA Basketball's superstar-loaded 1992 Olympic Dream Team, he strategized for Right To Play when he first came to Canada, and he negotiated sports broadcast deals for the CBC.

"The league has advanced leaps and bounds from when Mark inherited this role eight years ago - we're no longer in turn-around mode," said Orridge, settling in for a lengthy interview at a park across the street from the CFL's head office. "Not every team is profitable yet, so that's the idea. And I want the fan experience inside and outside the stadiums to be the best in North America."

Orridge grew up in the borough of Queens, just a stone's throw from Shea Stadium, and he was wild about sports.

His father was a subway conductor, his mother a nurse and social worker. The man who today stands 5 foot 8 often jokes that he never got that growth spurt his parents promised him.

He played loads of sports anyway, starring in track and field and as a point guard through high school and at Amherst College.

Previous jobs, whether working for Reebok on Shaquille O'Neal's first branded shoe or promoting basketball's Dream Team stars, were far different than marketing Canada's working-class football players, but the appeal of heroes is universal.

"We have guys who should be household names and on cereal boxes in this country, but they're not," said Scott Flory, president of the CFL Players Association. "People need to get a better sense of how good our athletes are in the CFL. I think promotion of our players can be done a lot more."

During his tenure at CBC, Orridge helped to land broadcast rights for Olympic Games from 2014 through 2020 (as well as the upcoming Pan American/ Parapan American Games in Toronto) after other broadcasters lost their appetite for bidding wars. CBC was lauded for the popularity of its digital coverage in 2014 of the Sochi Winter Olympics and FIFA World Cup.

But under Orridge, CBC also lost its long-standing national rights to NHL broadcasts. But he arranged a deal with Rogers Communications Inc., the new rights-holder, to keep CBC staff involved in hockey production.

Some blamed Orridge for letting the NHL rights get away, while others said CBC never had a prayer of competing with Rogers' deep pockets.

"There were 5.2 billion reasons why CBC wasn't able to retain the rights to the NHL," Orridge said, alluding to the price Rogers paid in a 12-year deal. "I think the great thing was being able to salvage the relationship that hockey has with the Canadian public, that hockey is still on the national broadcaster and that it's free to air on Saturday nights. We turned something that wasn't ideal into optimizing revenue for the CBC."

The commissioner says he researched the CFL at length while he was at CBC and would have bid for its rights had they become available.

"Part of my strategy at CBC was to focus on properties that were uniquely Canadian, and the two most quintessentially Canadian were hockey and the CFL," Orridge said. "I knew how iconically Canadian it was, so it was really exciting when I got the call to be considered for the CFL commissioner's role."

Orridge was among the candidates identified by an executive search firm the league hired.

"He brings a lot of different perspectives than we had at the table before he joined us," said Andrew Wetenhall, who represents the Montreal Alouettes on the CFL's board of governors.

"We already have lots of people who remember Grey Cups from 30 years ago, but that's not all that helpful in securing fans in 2015 and beyond. I think we've found someone who understands the Canadian media landscape in a way that can really lead this league forward."

Since assuming the job, Orridge has presided over his first player entry draft and announced an extension to the CFL's deal with TSN through 2021. He has also had to address harsh criticisms of the league's drug policy after three university players who tested positive at this year's CFL combine this past spring were still drafted into the league.

He has announced a couple of deals that were well in hand before he took office. First was a partnership with Whistle Sports, a fast-growing online network that's reaching millions of millennial subscribers with unique sports content on its network of YouTube channels. Second was the sale of the Toronto Argonauts that includes their move from cavernous Rogers Centre to cozier BMO Field in 2016.

"[Former Argos owner] David Braley owning two teams gave the CFL a rinky-dink feel, and a sense of unsophistication, but the sale of the Argos helps with legitimacy," said Richard Powers, a professor at the University of Toronto's Rotman School of Management. "The pieces are all in place for this commissioner.

Now it's up to him to pull everything together and build on a successful rejuvenation of the league's brand."

"Throughout my career, I've been surrounded by really intelligent people who fostered my interests and marketing intelligence," said Orridge, who lives in Toronto with his wife and two sons, ages 10 and five. "I know I'm going to face challenges that are totally new, but I'm a problem-solver at heart, and I want to add value to this league."

Associated Graphic

A track man while at Amherst College, Orridge will have to be nimble in his new job.

KEVIN VAN PAASSEN FOR THE GLOBE AND MAIL

SHOW STOPPER
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On the first day of NHL free agency, the blockbuster trade of Kessel to the Penguins steals the spotlight. Crosby and Malkin get a winger with scoring touch and baggage, while general managers spend frugally on a modest group of options
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By ERIC DUHATSCHEK
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Thursday, July 2, 2015 – Print Edition, Page S1


eduhatschek@globeandmail.com

The long-awaited exile of Phil Kessel upstaged everything else that happened on the opening day of the NHL free-agent season, which proved to be a slightly different animal this year anyway.

Usually, it's a day when teams imagine they can turn frogs into princes with the single stroke of a pen, only to discover how quickly the clock can strike midnight on the Ville Leinos and Jeff Fingers of the world.

There was a little of that Wednesday, but generally teams spent more judiciously than in the past - offering shorter terms and fewer dollars, thereby shielding themselves from deals that immediately inspire buyer's remorse.

Just how the Maple Leafs' trade of Kessel to the Pittsburgh Penguins, in a much-anticipated blockbuster deal, plays out will be fascinating to watch. Kessel provides an immediate solution to a problem that has been ailing Pittsburgh virtually since the start of the Sidney Crosby era - not enough quality wingers to support him and Evgeni Malkin, the Penguins' two all-star centrepieces.

In Kessel, the Penguins get a player who spent most of the past year going through the motions, but has that rare ability to score goals in an offensively challenged league.

If Kessel can get his head on straight and be motivated by the opportunity to play with someone of Crosby or Malkin's pedigree, he could have a major bounce-back year. It will all hinge on Kessel's attitude - and on Penguins coach Mike Johnston's ability to get him out of cruise control and playing with a purpose.

Apart from Nick Spaling, the players coming Toronto's way include two former first-round picks in Kasperi Kapanen and Scott Harrington, plus a lotteryprotected 2016 first-rounder.

Kapanen is the son of former NHLer Sami Kapanen; he joins an organization that last year drafted William Nylander, son of former NHLer Michael Nylander.

If bloodlines matter, that's a good start. But ultimately it will be up to the Leafs organization - coach Mike Babcock or the new minorleague boss, Sheldon Keefe - to turn them into productive pros.

Unlike the past two years, when close to $1-billion was committed to players on Canada Day 2013 and 2014, only a handful of teams splurged on a class of modest talent that featured just a single player who cracked the top-100 in scoring last season.

That was centre Mike Ribeiro, who is returning for two additional years to the Nashville Predators for $3.5-million (U.S.) a season, a value buy on a day full of them.

Among the forwards who switched teams, the No. 1 addition was arguably Michael Frolik, a strategic add for the Calgary Flames, who liked his versatility and experience. Every coach who has had Frolik - from the Chicago Blackhawks' Joel Quenneville to the Winnipeg Jets' Paul Maurice - prized his hockey sense and commitment. He is the quintessential low-maintenance forward who can play up or down your depth chart, but to get him the Flames had to pony up $21.5-million over five years, lots of cash for a player who scored 42 points in each of the past two seasons.

Frolik's blueline equivalent was Andrej Sekera, who earned a monster six-year, $33-million contract deal with the Edmonton Oilers. Sekera is 29 and has the chance to play first-pair minutes with the Oilers, who now suddenly have a glut of defencemen in the organization after adding Eric Gryba and Griffin Reinhart at the NHL entry draft last week.

The Oilers also added depth centre Mark Letestu, who had been with the Columbus Blue Jackets most recently, but would have had a difficult time getting minutes on a team so deep up front.

The Oilers will have a vastly new look next year, from the goal out, where Cam Talbot is pencilled in as the new starter.

Sekera, Gryba and Reinhart represent a 50-per-cent turnover on what was formerly a thin blueline in Edmonton.

Frolik's departure in Winnipeg opens up a roster spot for Alex Burmistrov, who returns to the Jets' organization, after playing in the Kontinental Hockey League the past two seasons for Ak Bars Kazan. Burmistrov, 23, was the eighth overall pick in the 2010 draft. Older, more mature, with the chance to play for a coach - Maurice - who has worked in the KHL before can only enhance Burmistrov's prospects of finally reaching his full potential.

The Vancouver Canucks ended the Zach Kassian years, sending him to the Montreal Canadiens for heart-and-soul forward Brandon Prust. At 5-foot-11, 195, Prust almost always gets the most out of his skill set. If Kassian, at 6-foot-3, 226, can find the consistency that he has never been able to achieve at the NHL level on a Canadiens team with real needs on its right side, it will be gamble worth taking - a big if.

Kassian's arrival continues the subtle youth movement under way in Montreal under general manager Marc Bergevin - a 31year-old swapped out for a 24year-old - as the Canadiens attempt to get both bigger and spryer.

The Flames also re-signed goaltender Karri Ramo, who was looking for a multiyear contract extension from a team on which he could challenge to be the No. 1 goaltender. Once all the open goaltending slots were filled, however, Ramo's camp circled back to his original team and settled for a one-year deal worth $3.9-million.

The thought there is that, with Jonas Hiller's contract set to expire at the end of next year, Ramo's best chance to win a starting job is probably back in Calgary, where he finished the year as the No. 1 guy.

The addition of Connor McDavid headlined the Oilers' off-season moves, while stealing Dougie Hamilton away from the Boston Bruins was Calgary's response. There is an arms race under way in Alberta that mirrors what happened in the 1980s, back when Edmonton and Calgary were among the top handful of teams in the NHL, and also illustrates how quickly perceptions can change.

Two years ago, Edmonton and Calgary were pretty much where Toronto is now - poor teams that, as destinations, ranked right at the bottom of the NHL standings. The fact that they're in there swinging - and connecting - tells you that fortunes can turn in a heartbeat.

Maybe moving Kessel starts the Leafs down the same path that began in Calgary when they swallowed hard a few years back and started trading away the likes of Jarome Iginla, Jay Bouwmeester, Mike Cammalleri and Alex Tanguay.

Every turnaround has to start somewhere, right?

Follow me on Twitter: @eduhatschek

Associated Graphic

The Toronto Maple Leafs traded star winger Phil Kessel to the Pittsburgh Penguins on Wednesday, the opening day of the NHL free-agent season.

