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Chargers uproot to join Rams in Los Angeles
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By BERNIE WILSON
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The Associated Press
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Friday, January 13, 2017 – Print Edition, Page S3


SAN DIEGO -- As angry fans gathered outside to say goodbye to the franchise they've loved for decades, Chargers chairman Dean Spanos announced to his employees that the team is moving to Los Angeles, where it will join the recently relocated Rams to give the country's second-largest media market two NFL teams for the first time since 1994.

Spanos told his employees Thursday morning that the team will relocate for the 2017 season.

The team posted a letter Thursday on its Twitter account, which was rebranded as the Los Angeles Chargers.

"San Diego has been our home for 56 years. It will always be part of our identity, and my family and I have nothing but gratitude and appreciation for the support and passion our fans have shared with us over the years. But today, we turn the page and begin an exciting new era as the Los Angeles Chargers," Spanos said in the letter.

The move had been in the works for years, as a long, bitter saga failed to result in a new stadium to replace aging Qualcomm Stadium. Still, the final blow was hard for some fans to take. While they supported the team itself, many are angry at Spanos for his scorched-earth tactics over the past two years.

The Chargers are leaving behind a loyal fan base that cheered for Dan Fouts, Charlie Joiner and Kellen Winslow during the Air Coryell years in the 1970s and early 1980s; for Junior Seau, Stan Humphries and Natrone Means on the Chargers' only Super Bowl team in 1994; and in recent seasons, Philip Rivers, LaDainian Tomlinson and Antonio Gates.

The Chargers' decision to move comes less than three months after San Diego voters resoundingly rejected team-sponsored Measure C asking for $1.15-billion (U.S.) in increased hotel occupancy taxes to help fund a $1.8-billion downtown stadium and convention centre.

The Chargers privately admitted they believed Measure C wouldn't pass. Spanos had spent 2015 trying to get approval for a stadium in Carson, Calif., near Los Angeles, that the Chargers would share with the rival Oakland Raiders.

That plan was voted down by fellow owners, but the Chargers were then granted the option to move to L.A.

"For more than a decade, the San Diego Chargers have worked diligently toward finding a local stadium solution, which all sides agreed was required," NFL commissioner Roger Goodell said in a statement Thursday, pointing out that the Chargers delayed exercising the option to move to LA that was granted a year ago. "The Chargers worked tirelessly this past year with local officials and community leaders on a ballot initiative that fell short on election day. That work - and the years of effort that preceded it - reflects our strongly held belief we always should do everything we can to keep a franchise in its community. That's why we have a deliberate and thoughtful process for making these decisions.

"Relocation is painful for teams and communities. It is especially painful for fans, and the fans in San Diego have given the Chargers strong and loyal support for more than 50 years, which makes it even more disappointing that we could not solve the stadium issue."

The Chargers will become a tenant in the stadium being built in Inglewood for the Rams. Before then, the Chargers will make their temporary home at the 27,000seat StubHub Center in Carson.

Relations have been strained for years between the Chargers, who've sought a big public subsidy to replace aging Qualcomm Stadium, and city hall, which has been beset by scandals and various economic crises.

San Diego's Mayor Kevin Faulconer formed a task force in 2015 to try to find a stadium solution, but the Chargers didn't like its recommendation and walked away from negotiations with the city and county. Faulconer recently met with Spanos, and helped cobble together a $375-million package from the city, county and San Diego State, which also plays football at Qualcomm Stadium.

Associated Graphic

Disgruntled fans gather around a pile of Chargers memorabilia in front of the team's headquarters on Thursday after the team announced that it will move to Los Angeles.

DENIS POROY/THE ASSOCIATED PRESS

FIFA opens 2026 World Cup to 48 teams
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North America is most likely continent to host the tournament with Europe and Asia blocked from doing so by association rules
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By GRAHAM DUNBAR
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The Associated Press
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Wednesday, January 11, 2017 – Print Edition, Page S4


ZURICH -- FIFA will expand the World Cup to 48 teams, adding 16 extra countries to the 2026 tournament that is likely to be held in North America.

President Gianni Infantino's favoured plan - for 16 three-team groups with the top two advancing to a round of 32 - was unanimously approved Tuesday by the FIFA Council.

It meets Infantino's election pledge of a bigger and more inclusive World Cup going beyond European and South American teams, which have won all 20 titles.

"We have to shape the football World Cup of the 21st century," said Infantino, who also promised funding increases for FIFA's 211 member federations at his election last February.

With 80 matches instead of 64, FIFA forecasts the equivalent of $1-billion (U.S.) extra income at current rates from broadcasting and sponsor deals, plus ticket sales, compared with the $5.5billion of revenue forecast for the 2018 World Cup in Russia.

FIFA projects an increased profit of $640-million despite some extra operating costs and prize money for teams.

FIFA's six continents should find out by May how many extra places they will each get.

"No guarantees have been made," Infantino said. "The only sure thing is that obviously with 48 teams everyone will have a bit more than they have today."

UEFA wants 16 European teams at the tournament, which is highly likely to be played in North America. The CONCACAF region has not hosted the World Cup since the 1994 tournament in the United States.

U.S., Canadian and Mexican soccer leaders have had informal talks about a co-hosting bid.

FIFA members are scheduled to pick the host in May 2020, though there could be little competition in a process Infantino said must be "bulletproof" to meet all integrity rules.

Africa and Asia could be winners in a bigger World Cup with up to nine places each. They had only five and four teams, respectively, at the 2014 World Cup in Brazil.

Still, FIFA said it expects the standard of soccer to drop compared with the 32-team format locked in for the next two World Cups in Russia and Qatar.

The "absolute quality" of play, defined by high-ranked teams facing each other most often, is achieved by 32 teams, FIFA acknowledged in a research document sent to members last month. It made 10,000 tournament simulations to reach that conclusion.

Instead, Infantino wants to create fervour and months of anticipation back home in the 16 extra countries that would qualify, some probably making their World Cup debut. FIFA has pointed to Costa Rica, Wales and Iceland as examples of teams that overachieved at recent tournaments.

FIFA must break with soccer tradition to make its new format work after an original 48-team plan - with an opening playoff round sending 16 "one-anddone" teams home early - was unpopular.

Instead, three-team groups will replace the usual groups of four to create simple progress to a knockout bracket. However, it leaves one team idle for final group games and could risk collusion between the other two teams.

FIFA said it could guard against result-rigging by introducing penalty shootouts after group games that end in draws. Infantino said a decision could wait until 2024 to agree on competition rules.

Despite the 16 extra games, FIFA believes the current maximum of stadiums needed will stay at the 12 used by Brazil and Russia. However, the demand for more training bases and hotels means developed countries would be better equipped to win future hosting contests.

North America is the strong favourite for 2026 because European and Asian countries are blocked by a FIFA rule excluding continents that hosted either of the past two tournaments. Russia will host the World Cup next year and Qatar in 2022.

South America has been focused on a centenary tournament including original 1930 host Uruguay, and African countries are seen as lacking existing capacity and unlikely to fund multi-billion dollar infrastructure spending.

Associated Graphic

Allowing 48 countries to compete fulfills FIFA President Gianni Infantino's pledge of a bigger, more inclusive World Cup.

MICHAEL BUHOLZER/AFP/GETTY IMAGES

If World Cup is bigger and richer, will it be better?
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By GRAHAM DUNBAR
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The Associated Press
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Monday, January 9, 2017 – Print Edition, Page S3


FIFA is set to make the World Cup bigger and richer, even if the price to pay is lower quality soccer.

FIFA president Gianni Infantino hopes his ruling council will agree Tuesday to expand the 2026 World Cup to 48 countries, playing in 16 groups of three teams.

A decision could be delayed if some council members demand to know exactly how many qualifying places each continent will get before agreeing to scrap the 32-team format. It has been successful, popular and profitable since 1998 and is locked in for the next two World Cups in Russia and Qatar.

The prize of 16 extra places, and the biggest increases to Africa and Asia, has "overwhelming" support from FIFA's 211 member federations, Infantino has said.

Their promise of extra funding from Zurich could also be secured by FIFA's forecast 20-percent rise in rights fees paid by broadcasters and sponsors.

"Financially, the 48-team format is the most appealing or successful simply because the sporting element is prevailing and every match is important," Infantino said two weeks ago.

"The decision should not be financially driven, neither in terms of revenue or costs ... but the driver should really be the development of football and boosting football all over the world."

World Cup champion Germany is not in favour. It argued that diluting the number of European and South American teams - which won all 20 titles since 1930 - could "strengthen the imbalance" seen at some tournaments.

"The [German soccer federation] fundamentally believe that the current 32-team format is the best option," its president, Reinhard Grindel, said last week. Germany has no delegate at Tuesday's meeting though Grindel is set to join the FIFA Council in May.

FIFA acknowledged the risk of lower standards in a research document sent to members last month, as first reported by the Associated Press.

The "absolute quality" of soccer, defined by high-ranked teams playing each other most often, is achieved by 32 teams, FIFA said, citing 10,000 tournament simulations made to reach that conclusion.

Still, Infantino promised voters more World Cup places and funding raises before his election last February.

FIFA expects $5.5-billion (U.S.) income tied to the 2018 World Cup in Russia, though 25 of 34 sponsorship slots are unsold. The research document predicted the equivalent of $6.5-billion revenue from a 48-team tournament in

the 16x3 format, which would send two teams from each group to a new Round of 32 knockout bracket.

All 80 matches would play in an exclusive time slot. Currently, 64 World Cup matches have 56 broadcast slots because the eight four-team groups play their last matches simultaneously.

FIFA predicts organizing costs for a 16x3 competition will rise $2-billion to $2.3-billion, giving a potential profit rise of $640-million.

Though a 16x3 World Cup would still need a maximum of 12 stadiums, the demand for 16 more top-quality training camps and hotels suggests FIFA would look for 2026 hosts with existing capacity.

A North American bid from two or three of the United States, Canada and Mexico is currently favoured in a contest that could start within weeks.

Five options are open Tuesday, including staying with 32 teams.

Infantino campaigned last year on a 40-team promise, in either eight groups of five teams or 10 groups of four teams. Neither impressed voters in recent regional meetings of FIFA member federations.

When the FIFA leader first proposed 48 teams, it included an opening playoff round. The 16 winners would join 16 seeded teams in a traditional 32-team group stage.

FIFA members disliked "oneand-done" teams going home before the "real" World Cup kicks off. It would also stretch to a 39day event with more short-notice travel for fans.

Africa and Asia could be the big winners, and FIFA hopes new teams would include Iceland, Wales and Costa Rica - overachieving teams and feel good stories at recent tournaments.

New England advances to AFC title game for sixth year in a row
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By JIMMY GOLEN
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The Associated Press
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Monday, January 16, 2017 – Print Edition, Page S3


FOXBOROUGH, MASS. -- Short nights and short off-seasons.

It's the Patriot way.

New England has advanced to the AFC championship game for a record sixth year in a row and the 11th time in 16 seasons. With one more win, the Patriots (15-2) would play in their seventh Super Bowl since 2001.

But to find out who was still in their way, they had to wait until Sunday's game between the Kansas City Chiefs and Pittsburgh Steelers. That's also something they've grown accustomed to in the Bill Belichick-Tom Brady era.

"It was a long night - or a short night, however you want to look at it," Belichick told reporters on Sunday, about 13 hours after beating the Houston Texans 3416.

"We have people on our staff that work on our next opponent, just like we always do. This one's a little tougher because we're working on two teams instead of one, but they've just worked harder and gotten it done."

Brady completed 18-of-38 passes for 287 yards and two touchdowns in the divisional-round victory over Houston, but he also threw two interceptions - as many as he had all season.

Dion Lewis had three touchdowns - one running, one on a pass reception and a 98-yard kickoff return - but fumbled another return and helped the Texans stay in the game.

So the Patriots don't have to look too far to find things to work on this week.

"There are some things I could do a lot better on, protect the ball. I put my team in jeopardy," said Lewis, who is the first player in the Super Bowl era to score on a run, catch and kickoff. "We have a lot of work to do. We made a lot of mistakes. I'm glad we got a win, but in order to advance next week, we've got to play a lot better."

Brady was also focusing on improving.

"I think we've just got to learn from it," he said. "It was a lot of things, and then when you add our poor execution on top of that, then you add our turnovers on top of that, it doesn't feel great because we worked pretty hard to play a lot better than we played.

"I give them a lot of credit, but we're going to have to play better on offence. We expect to go out and have a good week and try to fix the things that we saw tonight, and then try to play better next weekend."

Brady, 39, overcame his fourgame Deflategate suspension to propel himself into the most-valuable-player discussion while throwing for 28 touchdowns in the regular season and just two interceptions - the best ratio in NFL history. He has not missed the playoffs in a healthy season since 2002, and his 11 appearances in the conference title game is a record for any player.

Saturday's win gave Belichick the record for coaching appearances in a conference championship, his 11th, breaking a tie with Dallas's Tom Landry.

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The Patriots' Dion Lewis, front, had three touchdowns in Saturday's win over the Texans, but he also fumbled a return.

JIM ROGASH/GETTY IMAGES

Impact sign Kronberg, promote goalkeeping coach
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By BILL BEACON
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The Canadian Press
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Tuesday, January 10, 2017 – Print Edition, Page S4


MONTREAL -- Eric Kronberg is not quite done as a goalkeeper, but the 33-yearold will begin the transition into coaching this season with the Montreal Impact.

Kronberg, who has backed up starting goalkeeper Evan Bush the past two seasons, signed a one-year contract Monday that will see him drop down to third on the club's depth chart behind Bush and Maxime Crépeau, while also helping out Mauro Biello's coaching staff.

"Max has done a great job," Kronberg said in a telephone interview. "He's ready, and I don't really want to be No. 2 any more."

Kronberg would have loved to keep playing if he could land a job in Major League Soccer as a starter.

But since that wasn't likely to happen, Kronberg preferred to get started on his long-term goal to become a coach.

"I'm excited about it," he said.

"I'm beginning my transition.

"I want to continue to play, but I also want to help the team in other ways."

In his new duties, he will train with the team and then coach the young players left behind when the Impact go on the road in all positions, not just goalies. He is unlikely to see any game action unless Bush or Crépeau suffer an injury.

Kronberg appeared in only five regular season games and six Amway Canadian Championship matches for Montreal over the past two seasons. He previously played eight seasons for Sporting Kansas City.

"Eric has settled in nicely over the last two years and expressed his desire to remain with the club," technical director Adam Braz said in a statement. "He's an experienced goalkeeper and a respected player in the lockerroom.

"He will push our first two goalkeepers, Evan and Maxime, to excel throughout the next season."

The change was unrelated to the Impact's decision to promote Jack Stern to first team goalkeeping coach, replacing Youssef Dahha.

Stern, 29, worked the past two seasons with goalies on the club's defunct USL team FC Montreal and also worked with its youth squads. The London native was goalkeeping coach in the academy of English Premier League club West Bromwich Albion from 2009 to 2014, starting as an intern at 21 before earning the full-time job in 2012.

"After analyzing the season as a whole, we decided to take a different direction regarding our goalkeepers," Biello said. "Jack brings a new perspective and tremendous experience to the team, both with the academy and abroad."

"I am extremely honoured, proud and excited to start in my new role with the first team," Stern said. "I have been with the club for three years now and in that time I have developed a great love for this city, this club, the fans and everyone involved in the organization."

The Impact also confirmed that the rest of Biello's staff will be back this season. Assistant coaches Jason DiTullio and Wilfried Nancy, fitness coach Yanick Girard, mental strength coach Antoine Guldner and video and data analyst Massimo Di Ioia will all return for the 2017 campaign.

They hope to find a new role for Dahha in the organization.

Miami's Bosh weighs retirement
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By TIM REYNOLDS
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The Associated Press
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Friday, January 6, 2017 – Print Edition, Page S3


Chris Bosh still is unclear about what his future holds, and while mentioning how he's getting a "taste of retirement" stopped short of saying he will no longer pursue an NBA career.

Bosh has been sidelined since last February because of complications related to blood clots.

He's still technically a member of the Miami Heat, though has not been around the team in any official capacity since he failed a physical in September and was not permitted to resume on-court activities.

Bosh, speaking at the Consumer Electronics Show in Las Vegas, was asked how he's spent time away from the court.

"For me, I kind of just follow my passions and follow what I love to do and use my free time to kind of answer those questions and go through my bad moods and maybe a little light case of depression," Bosh said.

"Really, to search for what I'm looking for. And I've come to some interesting conclusions. It's all about following my heart and what [makes] me happy."

Bosh did not specifically mention whether he will or will not try to play again, nor did he mention his health status. It's expected that the Heat will waive him sometime after February, after the one-year anniversary of his last game appearance passes. The $76-million (U.S.) that Bosh is owed for this and the next two seasons remains guaranteed, but he would no longer be taking up a massive amount of Miami's salary-cap space.