CHRIS YOUNG/THE CANADIAN PRESS

A NEW BALL GAME?
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As her losing streak continues, Bouchard needs to call it a day and take stock of what really counts in her life. Hint: not junkets, photo shoots, Instagram or even this season itself
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By CATHAL KELLY
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Wednesday, July 1, 2015 – Print Edition, Page S1


ckelly@globeandmail.com

One year removed from her great coming-out party in London, Eugenie Bouchard is now in search of somewhere to hide.

She lost on Tuesday. Again.

That's long past sounding familiar.

This latest humiliation came at the hands of China's Ying-Ying Duan, a comprehensive 7-6 (3), 6-4 defeat in her opening match at the All England Club.

Duan is 25 - middle-aged in terms of the women's game.

She'd never played at Wimbledon before. She'd never won a match at a Grand Slam event. She'd never beaten anyone ranked higher than 75th in the world. Duan is the chum of professional tennis.

Against Bouchard, she looked like Steffi Graf time-warped in from 1988.

Technically, Duan didn't beat Bouchard. She waited for Bouchard to beat herself. As the match slipped away, Bouchard began to spray shots about like she was operating a T-shirt cannon. Afterward, she said she is suffering from an abdominal tear and had been advised against playing, but this was something more than a physical limitation.

You could see it in the way she stabbed at balls, spun about after lost points, and spent most of the match staring forlornly at the ground a foot in front of her.

Aged only 21, Bouchard no longer gets defeated. Rather, she is defeated. It's become a permanent state.

Eight months ago, she was ranked fifth in the world. After Tuesday's loss, she'll fall out of the top 20. Based on her recent form (12 losses in 14 singles matches - many of them to players no one has ever heard of), her descent is only beginning to pick up speed.

"Probably wasn't a smart decision," Bouchard said of her choice to play, adopting her increasingly familiar look of vapid defiance. "But I had to do it."

No, she didn't. She isn't going to play her way out of this. Not in her current mental state. And she has no one she can trust to tell her that.

A year ago, she couldn't put a foot wrong. Maybe that was the problem. Bouchard had begun to believe she was solely responsible for her good fortune.

That's not how sports work. It takes a village to build a modern tennis player. It takes a pretty sizable town to maintain one. When things are going well, you don't look around and say to yourself, "You know what I need to do now? Change everything."

That's what Bouchard did.

After last season, she fired her long-time coach, Nick Saviano.

During the 2014 U.S. Open, you could tell Saviano already knew he was in for the chop. He had the look. I suppose you or I would be more than a little put out as well if we'd taken someone from an anonymous grade-schooler to a Wimbledon finalist and been thanked for it with a pink slip.

She replaced Saviano with Sam Sumyk, who coached Victoria Azarenka when she was world No. 1. Sumyk ditched the Belarussian when she was beset by pernicious injury problems. You can see how this new match was karmically doomed.

During Tuesday's match, Sumyk was sitting courtside. As it went steadily sideways, he dipped lower and lower in his seat behind the front-row hoarding. By the end, he looked as if he were peeking over the lip of a trench.

Sumyk's professional reputation is taking steady fire. This was another direct hit.

Bouchard made a point of saying she's sticking with him, which sounds like the kiss of death. She also said she isn't strong enough, and needs a new trainer. What wonderful news for the old trainer.

While she was dumping Saviano, Bouchard also switched agents. She torpedoed the boutique Washington, D.C., sports agency that discovered her and specializes in tennis. She replaced them with the monolithic entertainment industrial complex, William Morris Endeavour-International Management Group (WME-IMG). It's like deciding to partner your after-work knitting business with Apple, but still hoping for the personal touch.

WME-IMG is not interested in developing players. It constructs brands. A lot has been snidely made of Bouchard's sudden obsession with having her picture taken, but the problem isn't vanity. It's hiring a vast group of people who don't make money when you're out on the practice court at 6 a.m. They get rich when you're on the road schilling energy drinks in Beijing or sneakers in Dubai. Those people don't care if you win. Until you don't. And then they don't care about you at all.

That must suddenly be on her mind now. After Bouchard's humiliating run through 2015, who wouldn't think to themselves, "Is this it?" It isn't. Not even close. But every successive loss adds another layer to her mental scar tissue. Eventually, she could become so beaten down, no motivator will be able to rescue her confidence.

That's why she should call it a season. Right now. Abandon the game, the photo shoots, the professional junkets and the corrosive doubt for a few months. For God's sake, get off Instagram.

Stop worrying about what other people think. Have a long ponder about what you really want. I'm presuming it begins and ends with winning major championships; put your sole focus on that idea.

Lie about an injury if you have to. Fire more people if you have to. Just escape. What Bouchard needs now is the anonymity of a practice court, and the protection of a few reliable lieutenants who can begin to rebuild her.

"If I have people who don't agree with what I do - haters - I think that means I've at least achieved something in life. I've done something," Bouchard told CBC prior to the tournament.

She's right. We build them up to tear them down. Athletes are the viewing public's sandcastles. People take malevolent joy in kicking them apart.

Unless Bouchard takes immediate and drastic action, she soon won't have to worry about people feeling any particular way about her at all. She'll be on the way to forgetting herself, and being forgotten in turn.

Follow me on Twitter: @cathalkelly

Associated Graphic

Canada's Eugenie Bouchard lost her first-round match against China's Ying-Ying Duan during Day 2 of the Wimbledon tournament on Tuesday. Bouchard's poor season means that she has to take immediate action to avoid losing herself and becoming forgotten.

CLIVE BRUNSKILL/GETTY IMAGES

Fear, relief and happiness in Florida
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After months of anticipation and a weekend of celebration, Marty Klinkenberg writes that with the draft's end, the real work now begins for hockey's newest players
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By MARTY KLINKENBERG
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Monday, June 29, 2015 – Print Edition, Page S1


FORT LAUDERDALE, FLA. -- Connor McDavid's NHL career officially began on a blistering, dripping-wet day in an arena on the edge of the Everglades, an odd venue for the coronation of the sport's most-celebrated recruit since Sidney Crosby.

The NHL draft was held Friday and Saturday at the Florida Panthers' home rink in Sunrise, 30 kilometres from the beaches of Fort Lauderdale, a lovely city but one in which hockey still struggles to gain a foothold.

It is not Montreal or Toronto or any of the other original six cities; in fact, when it comes to Canada's pastime, it is not even Tampa, whose Lightning were finalists for this year's Stanley Cup.

But the sport's most important day in 10 years didn't wilt in the heat of suburban South Florida.

Perhaps it is McDavid's rising celebrity. Perhaps there is increased interest in a hometown team that is beginning to improve. Or maybe people simply wanted to go somewhere with air conditioning.

The number of fans who turned out at the BB&T Center on the weekend was a huge surprise.

A franchise that drew a league-low 11,265 a home game in the most recent season attracted several thousand more for McDavid's ordination, and about half that on the second day, which is usually an intimate gathering attended mainly by hopeful players' families and friends.

Nearly all of the seats made available were full on Friday night, with standing-room-only in several sections. The NHL estimated the crowd at 10,500, but team officials thought the figure was way too low.

"The Panthers did a good job promoting the event," said Don Renzulli, the senior vice-president of events and entertainment for the NHL. [On Friday] there were a few empty seats here and there, but that's about it."

Peter Luukko, the Panthers' executive chairman, said he has probably attended 20 drafts and has never seen a larger secondday crowd.

"I am left with a pretty warm feeling," Luukko said. The longtime president of the Philadelphia Flyers joined the Panthers in February. "I have no doubt this market can support hockey. It's roughly the same size as Philadelphia, and there is no reason it can't succeed.

"It's our charge to put a better product on the ice. It is clear to me that there is interest here."

There have been rumblings that the team is potentially a candidate for relocation, seeming to suffer from the same malaise that afflicted the Thrashers in Atlanta and has stymied the Coyotes in the Arizona desert. Las Vegas has an arena under construction and approval to begin pursuing a franchise from the NHL, in case any established warm-weather teams get cold feet.

The Panthers' arena is far from the oceanfront in Fort Lauderdale, and a 45-minute drive from the hotels the NHL chose as the host sites. The rink is adjacent to a massive outlet mall called Sawgrass Mills - named for the tall grass that airboats plow through in the Everglades.

Whether alligators and Aaron Ekblad, the young Panthers star and the league's best rookie this season, go well together remains open to debate.

But the draft itself made for lively if not compelling theatre, on Friday night especially. There was little secret Edmonton would select McDavid, a brilliant, 18year-old centre who has dominated at every level he has played, lastly for the Erie Otters of the Ontario Hockey League.

He is wickedly fast and wields a hockey stick like a magic wand, has not yet grown out of his freshly scrubbed baby face and is most obliging to fans, even if he is too young yet to be deeply engaging.

Peter Chiarelli, the Oilers general manager, said Saturday that he does not expect McDavid to have significant impact immediately.

But there have only been a handful of prospects to enter the NHL with such enormous fanfare - Guy Lafleur, Mario Lemieux, Eric Lindros and Crosby, arguably.

Fans dressed in various teams' stripes cheered when McDavid's name was called, beginning a 3 /2-hour first round. Sabres fans 1 roared when Jack Eichel, the Boston University star, was taken with the second choice, and have already coined a motto in his honour - Jack to the Future. Panthers fans raised an enthusiastic ruckus when Lawson Crouse, a big, rough-and-tumble winger most recently skating for the Kingston Frontenacs, unexpectedly fell into their lap at pick No. 11.

By comparison, Saturday's second, third, fourth, fifth, sixth and seventh rounds offered many names but little intrigue. Teams blew through their selections, finishing in about the same amount of time it took to conclude Friday's prime-time blockbuster.

Trades created more excitement on the second day than the draft itself, with Edmonton getting much-needed help in goaltender Cam Talbot from the Rangers, the Canucks dealing netminder Eddie Lack to the Hurricanes and Dallas acquiring goalie Antti Niemi from San Jose.

The last player chosen on Saturday was John Dahlstrom of Sweden, a forward taken 211th by the Chicago Blackhawks. The 18-yearold waited about seven hours over two days to hear his name.

"I feel a sense of relief," Dahlstrom said.

He arrived in North America three weeks ago to attend the NHL combine in Buffalo and then spent a week doing high-altitude training in Aspen, Colo., before heading to Fort Lauderdale on Wednesday.

On Friday night, he was surprised by the raucous crowd and got caught up in the excitement of seeing McDavid welcomed into professional hockey. On Saturday, he sat, fretting, his hopes fading with the proceedings.

"At the end, I just sat there and hoped for Chicago," he said. "That was my last chance. I am just happy to get drafted."

There is much more at stake for McDavid. He and his family flew back to Toronto on Sunday and were then heading home to Newmarket, Ont. On Tuesday, he will fly to Edmonton where long-suffering fans are so jubilant it won't take much for them to offer him the keys to the city.