Bosh was speaking on a panel alongside St. Louis Cardinals outfielder Dexter Fowler and Golden State Warriors guard Draymond Green. The panel, titled "Life Off The Court," was moderated by Maverick Carter, the chief executive officer of SpringHill Entertainment and the business partner of Bosh's former Miami teammate LeBron James.

Bosh said he went to the CES event to meet with people and leverage some business relationships.

"I don't know what's going to come out of it," Bosh said. "But we're here."

Bosh had his 2014-15 and 201516 seasons cut short at the allstar break after the discovery of blood clots. He missed the last 30 games of the 2014-15 season because of the first known occurrence of the clot issue, and the last 43 games - including playoffs - last season after a second separate situation.

Bosh said "there's still a lot of things" that he has to figure out.

"I'm still learning more about myself and my situation, and really off the court how to function there because I'm kind of getting the taste of retirement now," Bosh said. "Just trying to navigate those waters because it gets a little complicated sometimes. ... Hoping one day that the stars align and I figure some things out and things kind of just go my way and I'll be able to do what I want to do. I don't know what that is yet."

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Chris Bosh of the Miami Heat attends the Nickelodeon Kids' Choice Sports Awards 2016 last July in Westwood, Calif.

MIKE WINDLE/GETTY IMAGES

McCoy and Co. burn the Jags
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By JOHN WAWROW
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The Associated Press
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Monday, November 28, 2016 – Print Edition, Page S4


ORCHARD PARK, N.Y. -- LeSean McCoy scored twice, including a career-best 75-yard run and the Buffalo Bills won their second in a row by beating the Jacksonville Jaguars 28-21 on Sunday.

Tyrod Taylor's 16-yard touchdown pass to Justin Hunter with 10:46 remaining put the Bills ahead for good during a second half in which the teams traded the lead five times. Taylor also scored on a seven-yard run in helping to keep Buffalo in the playoff hunt.

The Bills (6-5) won for the second straight week when trailing at halftime after doing so just once last season.

Buffalo trailed the Jaguars 7-6 after two quarters on Sunday, and overcame a two-point deficit in a 16-12 win at Cincinnati last week.

Taylor also produced just the second fourth-quarter comeback of his career and improved to 2-11 when the Bills trail by four or more at any point in a game.

The Jaguars (2-9) lost for the sixth straight game - their longest skid since opening the 2014 season at 0-6.

The game was decided with four minutes left, when the Jaguars were unable to convert a fourth-and-nine at the Buffalo 46.

Blake Bortles hit Marquise Lee on a crossing pattern over the middle, but he was limited to a fouryard gain.

The Bills then took over and ran out the clock.

Bortles went 13-of-26 for 126 yards and two touchdowns and also had a career-best 81 yards rushing.

The Jaguars' offence was hampered by injuries. Chris Ivory, who opened the scoring with a two-yard run, was sidelined in the first half by a hamstring injury. And then Jacksonville lost receiver Allen Hurns, also with a hamstring injury while diving into the end zone on a 12-yard catch and run.

Hurns's touchdown put the Jaguars up 21-20 in the opening seconds of the fourth quarter.

The Bills responded with Taylor leading an eight-play, 76-yard drive which he capped with a perfectly placed pass to Hunter at the goal line.

McCoy then dived across the goal line for the two-point conversion.

McCoy finished with 103 yards rushing and showed few signs of being bothered a week after having surgery for a dislocated left thumb.

His two touchdowns came 33 seconds apart spanning halftime.

After scoring on a seven-yard run late in the second quarter, he opened the third quarter by scoring on Buffalo's first snap from scrimmage.

Taking the handoff, McCoy burst off right tackle and blew past defensive backs Jalen Ramsey and Tashuan Gipson.

The Jaguars snapped the NFL's longest active drought by scoring on their opening possession for the first time in 25 games.

The streak began in Week 3 of the 2015 season and featured the Jaguars combining for three field goals, punting 18 times and turning the ball over three times.

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Bills receiver Justin Hunter lays out for a touchdown catch against Jacksonville at New Era Field on Sunday.

TOM SZCZERBOWSKI/GETTY IMAGES

Stage set for Djokovic, Murray final showcase
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By SANDRA HARWITT
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The Associated Press
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Saturday, January 7, 2017 – Print Edition, Page S2


DOHA, QATAR -- Defending champion Novak Djokovic survived five match points to beat Fernando Verdasco and set up a final against top-ranked Andy Murray, who had far less trouble winning his semi-final as he recorded a seventh straight victory against Tomas Berdych.

On another day of chilly and windy weather Friday, Djokovic prevailed 4-6, 7-6 (7), 6-3 after the 42nd-ranked Verdasco, a crafty left-hander and former top-10 player, controlled the first two sets until the latter stages of the tiebreaker.

Murray had no such trouble as he advanced 6-3, 6-4 against the third-seeded Czech. Murray's winning streak is now at 28 matches and the British player had 10 aces and 22 winners in a convincing performance.

"It's a great match against Novak to look forward to," Murray said on court. "This has been the perfect week to get ready for the Australian Open."

Murray has beaten Djokovic in two of their last three meetings - including in the final of last year's season-ending ATP Finals - but the Serb holds a dominant 24-11 career record against Murray.

"We have always very physical battles, long rallies, entertaining matches," said the secondranked Djokovic, who beat Murray in last year's French Open final. "Between one and two in the world, it's a perfect matchup."

But Djokovic acknowledged that Verdasco could rightly have been the one facing Murray on Saturday. Of the five match points Verdasco held from 6-2 in the second-set tiebreaker, four evaporated on the Spaniard's own mistakes.

"I would like to say tough luck for Fernando, he was clearly the better player for the bigger part of the match and he should have won," Djokovic said on court. "I don't think I've saved five match points too many times."

The second-seeded Djokovic, who didn't lose a set en route to the semi-final, broke Verdasco's serve in the third game of the third set to finally take control. Djokovic, who only had one unforced error in the final set, sealed the match by breaking Verdasco's serve.

"It's tough to lose against someone so important like Novak having the match so close," Verdasco said. "It's hard to lose after how well I played and how close I was."

Verdasco initially trailed 4-2 in the first set, but then broke Djokovic at love in the seventh and ninth games to take the set.

Verdasco last played Djokovic in the second round of last year's Qatar Open, where his loss was his 11th consecutive against a world No. 1 player.

Djokovic leads their head-tohead 9-4.

Murray, meanwhile, is the only player to reach four finals in the 25-year history of the Qatar Open - losing the 2007 final and winning the next two years.

SOME OF THE BENEFITS AND PITFALLS OF A 48-TEAM FIFA WORLD CUP IN 2026
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The Associated Press
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Thursday, January 12, 2017 – Print Edition, Page S2


Pros 6 With 16 more teams joining the World Cup party, feel-good stories should keep flowing in soccer. Just look at Costa Rica's run to the 2014 World Cup quarterfinals and Wales reaching the European Championship semifinals in 2016. FIFA President Gianni Infantino believes this generates "football fever" far beyond the host nation(s).

With 16 additional games, there's more soccer for fans to watch in stadiums and on television, generating additional cash for FIFA. For broadcasters, there are 24 extra broadcast slots, not just 16, because there will no longer be final rounds of group games kicking off simultaneously.

FIFA estimates its commercial income will climb 20 per cent, and raise profits by $640-million (all figures U.S.) compared with the equivalent rates for the $5.5billion 2018 World Cup. This would help guarantee the $5-million grants from each World Cup for each of the 211 FIFA member federations, and create extra for development projects.

The 80 games can be squeezed into 32 days, the current length of the 32-team World Cup, according to FIFA. The individual players' workload won't increase as the four semi-final teams will still play a maximum of seven matches.

Cons 6 There will be no rest day for players or fans until the quarterfinals. And there's a gruelling rate of four games a day - up from the current three - for each of the first 16 days, including a new round of 32.

There could be fewer top quality matches. FIFA acknowledged that higher-ranked teams will meet less often in the 48-game group stage, leading to a tournament of lower "absolute quality" than the popular 32-team format used since 1998.

A group stage allowing too many teams to advance reduces the drama. The 16 three-team groups would be tenser if only the group winner advances. Two will go through, creating a new round of 32 where the excitement should increase.

With more teams making it to the World Cup, qualifying could be devalued, particularly in the Americas. There will be less uncertainty about whether the big teams in CONMEBOL and CONCACAF could miss out on the World Cup, so matches will be less captivating for fans considering watching qualifiers on television or in stadiums.

FIFA expects World Cup profits to rise $640-million, but European clubs will want a bigger share of the increased revenue.

Currently $209-million from each tournament is distributed under a European Club Association deal with FIFA.

Early goals lift Leafs
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By VIN A. CHERWOO
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The Associated Press
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Saturday, January 14, 2017 – Print Edition, Page S4


NEW YORK -- Connor Brown and William Nylander scored in the first period, Frederik Andersen stopped 34 shots and the Toronto Maple Leafs beat the New York Rangers 4-2 on Friday night.

James van Riemsdyk and Connor Carrick also scored to help the Maple Leafs win for the seventh time in nine games (7-1-1).

Toronto moved four points behind Philadelphia for the second wild card in the Eastern Conference. Tyler Bozak and Mitch Marner had two assists each.

Chris Kreider and J.T. Miller scored for the Rangers, and Henrik Lundqvist finished with 23 saves.

Toronto, which came in sixth in the league on the power play at 22 per cent, was 2 for 4 and held the Rangers to 0 for 6. Both teams were playing for the first time since last Saturday. The Rangers were coming off a 5-4 win at Columbus, and the Maple Leafs lost 5-3 at home to Montreal.

Trailing 3-1 after two periods, the Rangers pressed in the third, outshooting the Maple Leafs 14-7.

The Leafs are in Ottawa on Saturday night to face the Senators.

Oil producers plan spending hikes as hope returns to patch
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By JEFFREY JONES
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Friday, January 6, 2017 – Print Edition, Page B1


CALGARY -- Optimism is creeping into the oil patch.

Rising oil and gas prices and a big drop in costs are prompting energy companies to top up capital spending and tempt investors with higher production levels after two years of malaise in the sector.

Penn West Petroleum Ltd. said on Thursday it plans to spend $180-million on operations this year, up from its previous estimate of $150-million, with the largest chunk earmarked for its Alberta Cardium operations.

Average output is projected to rise 16 per cent from the fourth quarter of 2016.

The company, which slimmed down drastically in 2016 with a $975-million sale of assets, said its restructuring was completed just as energy markets began their recovery.

Before the disposition, it had struggled under the weight of high debt and declining cash flow.

"Times are exciting," chief executive officer David French told analysts.

"[The year] 2017 marks a significant turning point as we emerge from a complicated 2016 with a streamlined asset base, healthy financial position and a notable transition to a growth trajectory."

Penn West shares climbed 3 per cent after the budget announcement. They've tripled since May.

The company was joined by a number of other firms offering positive prospects, including Kelt Exploration Ltd. and Crew Energy Inc. Larger players Canadian Natural Resources Ltd. and Cenovus Energy Inc. announced late last year the restart of oil sands developments they had halted as crude prices collapsed and the industry struggled to cut costs.

The more upbeat moves come amid the recent rise in oil prices, partly a result of the agreement by the Organization of Petroleum Exporting Countries and a handful of allies to cut production by 1.8 million barrels a day. West Texas intermediate crude has climbed 20 per cent since August, settling up 50 cents (U.S.) at $53.76 a barrel on Thursday.

Natural gas prices have also strengthened on cold temperatures and longer-term expectations of rising demand for exports from the United States.

Gas futures settled at $3.27 per million British thermal units, up 13 per cent since the start of November.

Rising commodity prices are only one factor behind what looks to be a resurgence in the sector, however.

"Budgets seem to be going up, well results seem to be getting better. There are a lot of good things going on in the Canadian energy patch to be optimistic about," said Jeremy McCrea, analyst at Raymond James. "I'm a lot more optimistic at the start of this year than I have been in a lot of other years."

Indeed, improving technology in drilling and hydraulic fracturing is paying dividends as companies develop plays such as the Montney natural gas deposit that straddles the Alberta-British Columbia boundary, he said.

"They are doing higher-intensity fracs for quite a bit cheaper than what they've historically been able to do. It's just giving them higher productivity."

Late Wednesday, Kelt said it agreed to sell some of its Alberta assets for $100-million (Canadian) in a deal that allows it to boost its capital expenditures by $10-million, to $145-million. Much of the money will be used to develop the company's Montney properties in British Columbia and boost overall output 25 per cent by the end of 2017.

With the asset sale, the company will have no trouble living within its means, and may boost capital spending plans again in the spring, even if commodity prices flatten out, GMP FirstEnergy analyst Stacey McDonald wrote in a note to clients. Kelt shares jumped more than 6 per cent Thursday.

Crew, meanwhile, said it plans to spend $200-million this year, a larger sum than analysts had projected, with the lion's share directed at Montney drilling.

Average production is forecast at up to 27,000 barrels of oil equivalent a day, 15-per-cent higher than in 2016. The company is looking to sell its heavy-oil assets in the Lloydminster area.

Another indication of optimism is potential initial public offerings in energy after a more than two-year halt, with private companies such as Velvet Energy, Canbriam Energy Inc. and Teine Energy Ltd. said to be considering going public. This follows some recent U.S. IPOs.

"Private equity wants to start pushing them out to the public market. I think that's certainly a good sign that investor appetite is improving," said Laura Lau, portfolio manager at Brompton Group.

Penn West (PWT) Close: $2.53, up 9¢ Kelt (KEL) Close: $7.29, up 41¢ Crew (CR) Close: $7.21, down 19¢

Canadians should be profiting from our best stories
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By BARRIE MCKENNA
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Monday, January 16, 2017 – Print Edition, Page B1


The story of Bre-X - the biggest mining scam in Canadian history - is finally coming to the big screen.

Sadly, there isn't much that's Canadian about the movie Gold, which stars American actor Matthew McConaughey. The film was written, directed and largely financed by U.S. companies, and shot in the United States and Thailand. Its international cast has just one Canadian, Quebecborn Bruce Greenwood, in a relatively minor role. Investors lost $6-billion in the sensational fraud that rocked Bay Street in the 1990s. It's a tale of international intrigue, shady stock promoters, faked drilling results from a remote jungle gold mine and a geologist's untimely plunge from a helicopter. So why aren't Canadians telling the story of one the best real-life dramas to come out of this country in decades?

Movies, and particularly TV shows, are enjoying a renaissance in the age of videostreaming services such as Netflix and Apple iTunes.

And yet, the wave is largely bypassing Canada, which continues to export talent (and stories), but a paltry amount of its own cultural product.

Enter the idea of a Netflix tax.

Various groups - representing Canadian actors, directors and producers - want Ottawa to tax foreign-based streaming services to help pay for more Canadian content.

The federal government appears to be open to the idea.

The Globe and Mail's Bill Curry reported last week that Ottawa has been testing the public mood about a Netflix tax in recent focus-group sessions - specifically, how to support Canadian content when fewer Canadians are purchasing cable-TV subscriptions. The government tested various options to raise money for Canadian content, including tapping telecom companies' smartphone and Internet revenues, mandating that foreign streaming services spend more on Canadian content or giving consumers the option of making a voluntary $2 contribution on their telecom or Netflix bill.

A Netflix tax might well be a worthy idea. New Zealand, as well as various U.S. states and municipalities, are already going that route - in part to recoup tax revenue they've lost from tumbling sales of CDs, DVDs and cable services.

There is the issue of tax fairness. Canadian cable companies and Internet providers must collect the HST, while foreign services such as Netflix and Apple do not. Even Canadian Radiotelevision and Telecommunications Commission chairman Jean-Pierre Blais has expressed surprise that Ottawa hasn't already moved to level the playing field.

But it's not at all clear that higher taxes will deliver better Canadian movies and TV shows in the digital age.

Ottawa and the provinces already spend more than $1-billion a year on TV and film production, through tax credits as well as Telefilm Canada, the Canada Media Fund and the National Film Board. Many provinces also offer credits and subsidies. Ottawa also gives more than $1-billion a year to the CBC, which is seeking $318-million a year more so it can go ad-free.

In spite of this significant investment, Canadians are not watching enough homemade content. The market share of English-language Canadian films at the box office has consistently been less than 2 per cent in recent years, or well below the 5-per-cent federal target.

Nor are we particularly successful in the export market. For example, Britain exports six times as much cultural product per capita as Canada does, Richard Stursberg, a former CBC and Telefilm executive and industry lobbyist, pointed out in a recent University of Ottawa report, Cultural Policy for the Digital Age.

"The system has worked well, up to a point," Mr. Stursberg argued in the report.

Government cash has helped spawn a significant industry that produces a lot of content.

Unfortunately, most Canadians aren't watching it, he laments.

Subsidies and tax breaks are producing quantity, but apparently not the quality Canadians want.

Mr. Stursberg would abolish the various federal grants, loans and spending mandates for broadcasters and impose the HST on foreign-streaming services. He would then steer most of the money almost exclusively into tax breaks for the industry.

Canada's record on targeted tax incentives to encourage particular corporate behaviour is uneven, at best. Tax credits for research-and-development are a case in point.

The risk would be that the country produces even less quality programming than it does now.

What Canada needs is a regime that fosters larger, wellcapitalized companies capable of producing globally competitive and compelling Canadian viewing.

Surely, Canadians, not foreigners, should be reaping the profits from the telling of our best stories.

Trailer-fee ban will drop mutual fund costs, report says
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By JANET MCFARLAND
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Wednesday, January 11, 2017 – Print Edition, Page B1


New mutual fund companies with lower-cost products are expected to come to Canada if regulators move ahead with proposals to ban trailer fees in Canada, according to a new report from provincial securities regulators.

The Canadian Securities Administrators, an umbrella group for provincial securities commissions, released a long-promised report Tuesday on mutual fund fee reform, outlining a host of potentially positive impacts that could emerge if regulators proceed with proposals to ban the use of all embedded commissions, including trailer fees paid by fund companies to financial advisers who recommend their products. The report predicts new mutual fund players will emerge in Canada offering lower-cost mutual funds, including both actively managed funds and passive funds tracking indexes. Based on experiences in other countries, the CSA estimates management-expense ratios (MERs) for index funds offered by new market entrants could be up to 40 basis points lower than average index fund costs today, while MERs for new actively managed funds could be up to 75 basis points lower. (One percentage point is 100 basis points.)

The report also predicts existing mutual funds would lower their costs because of increased price competition that would emerge in an environment in which financial advisers will be focused on picking the best-performing funds for clients rather than those paying the highest commissions to advisers.

It estimates that shortly after a ban, the average MER for an actively managed equity fund could decline by 25 to 50 basis points, while fees for an actively managed fixed-income fund could fall by 10 to 25 basis points.

The rosy picture painted by regulators in the new report stands in contrast to gloomy predictions offered by industry representatives, who have opposed banning commissions. They argue a ban will raise costs for investors who will have to pay directly for advice, and will force disruption on the industry with no evidence clients will be better off.

Regulators have not yet committed to a ban, but are clearly moving closer to taking the step, asking for public and industry input on their latest report by June 9. The report strongly advocates for the merits of an outright ban and details a host of concerns with the use of trailer fees and similar commissions, arguing they create a conflict of interest for financial advisers.

Although regulators launched their review of embedded commissions in 2012 and have already consulted broadly on the issue, Ontario Securities Commission chair Maureen Jensen said Tuesday's report is a final consultation asking more specifically for comment on the practical issues in moving forward with a ban.

If regulators proceed, the next step would be a proposed new rule, which Ms. Jensen hopes would be out for comment within a year.

She said she agrees with the report's conclusions that a ban on embedded commissions should drive MERs lower in Canada.

"Our fees are the highest in the world," she said. "There are a lot of funds like Vanguard and others that have passive investment funds with MERs that are quite low, but they just don't get traction because they don't pay trailers or embedded fees. So there's no incentive to sell them, even if they would be appropriate and suitable for the client's portfolio."

The report predicts investors would pull out of many existing mutual funds that are below-average performers if a commission ban led advisers to recommend funds based solely on their performance.

It predicts 44 per cent of actively managed mutual fund assets in Canada "may experience redemption and reallocation pressure" over time if they were not able to adjust their fees or improve their performance.

The Portfolio Management Association of Canada, which represents companies that manage large portfolios funds on behalf of clients such as pension plans or foundations, was quick to support the report's findings Tuesday, saying investors are best served when there is up-front transparency about the fees they are paying.

The Investment Funds Institute of Canada, which is the voice of Canada's mutual fund industry, had no immediate comment on the report. IFIC issued a statement last week saying there is no justification for banning embedded fees and arguing harmful conflicts of interest are already prohibited under existing rules.

Family business: Do governance scores paint the full picture?
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By ANDREW WILLIS
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Monday, November 28, 2016 – Print Edition, Page B1


When The Globe and Mail first began scoring governance in Corporate Canada 15 years ago, some of the country's most respected business families freaked out.

Ted Rogers, late founder of Rogers Communications Inc., argued wife and fellow board member Loretta was as independent a thinker as you will ever meet, so the company should not lose points by having Mrs. Rogers counted as a related party director.

Power Corp. of Canada's lawyer took issue with the ranking of the Desmarais clan's conglomerate. There were approximately 40 large familycontrolled companies in the TSX benchmark, and they made their voices heard.

Over time, the outrage faded.

Governance grades became part of corporate coverage, alongside a long list of tools that use both analytics and opinion to predict a company's prospects, measures that range from analyst recommendations to credit ratings and lists of the best places to work.

Where early surveys found family-controlled companies fell short of best practices in the boardroom, most companies evolved, to their credit.

The same improvement in governance played out at dual-class share companies, which make up approximately 15 per cent of the S&P/TSX index and also lag single-class peers in board rankings.

While heads may no longer be spinning, the methodology of the ratings remains largely the same. Family-owned companies tend to lose marks in governance surveys over issues such as the composition of their board, and end up ranking behind companies with no controlling shareholder.

Which begs the question: How much weight should investors put in governance scores?

Are Manulife Financial Corp. and Sun Life Financial Inc., top insurers on The Globe and Mail's rankings, better stocks to own than Great-West Lifeco Inc., which trails its rivals on governance scores due in part of the fact it is controlled by Power Corp.? Is family-controlled Bombardier Inc. in a tailspin due to poor governance, or the fact that it's years behind schedule and billions over budget on an unproven aircraft?

There's no simple answer. Family-owned companies point to academic evidence that shows a controlling shareholder is positive for performance. A recent study by the University of Toronto's Rotman School of Management found that over a 15-year period, Canadian publicly listed family firms significantly outperformed the rest of the S&P/TSX index, to the tune of an additional 25-per-cent total return to shareholders.

But the same academic work found that thorny governance issues such as compensation get even more difficult when a family is involved. Rotman's Clarkson Centre for Board Effectiveness is working on a report that sweeps in "the unique challenge of compensating a CEO who is a member of the controlling family."

The next instalment of the Rotman study should make for interesting reading. Talk to boardroom veterans, and they'll quietly observe that the biggest shift in governance at familycontrolled companies over the years is a steady move to experienced, outside management, rather than a chief executive officer who inherited the job as a member of the lucky sperm club.

So what should investors do with results of governance rankings? Recognize that top scores on governance do signal that the right systems are in place for shareholders, but don't consistently translate into a stock that outperforms.

Understand that issues such as family control or a dual-share structure will weigh heavily on where a company ranks against peers.

Scoring boards puts a spotlight on the governance process, opening boardroom doors that were historically closed to shareholders.

These surveys shows which boards have adopted best practices, and which are lagging.

They highlight companies that, for one reason or another, are run differently from peers.

In simple terms, the role of the board is to find the right CEO, ensure that individual and the rest of the management team execute well, and try to stop potentially fatal mistakes.

These rankings help outsiders understand which boards are best positioned to do that job.

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Laurent Beaudoin, left, then-chair of the board of Bombardier, arrives at the company's annual meeting in Montreal in 2014 with his son Pierre, then-president and CEO and now current chairman.

PAUL CHIASSON/THE CANADIAN PRESS

A Canadian firm's strategy for deals finds new roadblocks
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By ANDREW WILLIS
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Monday, January 9, 2017 – Print Edition, Page B1


Over two decades, Constellation Software Inc. used a steady diet of acquisitions to become one of Canada's largest tech companies, gobbling up more than 250 smaller rivals to build a $12-billion business.

In recent months, Constellation's growth-by-deals strategy has stopped working. Activist investors and private-equity funds have become increasingly aggressive players in a sector the Toronto-based company used to dominate, and are outbidding Constellation on takeover targets.

The company is adapting - it is venturing into the Japanese software market through a joint venture struck at the end of December. But for investors, the thrill is gone: After years of strong performance, Constellation's stock is losing the premium valuation it once enjoyed as a go-go growth play; having gone from $37 to $600 since 2010, it has stalled in recent months.

It's the latest example of the limits faced by a company focused on expanding through acquisition. (A more dramatic, and ugly, case study in how these roll-up growth strategies lose steam comes from Valeant Pharmaceuticals International Inc.)

Constellation's most recent attempt to snap up a promising tech company on the cheap shows how activist investors and PE funds have changed the dynamics of the market. Back in August, hedge fund Crescendo Partners forced telecom services company Redknee Solutions Inc. to put itself up for sale.

Crescendo, based in New York, is known for stirring the pot at underperforming Canadian companies such as Forzani Group Ltd., Spar Aerospace Corp. and Geac Computer Corp.

Redknee, which makes its home in Mississauga, went public in 2007 and is one of many smallcap tech companies that are long on potential but struggling to make the major leagues.

Constellation emerged as Redknee's white knight in early December, striking a friendly deal to invest $80-million (U.S.). This was business as usual: Constellation pounced on a vulnerable small rival, and no one expected another bidder to challenge Canada's tech king of consolidation.

Except this time, a rival did step up. Private-equity fund ESW Capital, a long-time Redknee shareholder, offered to inject $83million, and Redknee's board and their advisers at TD Securities decided this was the better option. ESW Capital, controlled by Austin, Tex.-based entrepreneur Joseph Liemandt and his family, holds stakes in more than 50 tech plays and favours investing in troubled companies.

Coming off their swing-andmiss at Redknee, Constellation management stressed to analysts that they still see plenty of takeover opportunities and forecast up to $1.6-billion (Canadian) of acquisitions in the next five years.

Industry observers are more cautious. Tech analyst Steven Li at Raymond said in a recent report on Constellation: "The slower pace of M&A bears watching, in our view."

Even if Constellation can close deals, the price tag is rising on tech takeovers, which weighs on the potential returns for the buyer.

"Increased private equity competition and shareholder activism has driven up valuation multiples which makes it difficult for disciplined acquirers to deploy capital on mergers and acquisitions," said a report on Constellation last week from CIBC World Markets tech analysts Stephanie Price and Varun Choyah. The pair added: "Though Constellation has lowered its hurdle rate for certain types of acquisitions, we continue to view the environment as challenging."

For Constellation, and any company that looks to takeovers as a growth strategy, it is getting harder to find targets at bargain prices.

Equity valuations are already elevated in many sectors after an extended bull market. Private-equity funds such as ESW Capital have emerged as serious rivals to strategic buyers. And activist funds such as Crescendo are gaining influence as they build sizable war chests and alliances with traditional institutional investors.

Governance guru David Beatty, a professor at the University of Toronto's Rotman School of Management, said a report last week that there are now approximately 550 activist funds around the world, with $180-billion (U.S.) in firepower, compared to $51-billion just five years ago.

Mr. Beatty said: "To magnify their clout, [activists] are increasingly attracting the interest of asset and pension-fund managers and collaborating in transformative campaigns."

Shaw looks ahead after Freedom Mobile lag
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By CHRISTINE DOBBY
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Friday, January 13, 2017 – Print Edition, Page B1


Shaw Communications Inc. remains confident about the path it has set for its fledgling wireless business, Freedom Mobile, despite a quarter of less-than-stellar subscriber numbers.

Chief executive officer Brad Shaw said the company "purposely slowed down" marketing efforts in its fiscal first quarter, which ended Nov. 30, because it is in the midst of launching a new network with LTE (fourth-generation) service and didn't want to "load customers on the old network."

The Calgary-based company also announced a new brand for Freedom Mobile, previously called Wind Mobile, late in the quarter and has since increased promotions and advertising under the new name. Shaw reported Thursday it added only 9,500 new wireless customers in the first quarter, falling short of analyst estimates in the range of 30,000.

But Mr. Shaw says he is not concerned about the weak quarter, telling reporters on a conference call, "We feel we've got good momentum."

Having shed a stable of media assets last year and refocused solely on communications services, Shaw executives are looking past this quarter to what they hope will be a stronger future thanks to a brand-new TV platform, an aggressive push to sell Internet services and investments in Freedom Mobile's network upgrade.

"We're pleased as we're seeing the numbers come in and I think, as you look at the new network, one of the key things is handsets and handset availability," he said. Shaw launched LTE services for Freedom Mobile customers in Toronto and Vancouver in November, but there are only a handful of devices that work on the frequency the network uses, which has not yet been widely deployed around the world.

Mr. Shaw thinks Freedom Mobile - which competes with the three national carriers in British Columbia, Alberta and Ontario - should be able to offer between eight and 10 handsets within six months and said that over the "coming year" he hopes to be able to offer popular Samsung and Apple devices.

Meanwhile, Shaw's TV and Internet businesses showed signs of stability in the quarter with 17,000 new retail Internet customers and a loss of 13,000 cable TV subscribers, an improvement from a loss of 18,000 at this time last year.

Shaw unveiled its new premium television product BlueSky TV - based on Comcast Corp.'s cloud-based X1 technology - on Wednesday. Analysts say the BlueSky platform - which includes a range of interactive features including a voicecontrolled remote - should help Shaw compete with its main competitor Telus Corp.'s Optik TV, and prevent cable television losses from declining even further.

Shaw reported overall revenue roughly in line with expectations but net income dropped almost 60 per cent to $89-million or 18 cents a share, primarily due to a $107-million charge related to the closing of Shomi, its joint-venture online streaming service with Rogers Communications Inc.

Revenue increased 15 per cent to $1.31-billion, short of consensus forecasts for $1.325-billion, while on an adjusted basis, earnings per share of 32 cents were in line with analyst expectations.

As Shaw moves ahead with its TV and wireless investments, some say it should free up more capital by selling its U.S. data centre business ViaWest and other assets not directly related to its Canadian telecom business.

"As we have seen this quarter, the company's entry into wireless is not without operational risk, with net adds falling short," said Desjardins Securities Inc. analyst Maher Yaghi. "We believe it would be best for management to sell non-core assets ... in order to invest the required resources to profit fully from the company's entry into the wireless business."

Shaw purchased ViaWest for $1.2-billion (U.S.) in 2014 and it could now be worth much more owing to precedents set by recent sales of similar companies south of the border. Barclay's Capital analyst Phillip Huang estimated in December the business could be sold for more than $2-billion.

Shaw Communications (SJR.B)

Close: $27.66, down 53¢

U.S. banks benefit from postelection trading surge
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By CHRISTINA PELLEGRINI, JAMES BRADSHAW
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Saturday, January 14, 2017 – Print Edition, Page B2


Robust gains in fixed income trading revenue at JPMorgan Chase & Co. and Bank of America Corp. are an early sign that a surge in activity after the U.S. election was felt across bond markets. And those strong fourthquarter results are buttressing expectations that Canadian banks also benefited from that trend.

U.S. banks were expected to handle more trading orders during the three months that ended Dec. 31, as their clients adjusted their portfolios after Donald Trump's surprise victory in November triggered a selloff of U.S. government bonds.

Results from U.S. banks, which kicked off their latest reporting season on Friday, could offer clues about what investors might expect when Canadian banks report first-quarter earnings starting in late February. JPMorgan and B of A recorded double-digit gains in fixed-income trading during the final quarter of 2016.

Canadian bankers, meanwhile, have previously said they also reaped the benefits of a surge in trading toward the end of last year. But because the Canadian banks' fiscal years end on Oct. 31, much of the impact has yet to be disclosed to investors.

"The expectations had been out of the U.S. that this was going to be a strong FICC [fixed income, currencies and commodities] quarter, and commentary had been that that should continue through into 2017," John Aiken, an analyst at Barclays Capital Inc., said in an interview.

JP Morgan, the largest U.S. bank by assets, said revenue for its fixed-income markets group jumped 31 per cent to $3.4-billion (U.S.) compared with its fourth quarter in 2015. B of A said sales and trading revenue from FICC jumped 12 per cent from the prior year, to $2-billion. Even so, B of A fell short of analysts' estimates.

Chief financial officer Paul Donofrio said its trading segment didn't perform as well as they thought it would because "the market tapered off" in December.

In fiscal 2016, the biggest six Canadian banks saw their revenue from trading fixed-income products surge 26 per cent to $7.3-billion (Canadian), according to Bloomberg. While FICC trading grabbed the spotlight in the fourth quarter, it remains to be seen whether they can build on these results this year.

"The question from my standpoint becomes: have the Canadian banks hit a limit, or will they also benefit from this?" Mr. Aiken added.

Results from some U.S. banks also offered limited insight into the outlook for the Canadian banks' retail operations south of the border.

Net-interest margins - the spread between the rate at which a bank borrows and the rate at which it lends to clients - could be helped by rising rates. The U.S.

Federal Reserve's December rate hike came too late to move the needle substantially in the U.S. banks' fourth quarter, but there is optimism for the coming months.

And that could translate, if not directly, to stronger results for Canadian banks.

At Wells Fargo & Co., which also reported earnings Friday, net-interest margin rose to 2.87 per cent in the fourth quarter, up from 2.82 per cent in the previous three months, but still lower than a year ago. At B of A, the same metric was flat from the prior quarter at 2.23 per cent.