He will undergo a physical exam on Wednesday with other rookies, and likely take to the ice for the first time Thursday at the outset of the team's development camp.

After being selected on Friday night, McDavid partied into the wee hours with his family.

"We didn't want the day to end," his mother, Kelly, said Sunday.

Now the hard work really begins.

THE CLASS OF THE DRAFT
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Top pick Karl-Anthony Towns is off to Minnesota to join Andrew Wiggins, adding to the promise of the Timberwolves' future, while Utah point guard Delon Wright has a chance to replace the Raptors' departed backup point guard, Greivis Vasquez
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By CATHAL KELLY
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Friday, June 26, 2015 – Print Edition, Page S1


ckelly@globeandmail.com

Ten months ago, Andrew Wiggins came home to shoot a TV commercial. He didn't look very happy.

Wiggins was in the process of being stuffed in a burlap sack and tossed overboard by the Cleveland Cavaliers. A few weeks before, he'd been the new Jordan, an untouchable talent. Now he was a makeweight in a trade between a very good team and a very bad one, the Minnesota Timberwolves. He was going the wrong way, and he knew it.

Where do you want to go, someone asked. "Wherever God wants," Wiggins said. He said it like he was about to be taken in to the ICU on a gurney.

Still, you had a sense it was the best thing for him.

From the perspective of Friday morning, it looks like an epochal piece of good fortune. On Thursday, Minnesota used its first pick in the 2015 NBA draft to take centre Karl-Anthony Towns of the University of Kentucky.

By all accounts, Towns is Wiggins, just a few months younger and a lot bigger. Like the Vaughan, Ont., product, Towns is bigbodied - 6 foot 11, 250 lbs. - and a remarkable two-way player whose game is still unpolished.

At worst, he's a formidable regular from the start. At best - and also like Wiggins - he's a future Hall of Famer.

Minnesota won't be good next year, or the year after that. Three years from now, they'll be a playoff team. Five years? If everything goes right, they're a championship contender.

From a Canadian perspective - or any other kind - Wiggins' career could not be playing out more perfectly. He's the NBA Rookie of the Year. He'll start his work at turning Canada into a global basketball powerhouse this summer. If Canada qualifies for Rio 2016, that's our new summer Olympic glamour sport.

And now, in Towns, Wiggins is book-ended with a contemporary who is noted as a warm, intelligent presence as well as a great player.

In five years, Wiggins and Towns could be the new Jordan and Pippen - except their teammates will like them.

Beyond Towns, draft night was a little weird.

The No. 2 pick was point guard D'Angelo Russell, taken by the L.A. Lakers. The Lakers are in the midst of a quickie rebuild, trying to take advantage of what will likely be Kobe Bryant's farewell tour.

Poor Russell. You can just imagine how warm and forgiving Bryant will be, knowing he has only one more year to cement his legacy.

Russell apparently has no idea what he's in for.

"I want [Bryant] to take me under his wing," the teenager said.

Yes. He might do that. If he's holding a pillow over your face while he's doing it. Consider hiring bodyguards.

While Towns was being feted, the camera repeatedly swiveled to a grim looking Jahlil Okafor.

Two months ago, the Duke centre was most people's number-one choice - the most proready of any man in the draft.

Then Golden State won the title by leaning on shot-taking and spacing. With every series victory, the Warriors devalued bruising big men everywhere.

Okafor went third to the Philadelphia 76ers. Nerlens Noel, Joel Embiid and Okafor - Philadelphia now has three big men of the future. Unfortunately, they can't all play while sitting on each other's shoulders.

Immediately after the pick, Embiid tweeted, "OK Lol."

Oh, this should be good.

Fittingly, Okafor looked overjoyed in his exit interview.

"I'm excited," Okafor said.

He was not excited.

"I'm in the NBA," Okafor said.

At least that's true. Just barely.

It could've been worse - he could be Kristaps Porzingis. The draft was held in Brooklyn, giving New York Knicks fans an excuse to cross the East River.

As you may know, the Knicks are just barely a professional sports club. They're the Maple Leafs of basketball. The Knicks needed an immediate boost.

Instead, they took the 19-year-old Latvian.

Porzingis, who looks like one of those inflatable-tube-men you'd spot flapping outside a roadside fireworks shack, cannot help any team right now. He'll spend several years being whipped around on the court like a stop-sign in a hurricane.

Knicks fans on hand booed him relentlessly. One irritatingly self-aware young man was filming himself crying.

The only person who's going to be happy about this choice is much-loved former Toronto institution and current free agent Andrea Bargnani. Now there's someone Manhattan basketball aficionados hate even more than him.

Beyond the first three picks - all players expected to be aboveaverage starters - and the looming disaster of Porzingis, this draft lacked a theme.

There were a few international men of mystery (Croatia's Mario Hezonja, the No. 5 pick by Orlando; and Emmanuel Mudiay, the No. 7 pick by Denver, who skipped college to play professionally in China). It was largely a mix of positions and types, and many of these guys will never again get as much attention as they've received in the past week.

At the 20th pick, the Toronto Raptors chose University of Utah senior Delon Wright, a defensiveminded point guard. He'll have a shot at replacing current backup Greivis Vasquez, who earlier in the evening was traded to Milwaukee for the 46th pick this year and a 2017 first-round pick.

New York aside, teams weren't looking to go all in. They preferred value bets.

Since it is so different in form and content from the NBA, success in the college game is an erratic predictor of professional success. Scouts are looking at these teenagers as raw physical material. Most of them will have to be re-taught the finer points.

There were a great many of those sorts of unfinished talents picked this year. A few - maybe one or two beyond the top three - will become names the casual fan recognizes.

Since every team is full of talent evaluators who know what they're doing, it isn't a question of who picked best. It's a function of who guessed right.

Associated Graphic

Karl-Anthony Towns holds a selfie stick with other top prospects before the start of the first round of the 2015 NBA Draft at Barclays Center on Thursday in Brooklyn, N.Y.

ELSA/GETTY IMAGES

For Pospisil, it is all in the (often unfortunate) timing
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By CATHAL KELLY
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Monday, July 6, 2015 – Print Edition, Page S1


LONDON -- ckelly@globeandmail.com

A year ago, nearly to the day, Vancouver's Vasek Pospisil won at Wimbledon.

He may as well have won a one-man thumb-wrestling contest for all the attention it got.

On the same second Saturday, most Canadian outlets were pulling out the black veil to mourn Eugenie Bouchard's crushing final loss.

Bouchard had got us all worked up into one of those "It's Our Time!" moments we tend to get like hot flashes ever since the 2010 Olympics. As in a bunch of other cases, it wasn't our time. In fact, we only noticed afterward that our watch was broken.

A few hours after Bouchard lay down and died on centre court, Pospisil won a doubles title. The 25-year-old entered ranked 179th in the discipline. He and partner Jack Sock were playing in their first tournament together. They beat Bob and Mike Bryan, far and away the best duo in history.

Any other year, that's a big deal.

But it didn't fit with the rending-our-garments narrative, plus nobody rates doubles because ... well, I'm not sure why. They just don't.

So a significant moment in Canadian tennis history got wedged into the briefs.

You suspect that some of this has to do with Pospisil himself.

There is precious little room in modern tennis for the chillaxed and ever-so-slightly goofy dude.

Male players are expected to give off either the eerie poise of a Roger Federer or do the shrieking Visigoth impersonation of an Andy Murray.

Serious. Everybody's got to be serious, and never more serious than when they are on a tennis court doing tennis things and, later, when they are talking about the tennis things they did.

You can save your emotional release for actual championships, which is why schmaltzy Novak Djokovic gets a pass on his more than-occasional forays into Henny Youngman territory ("Hey, it's a joke. It's a joke.").

What gives the Serb "character" as a champion would be viewed as a mental flaw if he were anything less than No. 1 in the world.

Canada's two great hopes, Bouchard and Milos Raonic, have learned that lesson.

If you watch either of them doing a postmatch interview with the sound muted, you could imagine they were discussing the date on which the sun will burn itself out and all life on Earth will end.

They do not look as though they're having much fun. Ever.

Raonic in particular approaches his work with the grimness of a hangman.

You can see why. He's been a comer for an awfully long time.

Though only 24, there is the sense that he's peaked, and will have to struggle mightily just to maintain a spot with the world's also-rans.

That tension is alive, though unspoken, every time Raonic takes a court or approaches a mic.

You don't feel that heaviness around Pospisil. Some might argue it's why he's not as good. I prefer to think that's just who he is.

Win or lose, there is no marked difference in his demeanour - genuine smile, happy to share, a lot of "aw shucks" in his voice. Off the court, he is almost permanently elated.

He can't help but see how lucky he is to do this for a living. Every pro tennis player is enormously gifted, but very few are fortunate enough to have that attitude.

Pospisil is the sort of player who makes you believe something you know isn't true - that they'd all play the game for free. And so we've largely ignored him.

Fans trust results. Pospisil has done well, but never won anything of consequence by himself.

In another era, he'd be one of Canada's most recognizable athletic faces. Instead, his contemporaries have eclipsed him. Bad timing has done him in.

A different player could be forgiven for a small amount of bitterness at his luck. Pospisil doesn't need forgiving. It has probably never occurred to him to feel bad for himself. He is finally about to have his own moment. For the first time in his career, Pospisil has reached the second week of a major tournament in singles.

On Monday morning (6:30 ET), Pospisil will become only the fourth Canadian man to play in the fourth-round at Wimbledon.

His opponent is Serbia's Viktor Troicki.

Troicki is a savvy veteran - meaning he's not that good, but he's good enough. He's been on a bit of a personal tear lately, reaching his first grass-court final in the lead-up to this tournament. He hasn't faced anyone of consequence here, and been effective.

Pospisil is flat grinding. He's played 14 sets in three matches.

His last win came in a hothouse atmosphere against a British opponent receiving huge crowd support.

For a guy who's never been here, Pospisil's already been through a lot.

He looks relaxed, but he always looks relaxed. He'd be smiling that wonky smile 10 seconds before he went over the trench wall into No Man's Land.

Given all that, it's unfair to expect Pospisil to win. It's also a lot of fun to think about.

Over the past two or three years, Canadian fans have entirely shifted what they expect when they watch tennis. Now, they want to see Canadians.

It's great for the sport nationally, but it does tend to sap just a little of the joy out of a major tournament. What you could once watch purely as spectacle has now become something practical.

You need a result. Without the result, the whole thing is a disappointment.

Pospisil is the cure for that feeling. We don't need him to win. We want him to win, because he seems like the sort of person who'd appreciate it.

Whether or not it's Pospisil's day, it's worth reminding ourselves that a few people have the ability to play these games at the highest level, but without expectation. They play to play.

That ability cannot be taught, and should be savoured whenever it is seen.