"We expect to see a significant increase in net-interest income in the first quarter of 2017," Mr. Donofrio said.

The next round of Canadian bank results will include reporting from November through the end of January, affording them more time to benefit from the December hike. The biggest beneficiaries would likely be Bank of Montreal and Toronto-Dominion Bank, Mr. Aiken said. But he stressed that "the direct lateral would only be on their U.S. operations which, while they're important, they're a small fraction relative to the total."

Canada's vast network of bank branches to shrink
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By JAMES BRADSHAW
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Thursday, January 12, 2017 – Print Edition, Page B1


Canada's vast network of bank branches will shrink in 2017, with dozens of locations closing as institutions cut costs and invest billions in technology as more customers migrate online.

Banks aren't giving up on branches just yet - many existing locations will be overhauled to focus more on giving advice, leaving tasks such as processing routine transactions to technology.

But as large banks including Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Bank of Nova Scotia have collectively recorded billions of dollars in restructuring charges in recent years, pressure to shrink their real estate footprints and trim staff has intensified, even as executives are wary of alienating customers by pulling back too quickly.

Bank branches are often singled out as examples of institutional stodginess, but also hailed as critical touchstones for gaining customers' loyalty. And as online alternatives proliferate, executives in charge of deciding the fate of branches across the country are being pulled in two directions.

At Scotiabank, 80 per cent of basic payments and transfers are now done online, often through a mobile device.

"And that number's not going to go down, it's going to go up," said chief executive Brian Porter, speaking at a conference of bank executives hosted by Royal Bank of Canada on Tuesday.

Over at TD, 80 per cent of sales come from physical branches, according to CEO Bharat Masrani. "Let's not underestimate the power of the physical distribution," he said, calling the bank's branch network "a sales machine."

All this is happening as banks spend massive sums of money on technology, much of it new, from back-end systems to apps for retail customers. Scotiabank expects to spend $2.5-billion to $2.6-billion on tech this year, at least 60 per cent of which will go to maintaining existing systems, while the rest is spent on new innovations.

Scotiabank has been as aggressive as any bank about shuttering unwanted branches, having closed about 80 locations in the past two years. The bank expects to cut another 5 per cent of its remaining branches, which now number fewer than 1,000 in Canada.

At the same time, it has opened another 20 branches, some of which are experiments with more modern formats - Express branches, with only three or four employees; and Solutions branches, which cater to customers making big decisions such as buying a first home, saving for education or holiday planning.

CIBC expects to trim its 1,100 banking centres, as it calls its branches, nearer to 1,000 by 2019.

"We've taken the view that transformation happens over time," CEO Victor Dodig said, and to rush clients out of branches too quickly would only breed dissatisfaction.

The remaining CIBC locations are being revamped to be "smaller" and "smarter," Mr. Dodig said.

The bank is spending "in excess of a billion dollars a year" on technology projects. About 45 per cent goes to maintenance.

TD has traded in a one-size-fitsall model for its branches for seven different models, and has opened self-service branches in Calgary that have no tellers, adding WiFi and iPads.

And Bank of Montreal has opened a number of "smart branches" designed to "mix the technology with human contact," CEO Bill Downe said. These branches have no tellers, but are instead experimenting with virtual staff who appear on screens built into bank machines. The few employees in the building are "much more like a coach" for customers, he said.

Associated Graphic

Scotiabank has been as aggressive as any bank regarding unwanted branches, closing about 80 locations in the past two years.

FRED LUM/THE GLOBE AND MAIL

Goldman's new Canadian CEO prepares his pitch
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By ANDREW WILLIS, CHRISTINA PELLEGRINI
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Tuesday, January 10, 2017 – Print Edition, Page B1


Newly arrived Goldman Sachs Canada Inc. CEO Jason Rowe knows that in the highly competitive investment-banking sector, he needs to differentiate his firm from rivals. And he's got a pitch ready to go.

Mr. Rowe, who was named head of the Canadian business last month after 15 years with the firm, plans to say that Goldman delivers a unique global perspective to Canadian clients.

Then the veteran tech, telecom and media banker will offer up a case study: Goldman is currently bidding to advise a Canadian company in a "unique" industry on an initial public offering, competing for this mandate with the rest of the dealers on the Street.

He says that no domestic dealer has done a deal in this sector; Goldman, on the other hand, has led five similar IPOs.

"We have a depth of knowledge on global industries that is unmatched," Mr. Rowe said Monday during an interview at Goldman's offices in Toronto, ahead of a flight to Calgary to meet oil patch clients. He said his arrival is part of "the firm's continued investment in Canada."

Goldman has Canadian offices in Toronto and Calgary and shrank its local team over the past year.

A number of foreign-based investment banks cut staff in their Canadian operations as part of global downsizing.

Mr. Rowe says Goldman has "several dozen" Canadian employees and while the head count will remain at this level, the firm plans to deepen coverage of sectors such as technology, financial institutions, real estate, consumer products and health care.

The commitment to Canada reflects an upbeat outlook on potential activity, as Mr. Rowe said Goldman expects to see a steady stream of M&A deals, with domestic companies investing abroad and foreign companies targeting Canadian businesses.

In 2016, Goldman Sachs ranked fifth over all in M&A advising involving a Canadian company, according to data compiled by Thomson Reuters.

The bank worked on 22 transactions last year valued at $84-billion (U.S.). Morgan Stanley, the country's top financial adviser, advised on 20 deals valued at $99-billion.

The New York-based firms, and rival investment banks, also expect to see Canadian companies continue to raise money with equity and debt financings and Mr. Rowe said Goldman will strive to earn a larger share of these underwritings. Canadian companies have traditionally looked to foreign-investment banks for approximately 10 per cent of their stock sales; the domestic dealers dominate this business.

Mr. Rowe takes the reins from former Goldman Canada CEO Peter Enns, a financial-services banker who recently announced plans to retire this spring after 21 years with the firm.

Prior to joining Goldman in 2002, Mr. Rowe was a captain in the U.S. Army, serving in an elite airborne infantry division.

He was named a partner in Goldman in October, 2016.

While Mr. Rowe will be a generalist in Canada, the first point of contact for domestic clients, he plans to put his expertise in tech banking to use by working in the "innovation" economy, with up-and-coming companies.

It's a focus that fits with the economic agenda unfolding under the federal Liberals and provincial governments.

His appointment is part of broader personnel changes that Goldman announced in midDecember to expand their regional footprint across North America.

The bank named four new investment-banking heads at offices in Seattle, Atlanta, Dallas and Toronto.

Raines may finally win the Fame game
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In his 10th and final year of eligibility, former Expo appears set to get long-overdue recognition in Cooperstown shrine
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By SEAN GORDON
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Saturday, January 7, 2017 – Print Edition, Page S3


MONTREAL -- In the fall of 1975, dozens of members of the Baseball Writers' Association of America picked up their office mail to find a familiar yellow citrus.

The fruit packages, accompanied by a letter and detailed statistics, were care of a group calling itself the Wahoo Club of Cleveland. They were meant to bolster the Hall of Fame case for Indians pitcher Bob Lemon.

He entered the following year.

Just over a decade ago, the same community of scribes came under bombardment with information about veteran hurler Bert Blyleven. The data were compiled by a California investment manager and baseball nut called Rich Lederer.

Blyleven was inducted in 2011 and immediately thanked Lederer, a man he'd never met.

In order to get, first you must ask, and it never hurts when someone builds a rock-solid argument.

It helps to have allies. Blyleven's unofficial campaign also involved Bill Hillsman, a long-time Minnesota political consultant.

Which brings us to former Montreal Expos great Tim Raines.

The left-fielder known as Rock is in his 10th and final year on the Hall of Fame ballot and all indications are he will - at last - be able to unveil his bronze plaque in Cooperstown, N.Y., this summer.

According to public and anonymous Hall of Fame ballots analyzed by vote tracker Ryan Thibodeaux, as of the Dec. 31 deadline Raines already has the 20 "flips" - votes from writers who previously didn't support him - he needed to reach the 75per-cent threshold.

It's been a slog, and, should the accomplishment be confirmed, it will be due in no small measure to those who have quietly and not-so-quietly boosted Raines's candidacy.

Many voices have been instrumental - a Montreal-born number cruncher who goes by the nom de guerre Tom Tango (now of MLB Advanced Media), Jay Jaffe of Sports Illustrated and Brian Kenny of the MLB Network to name just three - but few more so than baseball writer Jonah Keri, the author of a well-received 2014 book on the Expos, and radio personality Matthew Ross.

Keri recently quipped that when and if a Raines victory party is held "Ross and I will probably be the guys who have to rent the room and pick up the booze."

Both are native Montrealers - Keri now lives in the United States and works for CBS Sports, Ross is host of a weekly show on TSN Radio and founded Expos Nation, a fan group - and both were burgeoning seamheads when Raines broke into the majors in 1979.

Neither man is in any way interested in claiming credit, but the fact remains the loosely knit campaign supporting Raines, which started almost nine years ago, has been determined, orchestrated and increasingly vast.

It has featured face-to-face persuasion, regular and lengthy e-mails to selected Hall voters, even a Twitter account that makes a point of highlighting every mention of support and thanking whoever made it (Raines does occasionally tweet himself, but the account is largely administered by supporters).

In 2015, when former Expo pitcher Pedro Martinez got into Cooperstown, the pro-Raines crowd didn't miss the opportunity to work various rooms on behalf of their guy.

The remarkable thing, when you consider the numbers, is that any arm-twisting has been required at all.

"When you dig beyond the surface, Tim Raines and [first-ballot Hall of Fame outfielder] Tony Gwynn are basically the same player," Keri said. "It's not a close call or in any way a marginal candidacy."

So why wouldn't voters recognize it?

"Well, [Raines] didn't get to 3,000 hits ... it's a feel test and, if you don't have that milestone, it's hard for some voters to get there," Keri said. "Never mind that he reached base almost 4,000 times. He also stole more than 800 bases, which only four other people have done, and all of them are in the Hall."

That Raines overlapped with Rickey Henderson - the best leadoff man of all-time, just ask him - is surely a hindrance, as is the fact he played his prime in out-ofthe-way Montreal.

But Raines was a far more efficient base-stealer than Henderson, and had a higher career batting average (and OPS).

A decent argument can be made that between 1981 and 1990 he was the best player in the National League - better than his Hall of Fame buddy Andre Dawson and players such as Mike Schmidt and Dale Murphy.

He won two World Series rings later in his career, and was beloved as a teammate everywhere he played. Added Ross: "People like to raise the cocaine problem early in his career, but he admitted it, kicked it and then stayed clean. He also came back from lupus. How come nobody ever talks about that?" Baseball is fundamentally anachronistic as a sport, so it follows that its Hall of Fame procedures are something of a relic, as well.

In the past, lobbying aggressively on one's own behalf simply wasn't done.

There's a long-standing belief Chicago Cubs legend Ron Santo's consecration was delayed three decades for that very reason - the former third baseman was elevated in 2012, the year after he died, by the veterans' committee, after years of cheerleading from people including former U.S. senator Dick Durbin of Illinois.

Until last year, the BBWAA allowed anyone who had spent 10 years on the baseball beat to have a Hall of Fame vote for life.

The practice incentivized grudges by the people Boston great Ted Williams memorably derided as "maestros of the keyboard," and meant voters included many who hadn't followed the game closely in years.

The arbitrary 10-year requirement remains in place, but now voters who haven't covered the game regularly in the past decade no longer receive ballots.

And as of 2018 there will be a requirement the 400 or so Hall of Fame ballots cast each year be - gasp! - made public.

"I think it's definitely helped Raines that there's been a bit of a demographic shift in the voters, who tend to be getting more receptive to analytic arguments," Keri said.

Some of that is also down to improved metrics and to technology. As Lederer, whose father was a longtime BBWAA member, has said: "without [the Internet], I wouldn't have a voice."

Suspense remains for the class of 2017, which will be unveiled Jan. 18.

Three players are virtual locks: Raines, infielder Jeff Bagwell, and catcher Ivan (Pudge) Rodriguez.

This year's ballot also features two other former Expos: outfielder Vladimir Guerrero, who has an outside shot in his first year on the ballot, and Larry Walker, who has a stronger case than Guerrero's based on the numbers, but will fall short again.

Pitcher Trevor Hoffman and designated hitter Edgar Martinez are maybes. Roger Clemens and Barry Bonds, obvious Hall of Famers, who remain controversial choices because of their admitted history of doping, stand a chance.

Raines, who couldn't be reached for comment, has previously suggested reaching Cooperstown - where he would arrive in an Expos cap - would likely mean more to his family than it does to him.

It would also constitute the baseball world officially recognizing something his fans already believe: He is one of the greatest players in history to step onto a diamond.

Associated Graphic

Tim Raines, seen as a Montreal Expo in 1989, left, and in 2001, right, was 1986 NL batting champion and a seven-time all-star.

LEFT, JONATHAN DANIEL/GETTY IMAGES

Klopp's Liverpool flops, Chelsea rolls
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Liverpool manager's decision to field youngest-ever side backfires spectacularly against Sunderland
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By JEROME PUGMIRE
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The Associated Press
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Monday, January 9, 2017 – Print Edition, Page S3


Juergen Klopp's decision to field Liverpool's youngest-ever team backfired Sunday as the Premier League title contender was held 0-0 at home by fourth-tier Plymouth in the third round of the FA Cup.

Tottenham manager Mauricio Pochettino also made sweeping changes, and was made to sweat as his side left it late to beat second-tier Aston Villa 2-0.

Chelsea had an easier time, sweeping aside third-tier Peterborough 4-1, with Spanish forward Pedro scoring twice.

With games coming thick and fast during the festive season and a midweek trip to Southampton looming in the first leg of the League Cup semi-final, Klopp made 10 changes from the team that drew 2-2 with Sunderland on Monday.

But instead of keeping players rested for other competitions, Klopp now faces an unwanted replay at Plymouth's Home Park stadium, around 470 kilometres from Anfield, England.

"It's my responsibility, the whole thing, the lineup and performance. We could have done better," Klopp said. "If you want to see it [the result] in a bad way, then I am 100-per-cent responsible, I have no problem with that."

Liverpool is in second place in the Premier League and well positioned to challenge for the title.

Plymouth is second, too, but in the far less glamorous League Two. Despite this, it still seemed a risky move by Klopp to field a team who's average age is 21 years, 296 days.

"There is a long season still to go and we need to change," Klopp said. "If you make that many changes, it doesn't make it easier for the boys."

The 17-year-old Ben Woodburn - Liverpool's youngest-ever scorer - made his full debut alongside 19-year-olds Ovie Ejaria and Sheyi Ojo in a three-man attacking midfield supporting lone striker Divock Origi. Trent AlexanderArnold made only his second Liverpool start.

Attacking midfielder Adam Lallana, forward Roberto Firmino and England striker Daniel Sturridge were on the bench.

Woodburn and Ojo went close early on as Liverpool dominated.

But for all of its possession, Liverpool struggled to create further chances.

"We started well but then we lost patience too early," Klopp said.

Klopp brought on Sturridge shortly after the hour mark, and he went close almost immediately with a low shot past the right post.

Sturridge then clipped another shot narrowly wide as Liverpool continued to push forward. But even with the introduction of Lallana and Firmino late on - and six minutes of injury time - the winner never came.

There were no such frustrations at Stamford Bridge, with Belgium striker Michy Batshuayi and Brazil midfielder Willian getting the other goals.

Defender Ben Davies put Tottenham ahead and South Korea forward Son Heung-min scored for Tottenham in the last 20 minutes, while Middlesbrough eased past second-tier Sheffield Wednesday 3-0.

Also, 16-year-old Ryan Sessegnon scored Fulham's winner in a 2-1 win at Cardiff - a match pitting teams from the second-tier Championship.

Defending champion Manchester United crushed Championship side Reading 4-0 on Saturday, but Premier League Bournemouth, West Bromwich Albion and Stoke lost to lower-league opponents, while Arsenal needed a late winner against Preston to reach the fourth round.

Chelsea 4, Peterborough 1

Striker Michy Batshuayi got a rare start and welcome goal for his club while Spanish forward Pedro made it three in three games.

After Pedro put Chelsea ahead in the 18th minute, Batshuayi made it 2-0 shortly before halftime.

Midfielder Ruben Loftus-Cheek expertly cushioned a cross from the right into Batshuayi's path, and he drilled in a low shot into the bottom corner for his fourth goal of the season.

Since joining from French club Marseille for a reported fee of around $40-million (U.S.), Batshuayi has struggled to get games and he had not scored since netting twice in the League Cup on Aug. 23.

Pedro set up Willian's goal in the 53rd for 3-0 and - after John Terry was shown a straight red card for hauling back Lee Angol - forward Tom Nichols scored for the visitors.

With 15 minutes left, Pedro's curling shot completed a comfortable win.