Follow me on Twitter: @cathalkelly

Biggest question for the Leafs is, who goes next?
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By JAMES MIRTLE
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Friday, July 3, 2015 – Print Edition, Page S1


TORONTO -- jmirtle@globeandmail.com

In his first full day as a Pittsburgh Penguin, Phil Kessel made the media rounds in his new home with a series of phone calls to curious reporters.

Little of what was said was earth-shattering. He was surprised to be traded. He was excited to play with Sidney Crosby and/or Evgeni Malkin. He intends to train with fitness guru Gary Roberts - now based in Pittsburgh - at some point this summer.

And he was happy - after six trying years in Toronto with a Maple Leafs team that's now slowly being pulled apart - to have a "fresh start."

"I'm actually really excited about that part of it," Kessel told DKonPittsburghSports.com.

Now the Leafs Rebuild Watch 2015TM turns to everyone else.

After making a few decent short-term bets in free-agent flotsam on July 1, this is where the roster currently stands: Twelve forwards, with newcomers P.A. Parenteau, Dan Winnik, Nick Spaling and Mark Arcobello filling in some of the blanks and Nazem Kadri awaiting a new contract.

Eight defencemen, after the additions of Matt Hunwick, Martin Marincin and T.J. Brennan.

And the same two goalies of the past two seasons, Jonathan Bernier (who also needs a new deal) and James Reimer.

It's enough to start the season.

It's enough to keep all of the kids down with the Marlies, too, which is the plan, because this won't be a pretty season minus Kessel.

It also leaves the Leafs with roughly $10.5-million in cap space - depending on what Kadri and Bernier sign for - to do something else.

There'll be even more than that if some of their big-ticket contracts are thrown overboard in the coming months.

Don't expect captain Dion Phaneuf to be one of them, however.

It's not impossible he moves, but it appears improbable. When teams have asked about his availability in the past two weeks, they haven't been told no. Instead, the Leafs have requested a return that includes a good prospect and no salary retained on their books.

In the NHL's current climate, with a lot of free-agent defencemen signed and many teams settled on the blueline, that's a big ask for such a big contract. (Phaneuf has six years at $7-million a season remaining.)

Leafs coach Mike Babcock also wants to see what he can do with Phaneuf. Can he be more than he has been under Ron Wilson and Randy Carlyle? In Phaneuf, Babcock sees a willing pupil, a player who works hard and buys in, but who is asked to do too much without a lot of help.

Maybe he can rehabilitate him?

Maybe that helps the Leafs move Phaneuf at next year's trade deadline?

For now, however, it appears he is staying put.

That really only leaves two other members of Toronto's longstanding "core" left to ponder: Tyler Bozak and Joffrey Lupul.

Both would like to stay, or at least that was the sense before Kessel was dealt on Wednesday.

The Leafs have been getting interest and even offers on Bozak now for a while, with the inquiring Arizona Coyotes the best fit until they signed Antoine Vermette.

(One neutral party familiar with what the Leafs were offered for Bozak said they were surprised they hadn't taken the deal.)

Lupul, however, is going to be a tougher player to move, primarily because of his extensive injury history and large contract.

The Leafs will likely have to retain salary (bad) or accept a bad contract back (okay if it's two years or less).

The best play there may be is to wait until the trade deadline, as Lupul did have suitors at that point back in March.

For now, the Leafs can afford to be patient.

Around the NHL, a lot of teams are taking that stance. The freeagent frenzy on July 1 was much less frenzied than many expected, and by Day 2, the landscape was dead - save for the Washington Capitals acquiring T.J. Oshie in an odd deal with the St. Louis Blues.

There's a logjam of bad contracts and capped-out teams out there, which has created an anxious waiting game for the dozen or so good free agents - such as former Leafs defenceman Cody Franson - still available.

Teams, such as the Leafs, can take advantage of that. Toronto could, for example, acquire an unwanted player and an asset from a team contemplating a buyout, saving said team the cap penalty involved. There are interesting options, especially as the rare team that has money to spend to land picks and prospects.

The Kessel move was the big one, but the Leafs aren't done.

This group of 22 players isn't going to be the 22 who are on the roster on opening day, not with so many other transactions happening around the league.

Their push to get younger - and not necessarily better right away - simply may take a while.

Follow me on Twitter: @mirtle

In reshaping his squad, Herdman faces a critical crossroads
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By DAVID EBNER
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Tuesday, June 30, 2015 – Print Edition, Page S1


Canada's primary roster at the 2015 Women's World Cup was largely similar to the team fielded three years earlier at the 2012 London Olympics. Team coach John Herdman's next key decision is how much change comes in the 14 months leading to the 2016 Rio de Janeiro Games.

Do veterans, again, get most of the key positions, or do more younger players see prominent roles? What will happened to stalwarts such as 33-year-old forward Melissa Tancredi and 31-year-old defender Lauren Sesselmann?

Canada's goal, after losing 2-1 to England in the World Cup quarter-finals on Saturday, is to reach the podium in Rio, at least a repeat of the 2012 bronze. That seems unlikely to occur, given that the roster is in transition. But the team receives significant backing from Own The Podium, and an Olympic medal has to be the outward aim, even if it's not realistic.

On Monday, Herdman leaned on what might have been, and how close the current World Cup has been. He pointed to the fact that Norway tied Germany, the world No. 1, and Colombia upset France, another world power.

With a few breaks, he said, Canada could have been in the semifinals: He declared Canada to be the better team on Saturday - despite losing to England for the fourth consecutive time in four years.

The tangible question is who will play in 2016. Fourteen women, including substitutes, played for Canada in the 2012 bronzemedal game. More than half of them were starters against England on Saturday, seven of 11 players. Herdman, in an interview on Monday, spoke about needing veterans who had experience on a stage such as the Olympics to be able to play in the hothouse of a home World Cup.

"People have to go away from this, process it and reflect on where they want to be in their football careers coming out of this," Herdman said.

Some older players may choose to retire from the national team.

"Others," Herdman said, "will not want to give this up. We might have to make some hard decisions."

Although Herdman was available Monday, the players didn't speak.

Most of them didn't speak after the England loss, either. Sesselmann, writing on Instagram late on Sunday to respond to widespread criticism of her play, said: "We will be back and we will be better."

Staff will consider the team's failings and look at younger players coming up who are, in Herdman's words, "on the cusp of providing us what we need."

Still, Herdman faces the same challenge in 2016 as he did this year - a lack of players in their prime. Does he cut a veteran, with experience playing in front of 54,000 people, to put a younger player on the Olympic roster who has no big-time experience?

Herdman suggested the decision depended on "whether the gamble on youth is greater or worse than the gamble on keeping older players who are starting to move late into their careers."

Twenty-year-old defender Rebecca Quinn, for one, was in contention for the World Cup roster and will be a key player at the Pan American Games, where Canada fields an under-23 team even though countries such as Brazil and Mexico will field senior teams. It will be, for Herdman, an important test to see a new face or two who could be ready for Rio.

Certainties for Rio - for which Canada has to qualify in January, but is expected to make it - are the likes of Christine Sinclair and young star Kadeisha Buchanan. Diana Matheson, the 31year-old veteran who scored the bronze-winning goal in 2012 but barely played at the World Cup because of injury, will be a part of the squad. Herdman sees Josée Bélanger fitting in as a defender.

The biggest problem remains who will score goals. In five World Cup games, Canada had only four, one of which was from a penalty kick.

The goal in Rio may be the podium, but Herdman is frank.

If Canada has a true future as a contender, it's some years away, at the end of the decade. In Rio, Herdman acknowledged, the team will be like 2015, a scrappy juggling act: "We may not have the best Canadian team that's ever stepped on the pitch."

Contents
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Friday, June 26, 2015 – Print Edition, Page P1


FEATURES | 07/15

22 | The little engine factory that could

Bombardier is spinning off a chunk of its rail division--which accounts for almost half of the company's total revenue--to prop up its struggling plane unit. In the end, though, all tracks may lead to China. /By Eric Reguly

28 | The rookies

We dissect the challenges, missteps and prospects for 10 new Top 1000 CEOs (including three Big Bank bosses), plus the new guy at the country's largest private company, Walmart Canada. /By Christine Dobby, Jeffrey Jones, Tim Kiladze, Marina Strauss

32 | Department of foreign affairs

These 10 companies are chasing growth outside Canada--for better or for worse. /By David Berman, Brenda Bouw, John Daly, Shane Dingman, Iain Marlow, Bertrand Marotte, Alec Scott, Marina Strauss

46 | The quick and the dead

The collapse in oil prices gives prudent oil-patch players an opportunity to buy up over-leveraged competitors. /By Jeffrey Jones

51 | Introduction: Crisis?

What crisis? /By Brian Milner

54 | The Top 1000 Canadian companies

70 | 50 biggest private companies

71 | 100 biggest companies by revenue

72 | 100 biggest companies by market cap

73 | 100 biggest companies by return on equity

74 | Industry rankings

77 | Index

DEPARTMENTS

5 | Feedback

7 | The Interview

Don Sadoway's students at MIT love him. So does Bill Gates, who is backing the Canadian electrochemist's molten metal battery

10 | Made in Canada

Finding yourself up a creek with one of these hand-crafted paddles is actually pretty sweet

12 | Graphic Details

Streaming services like Netflix are gaining ground, but we can't seem to give up our pirating ways (just ask HBO)

14 | Corporate Governess

Sure, take your interns out for beers--but remember who's the grown-up. And speaking of grown-ups, change that dorky ring tone post-haste

16 | Disruption

Most of us carry small tracking devices--a.k.a. smartphones--in our pockets, and advertisers are finally figuring out how to use our location to sell us stuff on the go

18 | Venture

Aeryon has sold camera-bearing drones to Libyan rebels, the Saudi military--and fat-fingered police

82 | Exit Interview

If Toronto's ex-chief-of-police Bill Blair thought being a cop was tough, just wait until he wades into federal politics

Associated Graphic

22 All aboard the industryconsolidation express!

Cover Photographed Exclusively For Report On Business Magazine By Chris Labrooy; (Right) Luca Locatelli/The Institute Artist

32 Com Dev's roster of international space projects is looking up--way up

Phtograph Chris David Higginbotham/Nasa/Msfc

Racked by violence, Kenya struggles to hold its economic lead
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By GEOFFREY YORK
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Saturday, June 27, 2015 – Print Edition, Page B1


NAIROBI -- Getting into East Africa's biggest shopping mall is no easy matter. Guards block your car, fling open the doors, rummage through the trunk and glove compartment and check beneath your car with a bombdetecting mirror before you are finally granted entry to the parking garage.