Tottenham 2, Aston Villa 0

Defender Ben Davies's first goal for the club was a timely one after second-tier Aston Villa frustrated the home side.

Mauricio Pochettino made nine changes from the Tottenham side that beat Chelsea 2-0 in the Premier League on Wednesday and fans at White Hart Lane had to wait until Davies headed home in the 71st minute.

South Korea forward Son Heung-min turned in a cross from France midfielder Moussa Sissoko with 10 minutes left.

Middlesbrough 3, Sheffield Wednesday 0

Central midfielder Grant Leadbitter put the Premier League side ahead with a free kick in the 58th minute, and Spanish forward Alvaro Negredo showed his alertness to make it 2-0 shortly after.

Negredo charged down goalkeeper Joe Wildsmith's attempted clearance, and the ball went off Negredo and into the net.

Dutch midfielder Marten de Roon wrapped up the win against the Championship side in injury time.

Associated Graphic

Tottenham's Son Heung-min finds a gap in the net to score the team's second goal against Aston Villa with 10 minutes remaining in regulation in FA Cup play at White Hart Lane in England.

TOBY MELVILLE/REUTERS

Crosby leads in midseason MVP forecast
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A mix of past winners and surprising newcomers headlines trophy predictions at the season's halfway point
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By JONAS SIEGEL
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The Canadian Press
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Thursday, January 12, 2017 – Print Edition, Page S3


Edmonton Oilers star Connor McDavid will finally turn 20 on Friday, ending his spectacular run as a teen.

And while McDavid has indeed given Sidney Crosby a run for his money as the best player in hockey, the Penguins captain still reigns supreme at the midway point of the 2016-17 season.

Here are our midseason picks for the top NHL awards, beginning with an MVP race that comes down to McDavid versus Crosby.

Hart Memorial Trophy Winner: Crosby The case: It bears repeating that Crosby started his season about two weeks after McDavid and everyone else and still leads the league in goals. The Penguins captain got to 20 goals faster (22 games) than at any point in his career and has mustered three separate scoring streaks of at least three games. He's on pace for a careerhigh of almost 60 goals, remaining the game's best player following unmatched showings in the Stanley Cup playoffs and World Cup of Hockey. McDavid has certainly made it a race, but Crosby has the edge, topping his 19-year-old counterpart in points a game, five-onfive points per 60 minutes, puck possession and the percentage of scoring chances his team gets when he's on the ice.

Runner-up: McDavid

Vezina Trophy Winner: Devan Dubnyk The case: There's a wide range of contenders for this award, especially in Columbus where Sergei Bobrovsky, a former Vezina winner, has re-emerged following a down year. But Dubynk is the guy at this point with a save percentage around .940 more than three months into the season (he leads the league). The former Edmonton Oilers first rounder also has a goals-against average well under two and five shutouts. It took until the end of December for the 30-year-old to give up more than three goals in a game. He's been consistent too, boasting a .952 save percentage in October, a .942 mark in November and .934 in December.

Runners-up: Bobrovsky; Braden Holtby; Tuukka Rask; Carey Price .

Norris Trophy Winner: Drew Doughty The case: Another hard choice, but Doughty earns the top defenceman honour both for the quantity and difficulty of his minutes for a Kings squad that has wobbled without No. 1 goaltender Jonathan Quick. Doughty is putting together about the same kind of year as the one that delivered him last season's Norris Trophy. Just like last year, the 27year-old is propping up a lesser partner - rookie Derek Forbort in this case - all while continuing to log big minutes and the most shifts of any player in the league on a nightly basis. He also rates statistically as one of the more effective penalty killers at his position for a Los Angeles penalty kill that lands as one of the NHL's best.

Runners-up: Brent Burns; Victor Hedman; Duncan Keith; Shea Weber; Erik Karlsson

Calder Trophy Winner: Auston Matthews The case: The Maple Leafs emerging top centre is putting together one of the greatest seasons ever for a rookie, on pace for more than 40 goals and 70 points at the age of 19. Unlike Patrik Laine, who's been equally as potent with respect to scoring, Matthews is thriving at the more demanding centre position against increasingly difficult competition with head coach Mike Babcock matching him against top lines in recent weeks.

He's also scored almost all of his goals at even-strength, nestled there with Crosby among the league leaders. Laine has scored a lot too, never going more than six games without a goal. This year's Calder class is strong, but it's Matthews's award to lose.

Runners-up: Laine; Zach Werenski; Mitch Marner; Matthew Tkachuk; William Nylander; Matt Murray

Jack Adams Trophy Winner: Mike Sullivan The case: The Penguins have sort of slipped under the radar amid the Blue Jackets' stunning success, but the reigning Stanley Cup champs have remained superb this season, especially since the beginning of December. In fact, Pittsburgh entered a challenging Wednesday tilt in Washington with just one regulation loss in that stretch (13-1-2), badly outscoring the opposition while boasting elite special teams. The Penguins haven't lost at home (where they sport an 18-2-2 record) since the middle of November. Unlike John Tortorella's Jackets, Sullivan's goaltending has been good, not great, and he's been forced to confront a host of injuries on defence, including those to Kris Letang, Brian Dumoulin and Trevor Daley. The American-born Pittsburgh head coach has also expertly shuffled around his forward combinations when needed. Tortorella has obviously done a fine job steering Columbus to an unlikely place atop the league, but Sullivan has managed to keep the Pens right near the top after a Cup win, a challenging proposition.

Runners-up: Tortorella; Barry Trotz; Bruce Boudreau; Joel Quenneville

Associated Graphic

Pittsburgh Penguin captain Sidney Crosby, left, and Connor McDavid of the Edmonton Oilers are in a close race at the halfway point for the league's most valuable player. McDavid is still behind Crosby in the goals standings, despite Crosby's starting the season two weeks late.

GENE J. PUSKAR/THE ASSOCIATED PRESS

Pacioretty speaks softly, carries hot stick
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Montreal captain is consistently one of the NHL's most effective scoring threats, yet he does not get the respect he deserves
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By JONAS SIEGEL
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The Canadian Press
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Wednesday, January 11, 2017 – Print Edition, Page S3


Max Pacioretty will have to wait at least another year to get his time in the all-star spotlight.

The Montreal Canadiens captain was left off this year's allstar roster despite being one of the league's most consistent scoring threats.

He built a strong case for this month's event in Los Angeles, right there (yet again) among the league leaders with 19 goals and hotter than anyone since the middle of November.

The 28-year-old's star power still needs a boost, falling well short of his production on the ice. Only three players have scored more goals (173) than the U.S. winger since 2011: Alex Ovechkin (243), Steven Stamkos (202) and Joe Pavelski (178).

His 129 even-strength markers are bettered only by superstars Ovechkin (139) and Stamkos (139).

"I don't know about [the media], but we don't [take him for granted]," Canadiens head coach Michel Therrien said recently. "We appreciate what he's capable [of doing]. The last two months he's been phenomenal with us."

After a slow start - just two goals in the first 14 games - Pacioretty has been scorching hot.

He's tied with Sidney Crosby and Jeff Carter for the NHL lead in goals since Nov. 12 with 17.

He notched four in three games last week, including backto-back overtime winners, the second one giving him the franchise lead in OT markers.

His 38 winning goals over the past five-plus seasons trail only Ovechkin's 42.

Therrien raved about his play, pointing to his "passion" in particular, and positive influence on the dressing room of the division-leading Canadiens.

"He wants to make a difference every game," Therrien said of Pacioretty, on pace to hit 38 goals and establish a new career-best with 68 points. "And he's doing a hell of a job for us."

Teammate Mark Barberio thought Pacioretty's consistency as a scorer - in an era when goals continue to trend downward and goalies get bigger and better - was underrated.

In fact, Pacioretty has been one of the league's most consistent scoring threats, one of only four players to hit 30 goals in each of the previous four full seasons - the others being Ovechkin, Pavelski and the Ducks' Corey Perry.

Yet, he's rarely in the conversation.

He has probably been overshadowed by star teammates Carey Price, P.K. Subban, Shea Weber and Alex Radulov.

He's also never been the best or even second-best player on his team and his game lacks the sizzle of Ovechkin or Stamkos.

While he may not be flashy, Pacioretty is highly effective.

Formerly of the Tampa Bay Lightning, Barberio joined the Habs last year and was struck by the quickness of his new teammate's release, describing his shot as "world class."

"He's deceptive," Barberio said.

"And when he brings it to the net, he brings it with a lot of force and I think that's what surprises goalies the most.

"Not everybody has a shot like that," he added. "There's [only] a few guys in the league that can just beat a goalie clean one-on-one and he's definitely one of them.

"We're lucky to have him."

Pacioretty's wrist shot, in particular, has been the NHL's most lethal over the past six seasons. He tops all players with 111 goals on his wrist shot in that span, trailing only the Blues' Vladimir Tarasenko and Jets' Mark Scheifele with 12 this year.

Pacioretty doesn't just score either. Underlying numbers suggest he's one of the more effective penalty-killing forwards in the NHL, albeit in a secondary role.

He's also one of Montreal's top puck-possession players (53.8 per cent), a long 6-foot-2, 215pound winger who has spent the year with a variety of linemates amid injuries for the Habs.

Only one Atlantic Division forward, Toronto's Auston Matthews, has more goals than Pacioretty so far and, heading into Tuesday's play, only three had more than his 34 points (Nikita Kucherov, Brad Marchand and Matthews).

But it was not enough to earn him a first-time all-star nod with Price and Weber both garnering spots for Montreal.

"Maybe he flies under the radar, but not in this room," Barberio said. "We know what he brings."

Associated Graphic

Montreal's Max Pacioretty scores the game-winner against Stars goaltender Kari Lehtonen in Dallas on Jan. 4.

LM OTERO/THE ASSOCIATED PRESS

Arid City: Manchester prospects dry up
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Managers Guardiola and Mourinho the odd men out as early title favourites City and United languish behind the league's top four
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By STEVE DOUGLAS
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The Associated Press
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Monday, January 16, 2017 – Print Edition, Page S2


MANCHESTER, ENGLAND -- The Premier League season is barely past the halfway point and already Manchester City manager Pep Guardiola has virtually given up on winning the title.

The world's most-coveted coach can't have envisaged his first year in English soccer being this tough.

It takes something special to overshadow a match between bitter rivals Manchester United and Liverpool, but City's 4-0 loss at Everton on Sunday did just that.

As he slumped to the heaviest loss of his career in a domesticleague match, Guardiola - with his arms folded - was seen staring into space while he sat in the Goodison Park dug-out. At other times, he had his face in his hands.

City has dropped out of the Champions League positions, into fifth place, and 10 points adrift of leader Chelsea.

Asked if the gap to first place was now too great, Guardiola said: "[To] the first one? Yes. Ten points is a lot of points. The second one is three points. We have to see."

A fifth loss of the league season was administered by a team managed by Guardiola's friend and former Barcelona teammate, Ronald Koeman.

"Pep Guardiola knows it is a project at Manchester City," Koeman said. "Of course, maybe they expected better results and a defeat like this is really strong but Pep has the experience to turn it around."

Man United kicked off less than an hour after City's drubbing but couldn't get a win that would have put the neighbours tied on points, drawing 1-1 with Liverpool at Old Trafford.

After 21 of 38 games, City and United - the two preseason title favourites - are outside the top four. Two high-profile managers were always going to have their reputation tarnished this season, with six big teams challenging for four Champions League spots.

Few would have predicted they'd be Guardiola and Jose Mourinho.

Here's a closer look at the top games that pitted Merseyside against Manchester: .

Everton 4, Manchester City 0

While there was misery for City at Goodison Park, there was jubilation for Everton after a win that was sealed by goals from two of the club's promising teenagers.

Goals either side of halftime by Romelu Lukaku and Kevin Mirallas set Everton on its way before 18-year-old midfielder Tom Davies raced into the area and dinked a deft finish over goalkeeper Claudio Bravo, the ball landing just inside the post.

It completed an impressive display by Davies, who has now started two straight games and is distinctive with his all-action style and mop of blond hair.

The fourth goal was scored by 19-year-old debutant Ademola Lookman, four minutes into injury time. And it summed up City's sloppy performance.

John Stones - a former Everton player - tried to clear the ball for a throw-in only to see it ricochet off Everton defender Seamus Coleman to set up Lookman.

Signed from Charlton this month, and on as a late substitute for his debut, Lookman placed his shot through Bravo's legs.

"How we played in the second half was really perfect," Koeman said. "In my opinion, it is impossible to play at a higher level, in every aspect of football. It was a perfect afternoon."

Manchester United 1, Liverpool 1

Zlatan Ibrahimovic equalized late for United to bail out teammate Paul Pogba in a frantic, intense match at Old Trafford between the two most decorated teams in English soccer.

On the day United rolled out advertising displays featuring Paul Pogba's new Twitter emoji, the player himself made a crucial mistake by conceding a penalty for a handball while jumping with his back to the ball at a corner.

James Milner converted the spot kick but Liverpool was denied a win after Ibrahimovic glanced a header in off the crossbar in the 84th minute, moments after substitute Marouane Fellaini headed against the post.

Liverpool ended United's ninegame winning run in all competitions - six of which had come in the league - but dropped seven points behind first-placed Chelsea. Sixth-place United was 12 points off the leader.

Associated Graphic

French midfielder Paul Pogba of Manchester United, left, vies with Liverpool midfielder Roberto Firmino as Reds' manager Jose Mourinho looks on during the team's match at Old Trafford on Sunday.

OLI SCARFF/AFP/GETTY IMAGES

Downey returns to lead Tennis Canada
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Having served as CEO from 2004 to 2013, he resumes his post after a short spell as the head of the British Lawn Tennis Association
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By DAN RALPH
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The Canadian Press
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Friday, January 13, 2017 – Print Edition, Page S2


TORONTO -- Family connections are bringing Michael Downey's career full circle.

Downey is returning to Tennis Canada as its chief executive officer, a position he held from 2004 to 2013 before leaving to head up the British Lawn Tennis Association.

"While my wife and I have thoroughly enjoyed living in Britain, there was a call to reconnect with family and friends," Downey said during a conference call Thursday. "I have two sons, a 19-year-old and a 21-yearold who live in the Toronto area.

"I just don't get to see them enough. Now, being based in Toronto I'm going to be able to spend more time with my sons as they're in postsecondary school, while also [leading] tennis in Canada, which is so important and a great opportunity." Downey officially takes over in July. He succeeds Kelly Murumets, who left Tennis Canada at the end of last year.

"We're just so happy to be able to welcome Michael back to Tennis Canada, and just as importantly to welcome him back to Canada," Tennis Canada board chairman Derrick Rowe said.

"We interviewed some very, very talented people and Michael, obviously, was the selection.

"We couldn't be happier."

Downey's return comes at a heady time for Canadian tennis.

Hard-serving Milos Raonic of Thornhill, reached last year's Wimbledon final, losing to World No. 1 Andy Murray of Britain, and finished third in the ATP rankings - the best ever by a Canadian. The country's Davis Cup team remains in the elite World Group for a sixth successive year and will play host to Britain next month in Ottawa.

Eugenie Bouchard, 22, of Westmount, Que., remains Canada's top-ranked women's player at No. 46 but was fourth in October, 2014, after reaching the Wimbledon final.

Canada also boasts three players in the world junior boy's top-10 rankings, led by Montreal's Felix Auger-Aliassime at No. 2. Vancouver's Benjamin Sigouin stands fourth, while Denis Shapovalov of Thornhill, Ont., is sixth.

Bianca Andreescu of Mississauga, is No. 29 in the junior-girls standings.

"There's no better situation to come into than one [where] the sport is actually quite healthy," Downey said. "At the end of the day, if the sport is doing really well I think there's always an opportunity to try and actually generate more revenues that can then be plowed back into the sport.

"Whether they're plowed back into the performance side or participation side we need to take full advantage of that. It's not that the staff isn't doing that now but it's sure an area I'd want to explore because these are times you have to take full advantage of to actually grease the engine to get further success moving forward."

And although tennis is succeeding in Canada, Downey said it's important to always continue looking at how to grow the game.

"With the sport doing well, this is about generally enhancing it," he said. "Looking at the opportunities and say, 'How do we go deeper to uncover those things or maybe generate more growth in certain areas?' There may be pockets where more exploratory [work] is needed to actually look at how to unlock some of that growth, whether that's in park courts in local authorities where the sport has an opportunity to break through.

That may be an area we want to explore to complement the great growth that we're seeing in tennis clubs across the country."

Downey admits he'll leave Britain with some regret.

"The sport now is turning the corner, we're seeing signs of growth after over 10 years of decline so it's tough to leave that situation," he said. "I have mixed feelings but I think that's good because it's always better to be leaving a place when you're actually doing really well and enjoying it.

"When Derrick gave me a call ... I just had to go for it because jobs like this don't come around very often, especially when things are going well with Tennis Canada and especially when it met the personal needs of my wife and I wanting to come back to this great country."

Wickenheiser hanging up her skates
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By DONNA SPENCER
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The Canadian Press
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Saturday, January 14, 2017 – Print Edition, Page S5


CALGARY -- When Hayley Wickenheiser sees girls dragging hockey bags into arenas, she feels a sense of accomplishment.

The normalcy of girls playing hockey is what she sweated, fought and shed tears for.

When Wickenheiser started playing 33 years ago, there were no girls' teams. She played with boys and wasn't always welcomed by players or their parents.

"The greatest stride's been made in the acceptance of girls playing the game," Wickenheiser says. "Any little girl in this country can walk into a hockey rink and no one is going to think twice or look twice.

There's female hockey change rooms in a lot of rinks now.

"I remember when I was a kid, I hid in the bathroom and tucked my hair up so no one would know I was a girl. I just went through hell really, to play.

Girls don't have to go through hell anymore to play hockey."

The fact that female hockey has arrived at this stage puts some soothing balm on the difficult decision to end her playing career.

The country's career leading scorer announced her retirement Friday after 23 years on the Canadian women's team and almost a dozen Olympic and world championship gold medals.

"Dear Canada. It has been the great honour of my life to play for you. Time to hang em up!! Thank you!" Wickenheiser posted on her Twitter account.

Not only was Wickenheiser a star in women's hockey when the game desperately needed one, she changed perceptions of what women are capable of in sport.

The 38-year-old from Shaunavon, Sask., told The Canadian Press in a sometimes tearful interview she didn't want to postpone her entrance into medical school any longer.

"It has been the greatest honour of my life to play for Canada," Wickenheiser said. "I'll miss it."

The number of registered female players in Canada went from 16,000 in her first year on the national team to almost 87,000 today.

Bob Nicholson, who was Hockey Canada's president and chief executive officer during most of Wickenheiser's career, said she played a big role in giving "girls the dreams that boys had."

"Her record speaks for itself winning so many gold medals, but in years to come, the biggest memory will be how she inspired so many girls to play the game," said Nicholson, now CEO of Oilers Entertainment Group. "She always was harder on herself than any of her teammates and pushed herself to excellence."

Her forays into men's professional hockey in Finland and Sweden set new standards on how much a woman can be pushed physically. She played a combined 65 men's professional games in Europe.

Her decision to play with and against men wasn't unanimously supported at home. Some female teammates believed she should stay in Canada and help develop women's leagues here.

But Wickenheiser made choices she felt would make her a better player, which meant leaving her comfort zones.

She trained in her off-seasons with NHL players, making headlines skating in Philadelphia Flyers rookie camps when she was in her early 20s.

"I'm comfortable being uncomfortable," Wickenheiser said.

Hockey isn't done with Wickenheiser. There will be opportunities for her to work in the game. She said she's had discussions with people in the NHL, but there are no concrete plans yet.

A 5-foot-10, 171-pound forward with a heavy shot and creative hands, No. 22 was the dominant female player in the world in this century's first decade.

Named MVP of the 2002 and 2006 Olympic women's hockey tournaments, Wickenheiser's 379 career points for Canada - 168 goals and 211 assists in 276 games - will be difficult to match.

The active player with most points is Meghan Agosta at 155 in 155 games.

Wickenheiser is one of just five athletes in the world - joined by retired teammates Jayna Hefford and Caroline Ouellette - to win gold at four consecutive Winter Games.

Associated Graphic

Canada's Hayley Wickenheiser retires as the country's women's career-leading scorer.

JEFF MCINTOSH/THE CANADIAN PRESS

Brady registers 200th career win
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Patriots celebrate franchise's 500th victory as their quarterback moves up to tie Peyton Manning for first on the all-time wins list
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By DENNIS WASZAK JR.
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The Associated Press
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Monday, November 28, 2016 – Print Edition, Page S4


EAST RUTHERFORD, N.J. -- Tom Brady tied Peyton Manning for the most wins by a quarterback in NFL history, getting his 200th by throwing a go-ahead eight-yard touchdown pass to Malcolm Mitchell with one minute 56 second left to lead the New England Patriots to a 22-17 victory over the New York Jets on Sunday.

Trailing 17-16 with 5:04 left and the ball on the Patriots' 17-yard line, Brady led an efficient drive, completing six passes to push New England down the field.

After James White stretched for four yards on fourth-and-four, a 25-yard catch by Chris Hogan put the ball at the eight. Brady then zipped a pass to Mitchell to put the Patriots (9-2) ahead.

A two-point conversion try by White was initially ruled good, but the call was reversed because the ball never crossed the goal line - giving the Jets (3-8) a final chance.

But on second-and-five from the 30, Chris Long hit Ryan Fitzpatrick before he could throw, resulting in a fumble that was recovered by Trey Flowers.

Brady and the Patriots then ran out the clock - helped by LeGarrette Blount's 23-yard scamper - to win the closely played game that had been flexed out of a prime-time spot.

Patriots fans loudly chanted "Brady! Brady!" in the final moments at MetLife Stadium, which had lots of empty seats with frustrated Jets fans apparently opting to stay home.

It was the 500th win in franchise history for the Patriots, who became the first original AFL franchise to reach the mark.

Brady, who was questionable with a knee injury before game time, wasn't his usual spectacular self, but finished 30 of 50 for 286 yards and two touchdowns.

Mitchell caught five passes for 42 yards and two touchdowns.

Fitzpatrick, who was back as the starter after missing New York's last game with a sprained knee, was 22 of 32 for 269 yards.

The Jets had taken a 17-13 lead with 10:17 left when Quincy Enunwa leaped over Malcolm Butler in the end zone to grab a pass from Fitzpatrick.

The wide receiver's right foot came down inbounds and while his left foot never touched the ground his backside did.

It was initially called an incomplete pass, but Todd Bowles challenged and the call was reversed - for a 22-yard touchdown.

Stephen Gostkowski's 41-yard field goal with 7:02 left cut the Patriots' deficit to one at 17-16.

New England took advantage of a Jets turnover in the second quarter when Robby Anderson caught a pass and gained 25 yards, but had the ball punched out of his hands by Devin McCourty.

Butler recovered, and Brady went to work with an efficient drive.

He completed an 18-yard pass to Julian Edelman, joining Manning (71,940), Brett Favre (71,838), Drew Brees (64,180) and Dan Marino (61,361) as the only players with 60,000 yards passing.

A 15-yard run by Dion Lewis got the ball to the five and he added a one-yard run.

On the next play, Brady fumbled the snap but recovered and fired a pass to Mitchell for the tying score.

New England tight end Rob Gronkowski left the game late in the first quarter with a back injury.

He had been uncertain to play after missing last week's game with a chest injury.

It was not immediately certain if the latest injury was connected to the previous one.

Gronkowski had no catches when he left, with Brady unable to connect with him on two third-down throws.

Associated Graphic

Patriots receiver Julian Edelman, right, goes to the ground after a catch against the Jets during Sunday's game in New York.

ROBERT DEUTSCH/USA TODAY SPORTS

Coach explains Saturday lineup blunders
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Desjardins thought he would have at least one of his two injured defencemen available, but neither could dress
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By JOSHUA CLIPPERTON
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The Canadian Press
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Tuesday, January 10, 2017 – Print Edition, Page S3


VANCOUVER -- One of Canucks head coach Willie Desjardins' longest chats with the media this season was mostly spent talking about what didn't happen over the weekend.

Like, why did Vancouver not recall a defenceman from the minors for insurance heading into Saturday's second game of a back-to-back against the Flames in Calgary, forcing the team to ultimately go with a skeleton crew of five blue liners?

And how was it that Anton Rodin - dressed as the 13th forward - stayed stapled to the bench the whole night, not seeing a single second of ice time?

"It was unusual," Desjardins said Monday of his short-handed defence in that 3-1 loss to Calgary.

"It was a hard situation to prepare for."

"There's lots of things with Rodin," the coach continued later. "I like Anton Rodin."

On the defensive question, Desjardins said Christopher Tanev stayed in Vancouver to get checked out after taking a shot up high in Friday's 4-2 home victory over the Flames.

It was hoped he could fly to Calgary on Saturday, but when that didn't happen the club still had what it thought were six healthy defencemen.

Things got dire when Ben Hutton, who was hit in the hand by a puck Friday, revealed after warmup he wouldn't be able to go, leaving the Canucks scrambling.

"I thought both would probably be okay," said Desjardins. "They say it's 50/50, it's like you might get one of them back. We thought we'd get one."

The decision had also been made earlier in the day that summoning a player from the AHL's Utica Comets, who were in Pennsylvania, didn't make sense when taking travel considerations into account.

"How much better is that guy going to be in your lineup than if you had to go with five defence?"

Desjardins said. "We played a good game in Calgary. It was probably the right way to go, going with five. That's not how you want to go into games."

Tanev travelled with the Canucks as they set out on a two-game road trip to Nashville and Philadelphia, but Desjardins said Hutton will be out for "a bit."

Despite the tough circumstances, Tanev thought the Canucks put up a spirited fight in Saturday's defeat that snapped a six-game winning streak.

Vancouver had looked outmatched the previous night, getting outshot 46-13 despite posting a 4-2 win over the Flames.

"I was just as surprised as you guys when I turned it on and saw there were only five defencemen playing," said Tanev, who missed 20 games earlier this season with a lower-body injury. "They did a great job."

Desjardins said he dressed Rodin as an insurance policy in case someone went down against a physical Calgary team.

He added that after sitting the 2015-16 MVP of the Swedish Hockey League for the first period, it wasn't fair to throw Rodin out for one or two shifts.

"I felt bad for him," Desjardins said.

The ethics of self-driving cars
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By GREG KEENAN
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Saturday, January 14, 2017 – Print Edition, Page B2


It's a fairly simple choice on the surface: Does a driver swerve to avoid a dog crossing the road?

If that's an easy choice, make it a little harder: Does a driver swerve to miss a pedestrian on the road if the driver knows his or her own life will be put in danger?

Millions of people around the world make these choices and others like them every day. Some die as a result.

When autonomous vehicles get on the road in large numbers in the next decade, machines will be making these decisions, giving rise to a growing debate about what ethical and moral choices should be programmed into selfdriving cars.

"It's a huge issue," Bill Ford, chairman of Ford Motor Co., told a small group of reporters over dinner at the North American International Auto Show in Detroit.

The discussion in the industry is all about hardware and software for autonomous vehicles and how soon they will be widely available, but "nobody's talking about ethics," Mr. Ford said.

"If this technology is really going to serve society, then these kinds of issues have to be resolved, and resolved relatively soon," he said.

Auto makers and suppliers are spending billions of dollars developing technology to make cars autonomous - in the interests of making roads safer and reducing or eliminating the estimated 737 deaths every hour, every day of the year, from traffic accidents around the world.

There are now systems in place that will pull vehicles back into their lanes when they drift out of them; brake automatically if necessary; and warn drivers of cars in their blind spots.

But cars that drive themselves will have to make choices that are now made by humans.

The early data about the choices humans want those vehicles to make are not encouraging.

"People think cars should minimize total harm, but they don't want to buy cars that are going to diminish their own safety," said Iyad Rahwan, an associate professor at MIT who specializes in collective intelligence and the social aspects of artificial intelligence.

That's the indication from a series of surveys he and colleagues from France and Oregon conducted.

"Figuring out how to build ethical autonomous machines is one of the thorniest challenges in artificial intelligence today," they wrote in a paper published in Science magazine last June.

Mr. Ford is concerned about who will be responsible for setting standards and what those standards will be.

"Ultimately, government's going to have to play a role but then you say, well just the U.S. government, how about the Chinese government," he said.

"I think we're going to have to have a global standard because we can't have different sets of ethics."

The U.S. government has set some high-level standards and set up a special committee of 25 people this week to advise the Department of Transportation on automation and a number of transportation systems. Advisers include General Motors Co. chairman Mary Barra, Los Angeles Mayor Eric Garcetti and Chesley 'Sully' Sullenberger, the former U.S. Airways pilot who landed a plane in the Hudson River.

Prof. Rahwan and MIT have set up an interactive website called Moral Machine that lays out 13 scenarios for potential crashes involving self-driving vehicles, passengers, pedestrians and animals and allows users to choose one of two outcomes in each of the scenarios.

The website has gone viral several times, Prof. Rahwan said, and researchers have collected 22 million decisions from 160 countries that they hope will help regulators decide how to program cars.

Information is still being collected, he said, but there are quantifiable differences in attitudes between North Americans and people from other regions.

The simulations include choosing whether an autonomous vehicle that has lost its brake functions should kill five pedestrians or five people in the vehicle.

It's morbid and uncomfortable, Mr. Rahwan acknowledged, but "we want people to feel the discomfort of those who are trying to regulate cars and trying to make these kinds of judgment calls on design choices that have societal implications."

He is worried about a backlash if the benefits wrought by autonomous vehicles are perceived to be unfair.

It will likely be too difficult for regulators to specify how these vehicles should react in every situation or even in many situations, he said.

What may be reasonable, he said, is for whoever sets the standards to insist that public safety will come first and vehicle manufacturers will be scrutinized to make sure their cars don't cause more deaths or injuries than usual or is to be expected.

Associated Graphic

How self-driving cars weigh the safety of pedestrians versus passengers has been an ongoing ethical debate in the industry.

FRED LUM/THE GLOBE AND MAIL

U.S. job growth slows, but wages rebound strongly
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By LUCIA MUTIKANI
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Reuters
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Saturday, January 7, 2017 – Print Edition, Page B2


WASHINGTON -- U.S. employment increased less than expected in December, but a rebound in wages pointed to sustained labour market momentum that sets up the economy for stronger growth and further interest rate increases from the Federal Reserve this year.

Non-farm payrolls rose by 156,000 jobs last month, the U.S. Labour Department said on Friday. The gains, however, are more than sufficient to absorb new entrants into the labour market.

Fed chair Janet Yellen has said the economy needs to create just fewer than 100,000 jobs a month to keep up with growth in the work-age population.

Employers hired 19,000 more workers than previously reported in October and November.

"Job creation and overall labour market conditions remain solid. With the potential for stronger fiscal stimulus in the form of infrastructure spending and tax cuts, job creation appears likely to remain on a solid footing in 2017," said Jim Baird, chief investment officer for Plante Moran Financial Advisors in Kalamazoo, Mich.

The economy created 2.16 million jobs in 2016. Average hourly earnings increased 10 cents (U.S.) or 0.4 per cent in December after slipping 0.1 per cent in November. That pushed the year-on-year increase in earnings to 2.9 per cent, the largest gain since June, 2009, from 2.5 per cent in November.

While the unemployment rate ticked up to 4.7 per cent from a nine-year low of 4.6 per cent in November, that was because more people entered the labour force, a sign of confidence in the labour market. Economists had forecast payrolls rising by 178,000 jobs last month.

The dollar rose against a basket of currencies, while prices for U.S. government bonds fell.

Other data on Friday showed the trade deficit widening 6.8 per cent to $45.2-billion in November as imports rose to their highest level in more than a year on higher oil prices.

The employment report added to data ranging from housing to manufacturing and auto sales in suggesting that president-elect Donald Trump is inheriting a strong economy from the Obama administration. The labour market momentum is likely to be sustained amid rising business and consumer confidence.

Mr. Trump, who takes over from President Barack Obama on Jan. 20, has pledged to increase spending on the country's aging infrastructure, cut taxes and relax regulations.

These measures are expected to boost growth this year.

But the proposed expansionary fiscal policy stance could increase the budget deficit. That, together with faster economic growth and a labour market that is expected to hit full employment this year, could raise concerns about the Fed falling behind the curve on interest rate increases. Last month's wage growth left it just shy of the 3.0 per cent to 3.5 per cent range that economists say is needed to lift inflation to the Fed's 2.0 per cent target.

"This is coming well before any fiscal stimulus hits. It plays to the idea that the Fed may already be behind the curve, not least because the impetus from lower oil prices has turned more inflationary as well," said Alan Ruskin, FX Research head at Deutsche Bank in New York.

The U.S. central bank raised its benchmark overnight interest rate last month by 25 basis points to a range of 0.50 per cent to 0.75 per cent. The Fed forecast three rate hikes this year.

A broad measure of unemployment that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment fell one-tenth to a more than 8-1/2-year low of 9.2 per cent.

Employment growth in 2016 averaged 180,000 jobs a month, down from an average gain of 229,000 a month in 2015. The slowdown in job growth is consistent with a labour market that is near full employment.

There has been an increase in employers saying they cannot find qualified workers.

"The pool is all but drained especially for skilled workers.

We can't bring factory jobs back because there's no one out there to run them," said Chris Rupkey, chief economist at MUFG Union Bank in New York.

The labour force participation rate, or the share of working-age Americans who are employed or at least looking for a job, rose one-tenth of percentage point to 62.7 per cent in December. The participation rate remains near multidecade lows.

December's job gains were broad, with manufacturing payrolls rising 17,000 after declining for four straight months. Construction payrolls fell 3,000 in December after three consecutive months of increases.