Visitors suffer a similar gauntlet at Nairobi's main airport, and its leading business and tourist hotels, ever since a wave of terrorist attacks on "soft targets" across Kenya, including coastal villages, a northern university and the upscale Westgate shopping mall in the capital.

The attacks have devastated Kenya's tourism industry, triggering the loss of an estimated 60,000 jobs in coastal resorts alone.

Yet the retail sector is thriving, despite Westgate and other attacks, showing the resilience that Kenya will need if it hopes to remain among Africa's economic powerhouses.

The Garden City mall, billing itself as the largest in East Africa with 33,000 square metres of shopping, opened its doors in late May and already has shoppers flocking through its doors, even though half of its shops aren't open yet.

Among the biggest advantages of the $250-million (U.S.) mall is its location on an eight-lane highway, one of the many road and railway projects that are fuelling Kenya's economic growth.

"Super Deals on the Super Highway," say the sales tags on discount TV sets at the popular Nakumatt department store in the mall."The growing middle class is driving this," says Justin Melvin, general manager of Kuku Foods, which opened a KFC fastfood outlet in Garden City this month, its seventh in the country so far. "Expectations are higher these days. I think you'll see the top end of retail coming here, too."

Later this year, Garden City will lose its regional leadership to an even bigger mall, Two Rivers, with 62,000 square metres of shops, in an affluent district of Nairobi. The French hypermarket chain Carrefour is planning to open two outlets in Nairobi. And on July 1, the Westgate mall itself is scheduled to reopen, less than two years after the attack by alShabab gunmen that killed 67 people.

While most of its shops won't be ready for business by then, Westgate's reopening will be a rebirth for the trend-setter of Kenya's retail sector. Construction noise is audible behind a tall metal fence at Westgate these days as workers apply the final touches.

"Westgate will attract people - Kenyans have very short memories," Aly-Khan Satchu, a Nairobi investment adviser says. "There's an excitement around the retail sector. I can't tell you the number of big retail brands that have contacted me and asked how they can enter. It's sky-high."

In another sign of Kenya's economic vitality, U.S. President Barack Obama is due to visit Nairobi next month to attend an entrepreneurship summit. Kenya's economic potential is too big for the Americans and other foreign investors to ignore.

In a report this month, the World Bank forecast 6-per-cent growth for Kenya this year, followed by 6.6 per cent next year.

One of the biggest reasons is a $4-billion railway line, now under construction with Chinese financing and contractors, connecting the port of Mombasa to Nairobi and then to the Ugandan border.

Tourism slump

Yet the boom in retail and infrastructure is undermined by bad news in two of Kenya's most crucial sectors: the energy industry, jeopardized by low global oil prices and a delayed pipeline, and the tourism sector, severely damaged by the terrorist attacks and a series of travel warnings by Western governments, including Canada.

The terrorism issue, along with the closely linked issue of Kenya's military intervention in Somalia, has led to an identity crisis here. As the attacks continue, and as a wave of arrests and alleged extra-judicial killings by Kenyan security forces provokes its own grievances, Kenya's tradition of religious and ethnic tolerance is under new pressure.

This, in turn, could spur more violence and political tension, weakening the stability that the country needs for its growth. The security measures at the entrances of hotels and airports are an attempt to reassure foreign tourists, but so far they aren't sufficient to lure them back.

Tourism was already declining last year, but now the decline is gathering speed. Kenya's visitor numbers dropped by 25 per cent in the first five months of this year. British visitors, the biggest contingent of tourists here, have fallen by an even steeper 35 per cent this year.

Mombasa, the historic port and trading city at the heart of Kenya's coastal tourism sector, rarely sees any foreign tourists any more. Two dozen hotels around Mombasa have shut down because of slumping tourism.

Those that remain open have laid off staff or cut salaries to cope with the low occupancy rates.

One of Mombasa's oldest hotels, the 177-room Nyali International, has managed to stay open by catering to a domestic business and conference clientele, but its staff say its occupancy rate is just 20 per cent and it has dismissed half of the 260 staff that it employs at its peak.

Clocks in the lobby give the current time for cities from Tokyo to Zurich, but virtually no foreigners can be seen in the hotel these days. "Tourism is difficult in Mombasa now," a desk clerk says mournfully.

Mombasa is hurt not just by terrorism fears, but also by local factors, including the presence of radical Muslims and supporters of al-Shabab, the Somalia-based extremist militia. A Russian tourist and a German tourist were shot dead last year in the city centre. The killings were never solved, but many observers have blamed Muslim radicals. Travel warnings by foreign embassies have become more alarmist over the past year, scaring away more foreigners.

"Tourism on the coast is dead, completely dead," says Ahmed Shee Ahmed, a tour guide at Fort Jesus, the 420-year-old Portuguese fort in Mombasa's old town. A dozen guides sit idle at the fort, waiting for visitors who never come.

Mr. Ahmed says he hasn't seen any foreign tourists for months.

"The economy of the whole region is flat on the ground," he says. "People like me are suffering a lot."

Sam Ikwaye, head of the coast branch of the Kenya Association of Hotelkeepers and Caterers, is worried that tourism won't recover for several more years. "If something isn't done soon, next year will be lost, too," he said.

"We don't have many other industries on the coast - it's mostly tourism. A multitude of young people don't have incomes now."

Pipeline uncertainty

Coupled with the tourism crisis are new questions about Kenya's nascent oil boom, in which Vancouver-based Africa Oil Corp. is a 50 per cent owner in the main project.

The slump in global prices is making it harder to raise money for oil, and the uncertainty is compounded by a delayed decision on a crucial oil pipeline.

Before the oil can be developed, Kenya and Uganda must agree on the pipeline to a planned export terminal on the coast near Lamu - expected to be the world's longest buried and heated oil pipeline, with 800 kilometres in Kenya alone. Terrorism could pose a threat to the pipeline as it passes close to the Somali border near Lamu. The project, accompanied by a road and rail link, was first mooted nearly 15 years ago, yet its route is still undecided.

"We are hoping there will be a pipeline decision imminently," Africa Oil vice-president of external relations Alex Budden says in an interview in Nairobi.

"Every time we hear something is about to happen, it's 'within the next few days' - and that has happened for the last four months. Something happens, and the decision isn't made.

Pipeline certainty is what's needed to keep our project moving forward."

Africa Oil and its partner, Tullow Oil, have cut their 2015 exploration budget to about $380-million, less than half of last year's budget, and they expect to have only one drilling rig in operation by the middle of this year, compared with six at the peak last year.

Mr. Satchu, the Nairobi-based investment adviser, says the Lamu pipeline and terminal project is unlikely to proceed if the price of oil remains low.

"Until we see a sustained recovery to $80 a barrel, I think all of this is dead in the water," he said.

Associated Graphic

U.S. President Barack Obama is set to visit Nairobi next month to attend an entrepreneurship summit, a sign that Kenya's economic potential is too big for the United States or foreign investors to ignore.

SIMON MAINA/AFP/GETTY IMAGES

THE GLOBE AND MAIL SOURCE: WORLD BANK

ONE-CUP COFFEE'S ETERNAL QUESTION
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By ERIC ATKINS
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Monday, July 6, 2015 – Print Edition, Page B1


Coffee drinkers' love of an easy fix has created a multibillion-dollar market for single-serve coffee cups and the machines that brew them. It has also created a mountain of eternal garbage, and a race to hit the shelves with coffee pods that can be chucked in the compost or recycling bins.

In one year, Toronto residents and businesses wrongly toss 10 million of the cups - 90 tonnes - into recycling bins, according to the City of Toronto.

"These pods [or] discs are not recyclable and are removed as garbage that is landfilled," said Patricia Barrett of the City of Toronto.

"In Edmonton, we ask residents to put coffee discs in the garbage because we cannot recycle them at this point. This is because they are not made of a single material that we can sort and market," said Andrea Soler of the City of Edmonton's waste management department. "They are a plastic cup, with a foil lid and full of wet coffee grounds. Even if residents remove the foil lid and coffee grounds, the plastic cup is too small for our recycling facility to sort."

Almost of half of all Canadian coffee drinkers have one of the coffee brewers on their kitchen counters, and another 20 per cent say they are interested in buying one of the machines known for their convenience, consistency and variety, according to consultancy Mintel Group Ltd.

The machines start at about $100 and generate a discshaped piece of garbage with every cup, which costs at least 60 cents.

This mountain of plastic and foil is creating headaches for the municipalities that have to sort them out of the blue box stream and send them to landfills.

"These types of products are exploding in the market as a delivery vehicle for coffee, tea and other various types of drinks. The Keurig folks unleashed a monster," said Larry Johnson, a food analyst in California.

"What could be easier than taking a small spoonful of coffee and putting it into a container in a traditional coffee maker? Well, pods are easier. They take all the guesswork out of it. And they're faster, and you don't have to make a whole pot of coffee, so there's a fresh cup of coffee every time you need it."

Of the 33 per cent who are not keen on buying one of the machines that brew a cup at a time, the coffee price is the reason most often cited, not the amount of garbage generated.

"So far, I don't see [waste concerns] as a big issue. The convenience element has trumped it," Mr. Johnson said by phone.

The single-serve market is dominated by Nestle, Keurig Green Mountain and Tassimo.

In North America, the market leader is Keurig Green Mountain, a Vermont-based company with a market value of $11.4-billion and sales of almost $5-billion (U.S.).

The company's patent on pods that fit its machines expired in 2012, opening the market to a long list competitors. Last year, Keurig raised pod prices by 10 per cent and defended its market dominance by launching machines that reject unlicensed pods, and do not work with the company's own, refillable pods.

The moves were met by consumer anger and antitrust lawsuits in Canada and the United States. Smaller rivals, including Canada's Club Coffee, soon announced they had cracked the Keurig code and began selling cups that worked with newer Keurig machines. Internet searches quickly turned up ways to trick the machines with scissors and tape into brewing any pod.

After sales of the new machines flopped, the company said it would bring back the reusable cups. "Quite honestly, we were wrong," Keurig CEO Brian Kelley said on a May conference call with analysts. "We underestimated the passion the consumer had for this." Since he made the comments, the company's share price has fallen by 30 per cent.

Mr. Johnson, the analyst, said Keurig's attempt to lock out competitors was a tactic favoured by makers of razors and printers - sell them the machine and they have to buy your refills. But no one goes through three razor blades by lunchtime, and consumers are bound to look for cheaper, and greener, alternatives to the single-serve cups.

"When they see 10, 20, 100 plastic cups in the trash in the office or in someone's home, it's really tough to ignore," said Vancouver entrepreneur Darren Footz, who is spending $10-million (Canadian) developing a compostable and biodegradable cup called the G-Kup, developed in partership with University of British Columbia. He hopes to have a new Vancouver factory churning out the coffee-filled cups by November.

Mr. Footz, 46, founded West Coast coffee maker Granville Island Coffee Co. in 2009. Though he still sits on the board, he is no longer involved in the day-to-day operations of the roaster. He has witnessed a steadily growing pushback against the stream of garbage created by the one-cupat-a-time craze. Offices, the place where single-serve first caught hold, are beginning to dust off the percolators and unplug the single-serve machines to reduce the amount of plastic going to landfills.

"This is the product that is on everybody's radar. We knew that there was going to be a tipping point soon," Mr. Footz said.

"They're going back to non-plastic non-petroleum-based products."

Of the companies trying to market a coffee pod that will break down in municipal compost systems, Toronto's Club Coffee is believed to be closest to ready.

The company expects its PurPod100 coffee cups will be certified compostable within a month by ASTM International, a U.S.based standards association.

Meantime, the company has spent the past several months demonstrating for municipal officials across Canada that the pods made of corn- and coffee-based plastics will completely break down in compost programs.

"There is a real sensitivity of this issue, and I think there's a real pent-up demand," said Claudio Gemmiti, vice-president of innovation at Club Coffee, which roasts and packages coffee in everything from tin cans to bags and pods for large Canadian grocers and coffee chains and several regional U.S. brands. "I think that consumers like the convenience of single serve but I think they want to enjoy that convenience without the guilt of thinking about all this garbage that is being built up."

Club Coffee has spent $30-million building a factory dedicated to making single-serve cups for the Keurig brewing machines. At the heart of its push into the K-Cup market is a pod consumers can chuck into their green bins.

The pods are made of vegetablebased plastics and are compostable - not just biodegradable or recylable, the company says.

"Everything biodegrades eventually," Mr. Gemmiti said. "If I let my car sit outside for long enough, it'll biodegrade. But that's not a very useful process for us to hope for with our coffee pods."

Associated Graphic

Darren Footz is spending $10-million to develop a compostable and biodegradable cup called the G-Kup.

DARRYL DYCK FOR THE GLOBE AND MAIL

Internet fibre races down to the wire
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Telecoms invest billions to meet broadband demand expected to triple by 2019
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By CHRISTINE DOBBY
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Thursday, July 2, 2015 – Print Edition, Page B1


TORONTO -- Jeff Misner understands the challenges of working with sod.

As strategic initiatives project manager at Rogers Communications Inc., he serves as the connection between the virtual world and the real world. He knows the effort, and expense, needed to keep up with pressure for ever-more capacity and higher Internet speeds - and that extends to leaving customers' lawns just as he found them.

Internet traffic in Canada is expected to more than triple between 2014 and 2019, according to data from Cisco. In a race to meet that demand and hold on to broadband customers, the country's big telecom players are pouring billions of dollars into their networks, investing in software and equipment upgrades and incorporating more fibre optic cables into their systems. That's where Mr. Misner comes in.

On a hazy morning in early June he is supervising a construction crew outside an apartment complex in Toronto's east end. His team is prepping a machine to drill down about a metre before boring 60 metres across the building's front lawn, leaving only a small patch of tornup grass as evidence they were there.

Later, the crew will pull two sturdy plastic pipes through the hole, leaving one empty for the future, and running a thick fibre cable in black plastic casing through the other tube and up to the apartment building. From there, individual units will continue to receive service from the company's original coaxial cable that once delivered only television signals before branching into Internet and home telephone service.

"We're seeing growth on our IP network of about 60 per cent year-over-year and we expect that to continue to grow," says Rob Goodman, senior director of product management for Internet at Rogers. "Over the next four years, our estimation is it's about a 400 per cent increase in usage.

It's a dramatic amount of data that our customers are demanding and using."

Several broad trends have expanded Internet traffic over the past 20 years, says Don Bowman, chief technology officer at Waterloo, Ont.-based Internet-service tracking firm Sandvine Inc., outlining the shifts from when customers first signed up for AOL accounts after receiving a CDROM in the mail to now, when many homes have multiple WiFiconnected laptops, TVs, smartphones and even fridges.

"Initially growth was driven by people switching from dial-up to broadband. The second thing that drove growth was new users joining the network," he says, adding that in the early 2000s, new users joining the network increased by about 25 per cent every quarter.

"Starting about three years ago or so, the number of people joining the network slowed down to effectively population growth - about one per cent - because everybody has broadband if they wanted it," Mr. Bowman continues. "Then, the growth switched to new applications on the network as people started streaming video.

Now, everybody's doing streaming ... What's actually growing now is the number of devices inside your house."

Rogers, for example, sees an average of seven connected devices behind each of its cable modems, says Mr. Goodman, adding that 30 per cent of the company's customers have more than 10 connected devices.

To keep pace with demands for more speed and capacity, all Internet providers make numerous business decisions such as interconnecting directly with other Internet companies and using third-party "transit" providers to send traffic long distances over fibre networks .

But at the neighbourhood level - the "last mile" between customers' homes and local facilities, known as a cable "headend" or "central office" in the case of telephone companies - cable and telephone companies are grappling with different technology constraints and opportunities.

Fibre - which transmits data over ultra-thin strands of glass using pulses of light - has much greater bandwidth capacity than the copper wires traditionally used in telephone and cable networks, which rely on electrical currents to send information.

Both types of operators commonly install fibre directly in new housing and condo developments and have invested in wiring more of their networks with fibre and pushing it closer to existing homes. But telcos face a more pressing demand to bring fibre directly to their users' living rooms sooner.

That's because by using newer generations of DOCSIS (data over cable service interface specification) technology, cable operators have been able to deliver increasingly fast broadband Internet speeds surpassing 200 megabits per second (Mbps) over their existing copper wires. Meanwhile, telephone companies can deliver respectable but not eye-popping speeds - in the range of 25 Mbps to 50 Mbps - in areas where they have deployed fibre to the neighbourhood but not right to the home.

To date, telcos have remained competitive by bundling their broadband service with popular Internet protocol television (IPTV) offerings, says Barclays Capital analyst Phillip Huang. But he predicts that advancements in cable firms' own TV platforms will only increase the pressure on telephone operators to deploy fibre-to-the-home.

Within the past two weeks, Telus Corp. and BCE Inc. have both highlighted plans to direct $1-billion of their capital expenditures budgets toward fibre-optic builds in the cities of Edmonton and Toronto, respectively. Telus aims to offer speeds of 1,000 Mbps within six years, while BCE says it will offer such "gigabit" service to 50,000 Torontonians later this summer and eventually deploy it to 1.1 million homes and businesses. (BCE owns 15 per cent of The Globe and Mail.)

BCE says the Toronto project will see it upgrade 27 central office facilities and install more than 9,000 kilometres of new fibre. The company has also reached long-term agreements with Toronto Hydro to access utility poles and will deploy 70 per cent of the network aerially, which saves time and expense compared to underground upgrades.

In a research note Monday, Mr. Huang highlighted the Internetfocused race between cable and telephone operators: "In anticipation of the cable [companies'] improvement to their TV platforms, the telcos appear to have been quietly accelerating fibre investments, with recent announcements/commentary suggesting that they now aim to make broadband their competitive edge over cables in the next several years."

Associated Graphic

A Rogers work crew installs a section of fibre-optic cable in Toronto.

KEVIN VAN PAASSEN FOR THE GLOBE AND MAIL

CANADA'S 21-MILLION-SQUARE-FOOT RETAIL PROBLEM
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By MARINA STRAUSS
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Thursday, June 25, 2015 – Print Edition, Page B1


The departure of discounter Target Corp. and a raft of other retailers from Canada leaves landlords with plenty of space to fill at a time when many merchants are downsizing amid the rise of e-commerce.

In all, an estimated 21 million square feet of retail real estate will be vacant this year - almost three times the amount of new retail development that comes on the market annually, John Crombie, senior vice-president of retail leasing at property manager Triovest Realty Advisors, said on Wednesday.

"There are a lot of vacancies coming down," Mr. Crombie said in an interview after his presentation to a retail seminar sponsored by the International Council of Shopping Centres and Ryerson University. "We've had a good run - we're just in a pause now."

Property owners are racing to find replacements for Target and other retailers that have abandoned their stores in Canada, feeling the heat of a fastchanging market and rising digital sales. Landlords feel the pressure to invest in finding new retail tenants and redesigning their empty space, an effort that can take years and reshape many malls.

Even so, executives at major landlords Ivanhoé Cambridge and Oxford Properties Group - which bought back 11 Target store leases for $138-million - said they see the mass retail exit as an opportunity to replace Target and others with stronger retailers.

"We're much better off in four or five years having brand-new, healthy retail in our shopping centres rather than a Target scenario," said Casdin Parr, a leasing manager at Ivanhoé.

In the meantime, Oxford expects it will take until 2016 or 2017 to fill Target space in most of its properties, said Greg Schmidt, director of retail leasing at Oxford.

Ailing Target Canada, which filed for bankruptcy protection on Jan. 15, closed all of its 113 stores by early April after only about two years in this country, resulting in 16 million square feet of real estate being put up for grabs.

Major rivals subsequently bought 38 of the Target leases - Wal-Mart Canada Corp. (12 leases), Canadian Tire Corp. (12), Lowe's Canada (13) and Rona (1) - while landlords bought back 26 leases, preferring to control the choice of tenants in their malls, Mr. Crombie said.

But many of the Target stores are too big for any one retailer, which will force landlords to divvy up the space among multiple retailers, he said. And retailers "are pushing harder for lower rents" and better deals.

Many of the other store closings have been fashion retailers, such as Mexx, Smart Set and Jones New York, while electronics chain Future Shop and photography specialist Blacks also are shutting stores.

On a brighter note, still other retailers are expanding, including U.S. department-store chain Nordstrom Inc. and Saks Fifth Avenue, owned by Hudson's Bay Co., as well as each of their discount chains, Rack and Off 5th, respectively, Mr. Crombie said.

U.S. cheap-chic chain Forever 21 is launching F21 RED, an even lower-priced fashion chain, while rival H&M of Sweden is bringing a higher-end concept, called COS, to Canada, he noted.

Still, the exit of Target and other retailers is taking a toll.

Retailers are taking longer to negotiate leases with landlords because of the surplus of retail space available, including mall expansions by some of the leading players, Mr. Schmidt said.

"There's a lot of supply on the market," he said. Retailers "have a lot of options - they don't need to move fast."

At the same time, retailers are feeling the squeeze of a weaker Canadian dollar, which is making it more expensive for American and other foreign retailers to do business here, Ivanhoé's Mr.

Parr said. "Deals are getting done - it may just take a little longer than over the past few years."

One of the challenges of replacing Target is that other tenants may not pay as much rent, Mr. Crombie said. Target's rent was generally between $8 to $14 per square foot while socalled "experience retailing" players - such as an indoor surfing operator - bring in only about $2 to $4 per square foot of rent, he said.