Retail sector employment rose 6,300 after increasing 19,500 in November.

Big banks to report modest gains in earnings
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By DAVID BERMAN
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Monday, November 28, 2016 – Print Edition, Page B1


Canadian bank stocks have posted double-digit-percentage gains so far this year, sidestepping threats arising from struggling energy companies, a weak Canadian economy and new rules imposed on the domestic housing market.

But how will banks fare in the coming year?

The country's six largest banks are set to report their fiscal fourth-quarter and year-end financial results starting Tuesday morning. Expectations are modest - analysts forecast profits will nudge just 2-per-cent higher from last year's fourth quarter.

Worries about the banks' loan books from earlier in the year appear to have abated. Oil prices have stabilized between $45 (U.S.) and $50 a barrel, easing concerns in previous quarters that the banks would stand to lose hundreds of millions of dollars in bad loans if energy companies defaulted - with losses potentially spiralling higher if the depressed energy sector spilled into the broader economy.

A modest number of energy companies have defaulted on their obligations and many have sold assets or raised equity in part to pay down debt. Analysts expect the banks will continue to set aside money to cover bad loans, but expect these provisions for credit losses (or PCL) to moderate.

"Notwithstanding a drop in oil prices from current levels, we believe we may have seen the peak in oil and gas PCLs," Darko Mihelic, an analyst at RBC Dominion Securities, said in a note.

At the same time, fears about banks being dragged down by any downturn in the housing market remain largely in check, even as Ottawa has taken steps to tighten regulations around lending. Canadian bank stocks have rallied in recent weeks despite sizable short positions by investors betting the banks will eventually be squeezed.

Some analysts expect the government measures will cool Canada's housing market, which has already seen slower sales in some regions, notably Vancouver.

The Toronto area, however, has continued to surge.

One of Ottawa's key proposals is to make lenders share the risks associated with mortgages by introducing a deductible on mortgage insurance. While that would increase the banks' exposure to housing-related losses, some argue there is a benefit for the banks in the long run as they compete against smaller, lessdiversified mortgage lenders.

"The creditworthiness of those large financial institutions with more diversified earnings profiles will hold up much better than smaller, monoline mortgage lenders," Peter Routledge, an analyst at National Bank Financial, said in a note.

Recent trends in interest rates have also helped bank stocks. Rising bond yields in the United States and Canada have steepened the yield curve - now that long-term bond yields have risen relative to the yields on short-term bonds - which should make loans more profitable and drive the banks' net interest margins (or NIM) higher.

"Though we have long held that 'seeing will be believing' with respect to NIM expansion for the banks, we certainly acknowledge that the curve steepening seen in the past two months is a positive step in this regard," Sumit Malhotra, an analyst at Bank of Nova Scotia, said in a note.

Mr. Malhotra looked at the reaction of Canadian bank stocks the last time bond yields took off, when the Federal Reserve announced three years ago that it would start winding down its bond-buying stimulus program known as quantitative easing.

He found that over the eightmonth period between May and December, 2013, when the yields on U.S. and Canadian 10-year bonds surged, bank stocks jumped 17 per cent on the promise of rising profits.

Mr. Malhotra noted that Canadian banks aren't as rate sensitive as, say, Canadian lifeinsurance companies and U.S. banks, but they clearly benefit.

"As such, the outlook for bank earnings power would improve if bond yields continue to increase," he said.

Still, analysts remain cautious about fourth-quarter results. The economy, after all, is barely growing, consumers are still indebted, and any substantial downturn in housing would hurt profits. But barring any major shocks on these fronts, analysts see gains ahead for the banks' bottom lines.

Some analysts expect profit growth among the big banks will accelerate to as much as 6 per cent in fiscal 2017, as the banks' recent cost-cutting efforts make them more efficient and the headwinds subside. If investors embraced these stocks during a difficult year, a good year should, at the very least, justify the rally in share prices.

Bank of Nova Scotia kicks off the reporting season for the big banks on Tuesday, followed by Royal Bank of Canada on Wednesday, Canadian Imperial Bank of Commerce and Toronto-Dominion Bank on Thursday and National Bank of Canada on Friday. Bank of Montreal concludes the season on Dec. 6.

Associated Graphic

THE GLOBE AND MAIL SOURCE: BLOOMBERG

Why we can't stop borrowing: stagnant wages
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By ROB CARRICK
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Monday, January 16, 2017 – Print Edition, Page B1


Canadians never look more financially irresponsible than they do in our most widely followed measure of national indebtedness.

Through successive years of slow economic growth, the debtto-disposable-income ratio has been stuck at or near record levels. At end of the third quarter of 2016, every dollar of take-home pay was matched by $1.67 in debt.

We Canadians just won't live within our means. What is up with us?

Partly, it's that interest rates are so low. Whether you're getting a mortgage, financing a car purchase or using a line of credit, rates today are very likely as cheap as we'll see in our lifetimes. But there's more to it than that. Incomes - stagnating incomes, that is - are also a big factor.

After-inflation earnings growth has been on a generally declining track since the last recession, but the downward momentum has picked up in the past couple of years.

According to the latest Statistics Canada numbers, 2016 was shaping up as a year in which inflation-adjusted earnings for salaried workers showed zero growth and were down 0.4 per cent for hourly workers.

"If wage growth slows, so does your purchasing power and so does the economy," said Armine Yalnizyan, senior economist at the Canadian Centre for Policy Alternatives. This is our strange economic reality today - people are taking on debt to make up for stagnant or declining purchasing power, but it's not enough to jolt the economy.

Growth is still on the weak side, December's strong job creation numbers notwithstanding.

Ms. Yalnizyan was one of the economists who contributed to a must-read collection of 75 economic charts that Maclean's compiled as a guide on what to watch in 2017. Her input was a chart showing the growth rate for the average hourly inflationadjusted earnings of salaried and hourly employees. The chart is headlined, "Canada just can't shake off the slowth," a term that means slow growth.

Unfortunately, the data in the chart may understate the problem of income stagnation. Ms. Yalnizyan said the average data are pulled higher by workers with incomes at the highest levels, and by the skew in our working population toward older workers at the peak of their career earning power.

Up until a couple of years ago, the longer-term average numbers were further supported by strong earnings growth in resource-based provinces, notably Alberta but also Saskatchewan and Newfoundland and Labrador. "If you take apart the numbers by province, you will see very clearly that [rising earnings] are a resource boomdriven phenomenon," Ms. Yalnizyan said.

There is some good news in the income numbers - Ms. Yalnizyan said young people between the ages of 15 and 24 have benefited from solid wage growth in recent years as a result of higher minimum wages in some provinces. But the bigger story is that both wages and wage growth in Canada are not delivering the lifestyle to which we aspire. Borrowing is how we make up the difference.

We should probably spend a little less to keep our borrowing more in line with our incomes.

But growth in household debt in the third quarter of last year was actually quite modest at 1.3 per cent. The debt-to-income ratio moved higher - to 166.9 per cent from 166.4 per cent in the second quarter - because disposable incomes rose a puny 1 per cent.

Higher incomes would help contain debt growth, but it's hard to be optimistic about pay hikes in today's slow-growth world. A report from CIBC World Markets late last year found that the quality of employment is falling, as judged by the proportion of part-time versus full-time jobs, selfemployment versus paid employment and the compensation of full-time jobs.

Even before these changes, Canada was a low-wage country.

Ms. Yalnizyan cited 2012 numbers from the Organization for Economic Co-operation and Development that showing that, among OECD member countries, Canada has had the fifth-highest proportion of low-wage workers (earning less than two-thirds the median income).

There are two ways for the cycle of debt rising faster than incomes to end. Either an economic shock terrorizes people into borrowing less, or we get to a point at which incomes rise faster than debt levels. The federal Liberals talk a lot about helping the middle class. We'll know they've accomplished something if wage increases once again give us an advantage over inflation.

Follow me on Twitter: @rcarrick

Associated Graphic

THE GLOBE AND MAIL, SOURCE:ARMINE, CANADIAN CENTRE FOR POLICY ALTERNATIVES

Bad bank behaviour? Try the competition
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By ROB CARRICK
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Monday, January 9, 2017 – Print Edition, Page B1


Make it a goal in 2017 to try one new financial product from a company not associated with one of the big banks.

Try an alternative bank offering comparatively high interest rates on savings, or a credit union. Try a robo-adviser, where your investment portfolio is managed for you online at low cost. Try an independent financial-advice firm, or one of the non-bank online brokerage firms that scored well in my recent broker ranking.

Big banks are among this country's strongest corporations, and they have some good people working for them in branches and head office. But the need to produce ever large profits warps banks. This was sadly apparent in 2016, a year in which four banks and their investment arms reached deals with securities regulators in which they agreed to repay a total of about $150-million in overcharged fees. The banks are Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and HSBC.

Toronto-Dominion Bank agreed to repay $13.5-million back in 2014.

Here's the basic storyline: Banks overcharge clients holding mutual funds or investment accounts at one or another of its various divisions. Top people at the bank eventually notice what's happening, bring it to the attention of regulators and reach an agreement to compensate clients. The deal typically includes some money being paid toward investor education and protection, and to cover the cost of the regulator's investigation. Also, new controls are put into place to prevent a recurrence.

It's hard to understand how banks came to be taking millions of dollars in fees they were not entitled to from customers. Did bank employees program their computer systems to overcharge?

Did the overcharging result from neglectful supervision of whether clients were paying appropriate fees, or receiving any discounts they might be entitled to?

Whether the issue is one of commission or omission on the banks' part, the message sent is that banks have trouble restraining themselves from exploiting customers. So, what do you do about it?

Life is busy and changing banks is a huge hassle. So don't.

Instead, choose one product you use at your bank and find a better replacement somewhere else.

If you want better behaviour from banks, reward competitors offering a better deal with your business.

A way to start is by setting up an account at a robo-adviser. Do you have a tax-free savings account or registered retirement savings plan at a bank or one of its affiliates that is languishing in expensive mutual funds or, worse, sitting in cash and earning little or nothing?

A robo-adviser will build and run a personalized, low-cost portfolio for you with a level of transparency that should provide assurances you won't be unwittingly overcharged. We have an account at one robo-firm at our house, and the dollar amount of fees paid each month is clearly disclosed. It's easy to track whether the right amount is being charged.

The objection people always raise about dealing with nonbank financial firms is safety. The risk of a big bank going under is slight, maybe even non-existent.

Can we say the same about the competition?

No, but your money is still protected. Many online banks are members of Canada Deposit Insurance Corp., which offers up to $100,000 in coverage per depositor and per insured category, while credit unions have their own deposit insurance plans. Independent online brokers are members of the Canada Investor Protection Fund, and robo-advisers use brokers that are part of CIPF to hold client assets. CIPF protects up to $1-million in assets against broker insolvency.

Big banks have ubiquity as well as solidity going for them. You can find their branches in most cities and towns across the country, and that provides a sense of continuity and comfort. Problem is, you can't reach your financial goals with continuity and comfort. You need savings accounts with interest rates that at least keep up with inflation, and investment accounts that use a sound, fee-sensitive approach.

Experiment this year by trying something from a financial company that isn't a big bank. If a sense of loyalty is holding you back, remember the overcharging stories of 2016.

Associated Graphic

A robo-adviser will build and run a personalized, low-cost portfolio for you with a level of transparency that should provide assurances you won't be unwittingly overcharged.

MARK BLINCH, REUTERS

NAFTA repeal would gut U.S. auto jobs, think tank says
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By GREG KEENAN
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Thursday, January 12, 2017 – Print Edition, Page B1


Pulling the United States out of the North American free-trade agreement will lead to cuts in automotive jobs for Americans, a respected auto-industry think tank said Wednesday as president-elect Donald Trump claimed successes in persuading car companies to shift investments out of Mexico.

The end of NAFTA would eliminate at least 31,000 jobs in the U.S. auto-parts industry, "counter to the incoming Trump administration's goal of creating manufacturing jobs," the Centre for Automotive Research (CAR), based in Ann Arbor, Mich., said in a study.

The study was released hours after Mr. Trump warned again at a news conference Wednesday that he is targeting imports from Mexico. He also praised Fiat Chrysler Automobiles NV for investing $1-billion (U.S.) in two U.S. plants and urged General Motors Co. to heed his tweeted warning last week that it will face "big taxes" if it continues to import a small number of Chevrolet Cruze models from Mexico.

About 436,000 Americans work on the factory floors of autoparts makers, and a U.S. withdrawal would also affect whitecollar jobs and employment at other manufacturing companies such as steel mills and tool and die makers, said Kristin Dziczek, one of the authors of the study.

"Any move by the United States to withdraw from NAFTA or to otherwise restrict automotive vehicle, parts and components trade within North America will result in higher costs to producers, lower returns for investors, fewer choices for consumers, and a less competitive U.S. automotive and supplier industry," the study said.

The study pointed out that the United States benefits from Canada's participation in NAFTA.

"While it is a well-publicized fact that Mexico's domestic consumption is less than 20 per cent of the vehicles it manufactures, Mexico is not North America's only export powerhouse," the study said.

"Canada is even more dependent on exporting outside its own borders, with domestic consumption of just 12 per cent of the vehicles it manufactures within its borders."

Canada runs a big trade deficit in auto parts with the United States because more than 50 per cent of the value of the parts in Canadian-made vehicles is produced by U.S. suppliers.

Mr. Trump's tweets and the threat to NAFTA have dominated discussion in the auto industry all week as auto makers and government officials gathered for the North American International Auto Show in Detroit, the Automotive News World Congress and the Deutsche Bank annual auto-industry investor conference, both also in Detroit.

The chief executive officers of Canada's two largest parts companies made appearances at those events on Wednesday and warned of the disruption that would be caused by ripping up the NAFTA deal.

Linda Hasenfratz, president of Linamar Corp. said taxing products that cross the borders seven times in one form or another would lead to price increases that consumers would not pay.

"It would add enormous cost that no one can bear," Ms. Hasenfratz was quoted by Automotive News as saying.

Auto and parts companies that manufacture in North America need a low-cost location for some of their work to compete with Asia-based companies, Don Walker, CEO of Magna International Inc. said at the investor conference.

Mr. Trump has threatened to slap tariffs of 35 per cent on Mexican-made vehicles entering the United States.

He has also called out Ford Motor Co. and Toyota Motor Corp. for announcing plans to increase vehicle production in Mexico.

Ford, which was targeted during the presidential campaign, announced last week that it has scrapped plans to build a $1.6billion (U.S.) plant in Mexico, but said the decision is related to falling demand for the compact cars it was planning to assemble.

The tariffs Mr. Trump has threatened would have a significant impact on the prices consumers pay and on an industry that has restructured itself to reflect tariff-free import and export of vehicles and the parts that go in them.

"You would not have to have anywhere near a 35-per-cent tariff to take away the cost advantage of Mexico versus the United States," Bob Shanks, Ford's chief financial officer told a small group of reporters at a dinner in Detroit earlier this week at the North American International Auto Show. "Not even close."

Mr. Shanks would not reveal the number, but acknowledged that a tariff of less than 10 per cent would wipe out Mexico's advantage.

HBC lowers outlook again after disappointing holiday sales, shares tumble
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By MARINA STRAUSS
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Wednesday, January 11, 2017 – Print Edition, Page B1


Challenges are mounting at department-store retailer Hudson's Bay Co. amid a disappointing holiday season as it lowered its full-year outlook for a second time, prompting its shares to plummet to new lows.

HBC, which owns its namesake and luxury chain Saks Fifth Avenue, faces intensifying competition by both online and bricksand-mortar players in Canada, leading one industry observer to suggest HBC's best days are behind it.

"It's one thing strategically to fight against a major competitor," said Randy Harris, president of market researcher Trendex North America. "But the problem with the Bay in Canada is that they're being nibbled to death.

It's death by a thousand cuts."

HBC is feeling the pain of its expansion in Europe, where it has been hurt by terrorism attacks and shifting currencies, and the United States, where the luxury market has suffered while e-commerce titan Amazon.com Inc. increasingly puts pressure on the retailer by touting more fashion offerings.

HBC investors are getting impatient. Its shares fell almost 13 per cent to $10.16 on Tuesday, its lowest closing since it went public again more than four years ago on the Toronto Stock Exchange.

Late Monday, Toronto-based HBC said its fourth-quarter samestore sales at stores open a year or more dropped 0.7 per cent on a constant currency basis in the nine-week holiday selling period ended Dec. 31.

It forecast 2016 sales of $14.4billion to $14.6-billion compared with its reduced guidance of $14.5-billion to $14.9-billion in November. And it forecast adjusted earnings before interest, taxes, depreciation and amortization of $615-million to $665-million, compared with $700-million to $785-million previously.

"Our holiday sales trend improved considerably from what we experienced in the third quarter," Jerry Storch, HBC's chief executive officer, said in a statement. "However, the sales improvement that we experienced was not strong enough to achieve the results we had expected."