Fitness centres will inevitably replace some Target stores but in many cases need only about one-third of the space of a Target outlet, he said.

Mr. Schmidt said when he first found out Target was leaving his reaction was: "Who are we going to lease the space to? But sitting back, it's a huge opportunity for us" because of Oxford's prime locations.

Nevertheless, "a lot of other landlords" will not find it as easy to lease out their Target space, he said.

Matthew Jackson, sales associate at realtor CBRE Ltd., said his initial shock about Target's departure turned into "excitement" about the prospect of finding better retail replacements and then "disappointment" about the "ripple effect" of foreign retailers thinking twice about coming to Canada.

"New retailers we'd been going after for three, four, five years are now saying, 'Let's put Canada on hold for a bit,' " Mr. Jackson said.

Associated Graphic

GLENN LOWSON FOR THE GLOBE AND MAIL

Friday, June 26, 2015 Friday, June 26, 2015 CorrectionA Thursday Report on Business article on retail space incorrectly said Target Canada closed all of its 113 stores. The correct number is 133 stores.

CANADA'S 21-MILLION-SQUARE-FOOT RETAIL PROBLEM
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By MARINA STRAUSS
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Thursday, June 25, 2015 – Print Edition, Page B1


The departure of discounter Target Corp. and a raft of other retailers from Canada leaves landlords with plenty of space to fill at a time when many merchants are downsizing amid the rise of e-commerce.

In all, an estimated 21 million square feet of retail real estate will be vacant this year - almost three times the amount of new retail development that comes on the market annually, John Crombie, senior vice-president of retail leasing at property manager Triovest Realty Advisors, said on Wednesday.

"There are a lot of vacancies coming down," Mr. Crombie said in an interview after his presentation to a retail seminar sponsored by the International Council of Shopping Centres and Ryerson University. "We've had a good run - we're just in a pause now."

Property owners are racing to find replacements for Target and other retailers that have abandoned their stores in Canada, feeling the heat of a fastchanging market and rising digital sales. Landlords feel the pressure to invest in finding new retail tenants and redesigning their empty space, an effort that can take years and reshape many malls.

Even so, executives at major landlords Ivanhoé Cambridge and Oxford Properties Group - which bought back 11 Target store leases for $138-million - said they see the mass retail exit as an opportunity to replace Target and others with stronger retailers.

"We're much better off in four or five years having brand-new, healthy retail in our shopping centres rather than a Target scenario," said Casdin Parr, a leasing manager at Ivanhoé.

In the meantime, Oxford expects it will take until 2016 or 2017 to fill Target space in most of its properties, said Greg Schmidt, director of retail leasing at Oxford.

Ailing Target Canada, which filed for bankruptcy protection on Jan. 15, closed all of its 113 stores by early April after only about two years in this country, resulting in 16 million square feet of real estate being put up for grabs.

Major rivals subsequently bought 38 of the Target leases - Wal-Mart Canada Corp. (12 leases), Canadian Tire Corp. (12), Lowe's Canada (13) and Rona (1) - while landlords bought back 26 leases, preferring to control the choice of tenants in their malls, Mr. Crombie said.

But many of the Target stores are too big for any one retailer, which will force landlords to divvy up the space among multiple retailers, he said. And retailers "are pushing harder for lower rents" and better deals.

Many of the other store closings have been fashion retailers, such as Mexx, Smart Set and Jones New York, while electronics chain Future Shop and photography specialist Blacks also are shutting stores.

On a brighter note, still other retailers are expanding, including U.S. department-store chain Nordstrom Inc. and Saks Fifth Avenue, owned by Hudson's Bay Co., as well as each of their discount chains, Rack and Off 5th, respectively, Mr. Crombie said.

U.S. cheap-chic chain Forever 21 is launching F21 RED, an even lower-priced fashion chain, while rival H&M of Sweden is bringing a higher-end concept, called COS, to Canada, he noted.

Still, the exit of Target and other retailers is taking a toll.

Retailers are taking longer to negotiate leases with landlords because of the surplus of retail space available, including mall expansions by some of the leading players, Mr. Schmidt said.

"There's a lot of supply on the market," he said. Retailers "have a lot of options - they don't need to move fast."

At the same time, retailers are feeling the squeeze of a weaker Canadian dollar, which is making it more expensive for American and other foreign retailers to do business here, Ivanhoé's Mr.

Parr said. "Deals are getting done - it may just take a little longer than over the past few years."

One of the challenges of replacing Target is that other tenants may not pay as much rent, Mr. Crombie said. Target's rent was generally between $8 to $14 per square foot while socalled "experience retailing" players - such as an indoor surfing operator - bring in only about $2 to $4 per square foot of rent, he said.

Fitness centres will inevitably replace some Target stores but in many cases need only about one-third of the space of a Target outlet, he said.

Mr. Schmidt said when he first found out Target was leaving his reaction was: "Who are we going to lease the space to? But sitting back, it's a huge opportunity for us" because of Oxford's prime locations.

Nevertheless, "a lot of other landlords" will not find it as easy to lease out their Target space, he said.

Matthew Jackson, sales associate at realtor CBRE Ltd., said his initial shock about Target's departure turned into "excitement" about the prospect of finding better retail replacements and then "disappointment" about the "ripple effect" of foreign retailers thinking twice about coming to Canada.

"New retailers we'd been going after for three, four, five years are now saying, 'Let's put Canada on hold for a bit,' " Mr. Jackson said.

Associated Graphic

GLENN LOWSON FOR THE GLOBE AND MAIL

Greece nears shutdown amid default
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By ERIC REGULY
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Wednesday, July 1, 2015 – Print Edition, Page B1


ATHENS -- The Greek economy is showing signs of shutting down.

On Tuesday, the day that its current bailout program expired and the cash-strapped government said it would not make a 1.6-billion ($2.2-billion) payment to the International Monetary Fund, businesses were reporting lower sales and making emergency plans to cope with the bank closings and tight restrictions on ATM withdrawals and money transfers.

One senior bank executive in Athens, who did not want to be identified, said the situation was already getting dire and that the economy could be paralyzed as early as next week as the banks remain shut. "You will see bare shelves," he said.

When it announced the bank closings last Sunday, the Greek government said they would reopen after Sunday's national referendum. The referendum will ask voters to accept or reject the creditors' last bailout proposals, which offer fresh bailout loans in exchange for more austerity measures, including tax hikes and pension payment cuts.

While a vote to accept the lenders' terms might encourage the European Central Bank to provide more emergency loans to Greek banks to cover the deposit withdrawals, a No vote, which the government of Prime Minister Alexis Tsipras is encouraging, would do the opposite and almost certainly keep the banks shut and the 60 withdrawal limit in place. On Sunday, the ECB capped its lifeline to the banks - known as emergency liquidity assistance - triggering the bank closings to stem an outflow of funds.

Between Friday and late Monday, another 600-million of deposits was yanked out of the banks by nervous customers, putting the lenders dangerously close to a full-blown funding crisis.

Cash hoarding has quickly replaced spending and businesses everywhere were seeing slumping sales. Athena Aspro Alogo, the Egyptian-born owner of a central Athens restaurant that carries her name, said business has dropped 60 per cent since the weekend. "We're very sad because the people have no money," she said. "The Greek people aren't coming any more."

Nearby, a hotel owner, Takis Kalozaropoulos, said any hotel, restaurant or café that did not cater to foreign tourists, whose ATM cards are not subject to the withdrawal limit, were already struggling. "In the non-tourist areas, you get a problem," he said. "If banks do not open next week - really, really big problem."

Bigger businesses were making plans to deal with a cash-short society. Georges Ghonos, managing director for southeastern Europe, including Greece, for McCain Hellas, the Greek arm of Canada's McCain Foods, said it is screening its 100 or so distributors to make sure they are financially stable.

The distributors are typically paid in cash from the restaurants and supermarkets that buy McCain's frozen French fries. If the distributors do not get their cash, they cannot pay McCain.

"If cash disappears, our sales will drop," he said. "We need to protect our financial exposure."

Greek businesses were praying for a Yes vote on Sunday and some of their bosses and managers planned to attend a pro Yes rally in Athens's Syntagma Square, next to the parliament buildings, on Tuesday evening.

The bank executive who did not want to be identified said the economy could shut down at an alarming speed in the event of a No vote. The restrictions on international transfers would mean that orders placed for goods outside of Greece, from auto parts to fuel, could not be paid for in full, meaning they probably would not be shipped to Greece. "The banks will run out of money and companies will shut their doors," he said.

While a few polls suggest that the Yes vote will emerge on top in the referendum, Mr. Tsipras, Leader of the radical left, antiausterity Syriza party, remains popular in Greece. The Yes side fears that many voters will vote No simply because they like Mr. Tsipras above other politicians, not necessarily because they want to reject the creditors' bailout terms, a move that would dramatically boost the odds of Greece leaving the euro zone.

The results from the Jan. 25 election, which was overwhelmingly carried by Syriza, suggest that a No vote could win. Based on exit polls, Syriza placed first among public-sector employees (38 per cent against 24 per cent for New Democracy, the former governing party, which is now the main opposition and remains staunchly pro-Europe and pro-bailout), private-sector employees (39 per cent to 23 per cent), the self-employed (34 per cent to 29 per cent) and the unemployed (44 per cent to 20 per cent).

Only pensioners voted in greater numbers for New Democracy than Syriza.

On Tuesday evening, the prospect of the banks remaining closed through next week rose, when Germany Chancellor Angela Merkel reportedly said she would not consider a new bailout proposal launched late in the day by the Greek government until after the referendum.

The proposal asked for a twoyear program that would include a sovereign-debt restructuring.

But Greece's creditors - the IMF, the European Union and the ECB - refused to include a debt writeoff in the current bailout and may refuse one in any subsequent bailout.

'This country needs help'
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The head of the Greek unit of McCain Foods has lived through numerous crises - but never anything quite like this
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By ERIC REGULY
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Friday, July 3, 2015 – Print Edition, Page B1


ATHENS -- Georges Ghonos, the managing director of McCain Hellas, the Greek division of Canada's McCain Foods, is a pickpocket's dream.

His black, leather wallet is as thick as a hockey puck. That's because it is stuffed with 1,200 ($1,670) in cash. "The banks are shut and I need to give some cash to my wife so she can get to the island," he says.

The Greek banks have been closed since Monday, the day after the Greek government announced they would not reopen to protect them from a potentially fatal run on deposits.

At the same time, strict limits were imposed on ATM withdrawals - 60 a day - and international money transfers.

As hoarding removed cash from circulation, businesses big and small were losing customers and sales, some of them at an alarming rate. For them, the nightmare scenario is a No vote in Sunday's national referendum, with No signalling a rejection of the last bailout terms offered by Greece's creditors. Rejection would probably trigger a currency and payments crisis. That would force the insolvent government to issue a parallel currency or reprint the old drachma to prevent a quick economic death.

Greece it defaulted on a 1.6billion loan payment to the International Monetary Fund this week.

Mr. Ghonos is 66 - old enough to have lived through more than a few genuine Greek crises. There included the lengthy post-Second World War battles between communist and anti-communist forces, a military coup d'état, a countercoup, brutally suppressed student uprisings, the Cyprus invasion and, recently, the debt crisis that resulted in the twin bailouts of Greece.

Throughout all these horrors, the economy more or less functioned, Mr. Ghonos says. "This is by far the deepest crisis, economically, that I've seen," he says over a coffee at a central Athens hotel that is suddenly losing bookings, as tourists decide they'd happily skip a front-row seat to potential economic collapse. "I've never seen the banks closed before and no one knows whether we will still have the euro."

No Greek business can prevent the euro from disappearing, but they are hoping the referendum will go in favour of accepting the creditors' loans-for-austerity proposal - a Yes vote. In the meantime, they are implementing emergency plans to survive in a cash economy where cash is becoming scarcer by the hour.

McCain Hellas is screening its 100 or so distributors to make sure they are financially stable.

The distributors are typically paid in cash from the mom-and-pop restaurants, fast-food chains and supermarkets that buy McCain's frozen French fries. If the distributors do not get their cash, they in turn cannot pay McCain.

He is worried that some of them will cease being able to function or even go bankrupt if the banks do not reopen soon.

Mr. Ghonos set up McCain Hellas in 1992, when McCain, the world's largest producer of frozen French fries - it owns one-third of the global market - wanted to expand in Southern Europe. At the time, he was the Greek ice cream sales director for consumer-products giant Unilever. "I started McCain Hellas in my home, in the kitchen," he says.

Growth was fast in the fragmented local frozen-foods market, where quality was often low.

McCain charged higher prices for higher-quality fries. In the first year, the company sold 4,000 tonnes of fries. It is now selling 30,000 tonnes a year, worth about 30-million. The fries mostly come by ship from potato-processing plants in France. McCain Hellas has no local production.

McCain has not been aloof to the Greek crisis, which has sent youth unemployment to well above 50 per cent and spread poverty and misery throughout the country. With the lowly potato in mind, it launched a corporate social responsibility program to help hard-pressed farmers in the far north of Greece. "The company thought it should support Greece through these terrible times," Mr. Ghonos says. "This country needs help."

McCain Hellas worked with the agriculture department of Aristotle University, CSR Hellas and the Stavros Niarchos Foundation to design and fund the project. It is giving 25 farmers high-quality potato seeds, infrastructure, pesticides and training so they can grow 1,000 tonnes of potatoes a year and get them to market. The goal is to give them a source of income in a depressed economy.

The project is one of the reasons the Canadian embassy in Greece presented him with a Friends of Canada award this week.

The next project is to prepare for the worst as the Greek economy braces for a referendum of which the result could force it out of the euro zone.

Does he believe that Greece's exit from the euro zone is coming? "I still believe that this will not happen," he says. "I just hope this is the peak of the crisis."

Associated Graphic

McCain Hellas' Georges Ghonos: 'This is by far the deepest crisis, economically, that I've seen.'

ERIC REGULY/THE GLOBE AND MAIL

Grexit threat underlines euro's fragility
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By IAN MCGUGAN
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Tuesday, June 30, 2015 – Print Edition, Page B1


The common currency that was intended to unite Europe's bickering countries and carry them forward to prosperity has had precisely the opposite effect.

Now, as Greece lurches toward an unprecedented exit from the currency club, the euro project looks fragile. Its design flaws are glaring, its shortcomings are obvious.

The threat of "Grexit" demonstrates that a country's entry into the currency zone is not necessarily the irrevocable marriage that the euro's founders envisioned.

If Greece topples out of the currency zone, speculators may start eyeing other heavily indebted countries on Europe's periphery for signs that they too are considering an exit.

"The euro can no longer be regarded as a 'single currency,' " Frances Coppola, a widely followed British commentator on banking, wrote in her Forbes blog.

"It has been revealed for what it really is, a system of hard currency pegs between 19 - or perhaps now 18 - sovereign countries. And a system of hard currency pegs is fragile. The risk that the euro zone will unravel is substantially increased."

At the heart of the issue is the jury-rigged nature of the euro's design.

It has always been more a political crusade, designed to support a united Europe, rather than a carefully thought-out economic program.

Back in 1997, the founding members of the euro zone laid the foundation for a common currency by agreeing to the Stability and Growth Pact, which insisted that every country that wanted to join the bloc had to keep their annual deficits under 3 per cent of gross domestic product and their public debt below 60 per cent of GDP. The strict guidelines were intended to ensure that no member could undermine the common currency with out-of-control spending.

Based upon that understanding, the euro was introduced in two stages, in 1999 and 2002.

But the Stability and Growth Pact was always a joke, even in those early years. Italy and Belgium didn't meet the requirements but were admitted to the currency zone anyway after promising to do better. By 2003, Germany and France had exceeded the deficit limits, too, but invoked a special-circumstances clause to avoid the financial penalties that were supposed to be levied. Greece was widely suspected of faking its numbers but was never forced to improve its official statistics.

The lack of any true enforcement mechanism was just part of the problem with euro zone architecture. Europe has never been what economists call an "optimum currency area."

For one thing, Europe's national economies are wildly disparate, meaning it's next to impossible for the European Central Bank to forge a single interest-rate policy that's appropriate for them all.

In addition, labour mobility is limited, at least by North American standards. A worker in Nova Scotia can easily move to Ontario or Alberta in search of a better job, but different languages, laws and customs make it harder for European workers to perform similar migrations.

As long ago as 1991, economists such as Barry Eichengreen of the University of California were warning that Europe did not fit the classic criteria for an optimum currency area.

The practical problems have only grown since the euro was introduced. So long as each country had its own currency, it could always regain lost competitiveness by devaluing its money. But once locked into the euro, laggard countries could only adjust by slowly, painfully grinding down their wages and costs. That is precisely the ordeal that countries such as Greece, Spain and Portugal are now enduring.

To make matters worse, the euro zone makes little provision for rich countries to channel money to poor ones. While fiscal transfers in Canada and the United States mean better-off provinces and states help out less fortunate ones, that doesn't happen among countries in Europe.

Given the tortuous process of forging an agreement among so many countries, it's unlikely that the euro zone's architecture is going to be revised any time soon. But Prof. Eichengreen, who has been studying the European currency project for decades, argues that those who predict an imminent unravelling of the euro zone are probably mistaken, at least if self-interest prevails.

He says the leaders of other countries will look at the chaos in Greece and think twice about an exit of their own, given the cost of the bank run that would inevitably result. "The authorities would be forced to shutter the financial system," he wrote in a blog post. "Economic activity would grind to a halt."

Of course, that's assuming policy-makers act rationally. Prof. Eichengreen says he has been shocked by the extent of political incompetence on both sides during the current crisis, and vows not to be surprised again. "Never underestimate the ability of politicians to do the wrong thing," he says.

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JOHN SOPINSKI/THE GLOBE AND MAIL SOURCE: EUROPEAN COMMISSION

BIS warns against 'easy' rate cuts
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By BRIAN MILNER
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Monday, June 29, 2015 – Print Edition, Page B1


The Bank for International Settlements has fired a new broadside against "exceptionally easy" monetary policies that it blames for worsening financial distortions, jacking up debt and making it tougher for the global economy to get back on a track of sustainable growth.

"For some time now, policies have proved ineffective in preventing the build-up and collapse of hugely damaging financial imbalances, whether in advanced or in emerging market economies," the BIS says in its annual report, released Sunday.

"These have left long lasting scars in the economic tissue, as they have sapped productivity and misallocated real resources across sectors and over time."

Low rates do not merely reflect the current economic malaise, the BIS argues. They "may in part have contributed to it by fuelling costly financial booms and busts. The result is too much debt, too little growth and excessively low interest rates. In short, low rates beget lower rates."

Rates "have been exceptionally low for an extraordinarily long time, against any benchmark," Claudio Borio, head of the monetary and economic department, told reporters from the bank's headquarters in Basel, Switzerland.

"Moreover, the negative bond yields that have prevailed in some sovereign bond markets are simply unprecedented and have stretched the boundaries of the unthinkable. The recent market gyrations have not fundamentally altered the picture."

The BIS underscores the threat this poses for the global economy.

"Rather than promoting sustainable and balanced global growth, the system risks undermining it," Mr. Borio said in prepared remarks. "It has spread exceptionally easy monetary and financial conditions to countries that did not need them, exacerbating vulnerabilities there."

Surveying policies in several countries, the BIS report observed that central banks in Canada, Norway and Australia responded to weaker resource prices with interest rate cuts from already low levels. That's despite the fact core inflation remained near official targets and falling commodity prices "have not yet dented the financial booms" in the countries.

The central banks' central bank, as the 85-year-old BIS is known, has long worried about the longer term dangers posed by massive monetary stimulus and other extraordinary measures adopted to combat the financial crisis of 2008-09 and still largely in place across a large swath of the world.

In this, the bank resembles nothing so much as a frazzled parent nagging the kids to clean up their mess. And it has met with a similar lack of success.

Critics accuse the BIS watchdogs of espousing views that have little to do with economic or financial realities. The policy-makers actually responsible for navigating a course through treacherous waters have not only not been on the same page. They haven't even been reading the same book.

The latest salvo by the BIS, whose membership consists of 60 central banks and monetary authorities, comes a year after a harsh critique in which it urged policy-makers not to make the mistake of raising rates "too slowly and too late."

At the time, the BIS scolded Canada, Australia, Sweden and other "small advanced economies" for sticking to ultralow rates too long. This prompted a surge in credit growth relative to gross domestic product that far exceeded historic standards, paving the way for widespread pain once the central banks inevitably launch a new tightening cycle.

But in the past year, central banks in Europe, Japan, China, Canada and elsewhere have opted for more easing in response to darkening economic clouds. The U.S. Federal Reserve has taken its foot off the gas pedal but has shown a reluctance to step on the brakes in the face of conflicting economic signals and persistently low inflation.

In its latest report, the BIS notes that the global economy has resumed growing at a level close to the historical average and suggests that lower oil prices should provide an additional boost.

But it adds this warning: "Debt burdens and financial risks are still too high, productivity growth too low and room for manoeuvre in macroeconomic policy too limited."

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THE GLOBE AND MAIL SOURCE: BIS


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