He pointed to a "challenging" retail environment south of the border and in Europe and significant discounting during the holiday period, which pinched HBC's profit margins.

"The retail environment is clearly changing, and we continue to work diligently across all our banners to adapt rapidly," Mr. Storch said.

Late last year, HBC launched an in-depth review of its operations to find cost savings and productivity improvements.

Still, HBC fared better in Canada than its other markets. Its department-store group, which includes its Canadian banners, enjoyed a 1.2-per-cent increase in fourthquarter same-store sales, while its other divisions saw declines in that important measure. In Canada, HBC faces more competition from U.S.-based Nordstrom Inc., discount players such as TJX Cos., which owns Winners and Marshalls, and low-cost fast-fashion chains, including H&M.

Sabahat Khan, an analyst at RBC Dominion Securities, said his outlook on HBC shares would improve if the retail backdrop were more favourable and the company had less debt. He reduced his rating on HBC shares to "sector perform" (a recommendation to hold shares) from "outperform" (or buy shares) previously, while lowering his stock price target to $12 from $18.

TD Securities analyst Brian Morrison also downgraded HBC's rating to "hold" from "buy" and cut his target price to $13 from $26.

Mr. Khan said it is possible HBC will launch an initial public offering of its HBS Global Properties joint venture, which could serve as a potential catalyst for the share price. However, HBC would likely need to add non-HBC properties to the joint venture to enhance its appeal. As well, an IPO "could become increasingly difficult to execute if the operating environment for department stores becomes increasingly difficult over time."

Other retailers have reported disappointing holiday business.

Ascena Retail Group Inc., owner of the Ann Taylor women's apparel chain, cut its outlook after slow customer traffic forced the company to step up discounts. "We are positioning our full-year outlook assuming that the trend we experienced through holiday continues," Ascena CEO David Jaffe said in a statement Tuesday.

Last week, Macy's Inc., Kohl's Corp. and J.C. Penney Co. reported sluggish holiday sales. Neiman Marcus Group abandoned its plans to go public.

Hudson's Bay (HBC)

Close: $10.16, down $1.50

U.S. stocks in holding pattern awaiting Trump
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By IAN MCGUGAN
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Friday, January 13, 2017 – Print Edition, Page B1


U.S. stocks, which rocketed higher on news of Donald Trump's election, are no longer sure what to make of Trumponomics.

The S&P 500, the usual benchmark for large U.S. stocks, has largely flat-lined since midDecember as investors display growing concern about what the U.S. president-elect will unveil once in power. With a week to go until Mr. Trump's inauguration on Jan. 20, it's not yet clear whether the pro-growth leader that many people had imagined will be the leader they actually get. For instance, Mr. Trump has been widely applauded by Wall Street for his eagerness to get government out of the marketplace.

He has vowed to tear up overly restrictive regulations in the financial sector and abolish Obamacare. But at his first news conference in six months on Wednesday, he ladled abuse on the drug industry, which he claimed has been "getting away with murder" on pricing.

Biotech and pharmaceutical stocks plunged in response, as investors mulled the possibility that parts of the U.S. health-care industry may face more regulation, not less.

The sector recovered some of its losses on Thursday, but the whipsawing prices demonstrated the nerves that many investors are feeling as they try to decode Mr. Trump's wandering statements.

Wall Street is particularly uncertain about what lies ahead for the new president's freespending pledges.

Both the U.S. dollar and stocks surged after the presidential vote on Nov. 8 because investors figured a Trump administration would unleash a wave of fiscal stimulus in the form of tax cuts and infrastructure spending.

However, Mr. Trump provided no timetable on those proposals during Wednesday's news conference.

Meanwhile, the case against more fiscal stimulus is gaining strength as unemployment dwindles in the United States.

Joblessness now hovers around 4.7 per cent, close to what most economists consider full employment.

Pouring more fiscal stimulus into an economy where just about everybody already has a job would probably result in rising inflation, everything else being equal.

To forestall that, the U.S. Federal Reserve may choose to hike interest rates aggresively, thereby offsetting much of the upward jolt that markets are expecting from a free-spending Trump presidency.

"I would expect [Fed chair Janet Yellen] to crash the inauguration party next Friday by repeating warnings about applying large fiscal stimulus to an economy that is already at or near full employment," Derek Holt, head of capital markets economics at Bank of Nova Scotia, said in a note Thursday.

Among other major wild cards for investors is tax reform. The head of Mr. Trump's inaugural committee has said the president-elect supports an overhaul of the tax system that would punish U.S. companies that import goods and reward businesses that export.

Such a border tax adjustment would hurt U.S. retailers and other companies that import a large portion of their merchandise.

It would also mean pain for Canadian exporters, according to Krishen Rangasamy of National Bank, who calculates that a border tax could chop 9 per cent off Canada's total goods exports to the United States.

Supporters of the border tax argue that it will boost the value of the U.S. dollar and thereby offset any higher costs to U.S. companies from the adjustment.

For now, however, speculation about the tax adds to the cloud of uncertainty around the new administration.

"In politically driven markets, the combination of an erratic [president-elect of the United States] and a market which leaps to conclusions and heads off down cul-de-sacs with manic enthusiasm, is a recipe for mayhem and anarchy," said Kit Juckes, macro strategist at Société Générale.

To be sure, some observers say the Trump rally is still alive and well.

"While I wouldn't be surprised or upset with a correction, I still believe there is still further upside in the stock market," said Norman Levine, senior portfolio manager with Portfolio Management Corp. in Toronto.

He believes the Federal Reserve will be slow to raise interest rates and argues that now is a good time to buy U.S. drug companies, because they are out of favour.

Wall Street worry: the case against U.S. stocks
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By IAN MCGUGAN
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Tuesday, January 10, 2017 – Print Edition, Page B1


Donald Trump and his followers insist the rest of the world is taking advantage of the poor, beleaguered United States.

Oddly enough, financial markets indicate just the opposite. In fact, U.S. stocks have thrashed their global counterparts for seven years in a row.

Some investors may want to bet on that long streak of U.S. victories continuing. However, if you believe in mean reversion - the idea that a burst of unusually good performance is nearly always followed by a string of weaker results - it's time to start worrying about the outlook for Wall Street over the next couple of years.

History demonstrates that stock markets in one country don't outpace equities in other regions forever. A long patch of strong results inflates stock prices and exchange rates to the point when a bout of relative weakness becomes just about inevitable.

Based on that logic, investors should look to Canada, Europe, Asia and other parts of the world for superior returns over the next few years. Stocks in those regions aren't screaming bargains, but they seem better positioned to produce gains than their U.S. counterparts, which have enjoyed extraordinarily good results over the past seven years.

Wall Street's outperformance during that period has left rivals in the dust.

A lucky person who bought into the S&P 500 index of bluechip U.S. stocks on Jan. 1, 2010, and faithfully re-invested her dividends would be sitting on total gains of 132 per cent by the start of this year.

In comparison, a similar investor who poured his money into a fund that tracked global stock markets except for the United States would be up barely 24 per cent after seven years of patient investing.

The muscular performance of U.S. stocks during most of the Obama administration doesn't fit easily with Mr. Trump's wellknown chorus of complaints.

During the campaign, he charged that Mexican manufacturers, Chinese currency manipulators and European deadbeats have all been exploiting U.S. generosity and playing Washington for suckers.

Maybe so, but from the viewpoint of U.S. stock investors the past few years have been one long ode to joy.

The problem now is that years of strong gains have boosted stock market valuations to exuberant levels, while the growing strength of the greenback has made U.S. exports more and more expensive on global markets. Both factors are likely to crimp future profits.

Large U.S. stocks will produce real returns of less than 1 per cent a year over the next decade, according to Research Affiliates, a widely followed market intelligence firm based in Newport Beach, Calif. It predicts that small U.S. stocks will actually lose value over that stretch.

Foreign stocks are positioned to do much better, Research Affiliates says. European, Asian and Australian stocks should generate returns of nearly 6 per cent a year during the 10 years, and emerging market stocks should produce 7.5 per cent annual returns.

Some market observers believe a change in relative performance is already at hand.

"We forecast that the stock market will perform better in Germany than in the U.S. this year, as the euro falls below parity against the dollar," John Higgins of Capital Economics wrote in a report on Monday.

Pavilion Global Markets, a Montreal-based research firm, also suggested that investors in the United States should proceed with caution. On Monday, it told investors dazzled by Trumponomics to "trade the hype, but don't believe it."

"The president-elect's tax plan will do little to boost growth and will largely benefit high earners, crimping consumption and dramatically eroding fiscal balances," the Pavilion analysts wrote.

Among the wild cards is the possibility that the presidentelect will back an overhaul of the corporate tax system that will be largely based on where products are sourced and sold.

Such a system, which would punish importers and reward exporters, has the power to be enormously disruptive. "The tax change will capriciously redistribute income, increase uncertainty and place punitive burdens on some sectors," warned Larry Summers, a former U.S. Treasury Secretary.

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THE GLOBE AND MAIL, SOURCE: BLOOMBERG

Is Burns the NHL's most valuable player?
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The San Jose stalwart leads all defencemen in goals and points at the season's halfway point
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By ERIC DUHATSCHEK
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Saturday, January 14, 2017 – Print Edition, Page S5


CALGARY -- Joe Thornton was making a stump speech on behalf of his San Jose Sharks' teammate Brent Burns, the mid-season favourite to win the NHL's Norris Trophy as the league's top defenceman.

But Thornton wasn't just talking Norris. He was pitching Burns for MVP - and making a good case for his bearded, tattooed friend, who is in the midst of an exceptional breakout season.

"With the amount of minutes he plays and the way our offence goes around him, he isn't just the best defenceman in the game, he's the most dominant player," Thornton said.

Thornton raises an interesting point, if only because, historically, defencemen have rarely factored into discussion about the Hart Trophy, awarded annually to the NHL's most valuable player.

The last defenceman to win the Hart was Chris Pronger in 2000.

Before that, it was Bobby Orr in 1972.

Even Nicklas Lidstrom, a seventime Norris Trophy winner and the dominant defenceman of his generation, never finished either first or second in the final Hart balloting. Hall-of-famer Ray Bourque was twice a runner-up - the closest anyone else has come in almost 40 years - but usually, voters opt for forwards or goaltenders when casting their Hart ballots.

So here we are, just past the midpoint of the 2016-17 season and while there have been a number of excellent individual performances, no clear-cut MVP candidate has emerged. A convincing argument can be made for everyone from Edmonton's Connor McDavid and Pittsburgh's Sidney Crosby to Columbus's Sergei Bobrovsky and Minnesota's Devan Dubnyk.

But do any of them mean more to their team's success than Burns does to San Jose's?

Entering Friday's games, Burns was leading all NHL defencemen in points (44) and in goals (17), well ahead of the competition.

With nine points in his past four games, he's also edged into fifth place in the overall league scoring race and is just a single point out of second.

Last week, Burns was chosen to play in the NHL's all-star game for the fourth time. The 20th overall pick in the 2003 entry draft, with the full beard, all the tattoos, someone mostly known for the menagerie of reptiles in his personal zoo, is finally drawing attention for more than the quirkiness of his looks, or personality, or hobbies. It's for what he's accomplishing on the ice.

"He's different, like something you've never seen before," Thornton said, "but he's also the hardest player in the league to play against. You don't want to play against him in practice because he's so big and strong. He's intimidating. He's one of the best skaters in the league. He has one of the best shots in the league.

He really has everything you want in your franchise player."

The Sharks unexpectedly advanced to the Stanley Cup final last spring, losing to Pittsburgh, and are having a better regular season now than a year ago. They are second in a closely contested Pacific Division, and have been transitioning to a younger team, while still getting contributions from the likes of Thornton and Patrick Marleau.

What's all the more remarkable about Burns's development into an elite defenceman is that it wasn't so long ago (March of 2013) that the Sharks converted Burns to forward because they felt it was too risky to play him on defence. San Jose's coach at the time was Todd McLellan, who'd previously coached Burns in Houston (AHL), where he was frequently deployed up front early in his career. Burns fit the prototype of the power forward, and three years ago, San Jose was desperately searching for extra scoring and muscle up front. Burns played the 2013-14 season on the wing, mostly alongside Thornton, and then was permanently shifted back to defence the following year.

Even now, Burns plays something of a rambling-gambling style, but the risk-to-reward ratio has been so positive for the Sharks, that they don't want to pull the reins in on him, for fear of undermining the catalyst he's become to their offensive game.

Burns is 31. Few players in NHL history have made such a demonstrative improvement in their games at so late an age. But according to Thornton, it took time for Burns to get comfortable playing in his own end and once that happened, it made him a more complete player.

"Maybe his confidence was a little off in the past," he said. "I think everything came from improved confidence."

Soon after Peter DeBoer took over as the Sharks' coach in May of 2015, San Jose signed defenceman Paul Martin, who'd previously played for DeBoer in New Jersey, primarily to play as Burns's partner in five-on-five situations. To DeBoer, Martin has provided the sort of defensive stability in the pairing that permits Burns to freewheel. They are a good match, one of those rare times that a plan mapped out on paper actually translated perfectly well onto the ice.

Now in his ninth NHL season, DeBoer also spent 15 years coaching in the OHL, which is where he first crossed paths with Burns.

Coaching someone such as Burns, the last of the NHL's rugged individualists, has been no issue for DeBoer.

"The beauty of our group is, it's a loose group that likes to have fun, that enjoys the game, but also knows that when the puck drops, it's time to compete," DeBoer said. "That starts with Thornton, [Joe] Pavelski, [MarcÉdouard] Vlasic, all those guys. I think because the group accepts him and has accepted him so much, it's easy on the coaches.

For me, when the puck drops, I know what I'm getting from them. What their hair looks like, or their beards, or whether they shower that day or get a new tattoo, I could care less." Slowly, the recognition for Burns's playing ability is starting to build. Thornton, who won the league MVP award in 2006, does not believe there is a voting bias against players in the Pacific Time zone, but says people need to see Burns in person to appreciate how good he is.

"A lot of people don't see him first hand until he comes to their city and then they see this guy and they're like 'wow.' He is that good. He is that dominant. And I think you're finally seeing a breakthrough now. Last year, he was nominated for the Norris, and this year, he's obviously getting some recognition, which has been deserved for the last two years," Thornton said.

"Sure, he doesn't fit into the box of what an NHL player should be. But I like it. I like hanging with him. He's not like the rest of your buddies. He's off the wall - and I appreciate that.

Personally, I think it's refreshing.

I don't know about everybody else, but he's different - and definitely a lot of fun to be around."

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Brent Burns, 88, was playing forward for the Sharks just three seasons ago, and has easily made the switch back to defence.

CHRISTIAN PETERSEN/GETTY IMAGES

Whispers of match fixing re-emerge ahead of Grand Slam
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By JUSTIN BERGMAN
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The Associated Press
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Friday, January 13, 2017 – Print Edition, Page S2


For Rafael Nadal and the other stars of tennis, there's a familiar ring to the questions being raised as the first ball is about to be struck at the Australian Open.

Recent match-fixing sanctions and a new case are bringing fresh scrutiny to the integrity of the sport a year after corruption allegations cast a pall over the first Grand Slam of the year.

"[It's] obviously negative, always in the first month of the season, [it] starts to happen," Nadal said at the season-opening Brisbane International. "You get tired about this kind of stuff, but the most important thing is [to] fight against these kinds of things."

The headlines started appearing early in the new year.

On Jan. 5, police in Australia charged an 18-year-old player with a match-fixing offence at a lower-tier tournament last October in Traralgon, near Melbourne.

Days later, another Australian player, Nick Lindahl, now retired but once ranked in the top 200, was handed a seven-year ban and $35,000 fine from the Tennis Integrity Unit (TIU) for offering to throw a match at a minor tournament in the city of Toowoomba in 2013.

Lindahl had already been fined after a criminal trial. Two other Australian players received lesser punishments in connection with the incident.

While Traralgon and Toowoomba are far removed from the glittering lights of Melbourne Park, the timing of the developments was troubling nonetheless.

Last season began similarly beneath a cloud of suspicion, after a report by BBC and BuzzFeed alleged that tennis authorities had suppressed evidence of matchfixing and failed to investigate possible cases of corruption. The reports went over old ground, but the timing and the headlines overshadowed the tournament.

"I haven't heard anything [about match-fixing] since last year's Australian Open," German player Mischa Zverev told the Associated Press last week in Brisbane. "I think it was funny timing. ... Like the day before the Oscars, they're going to bring something up to make somebody not win it, or win it."

Since then, tennis leaders have gone into overdrive to restore confidence in the sport. An independent panel was created to review the TIU, the internal body tasked with combatting corruption, and authorities promised to implement all of its recommendations when its work is completed this spring. The TIU also took separate steps to strengthen its monitoring and investigation efforts, develop new anti-corruption-education programs for players and improve the transparency of its operations.

In an e-mail statement, the agency said nine players and officials were sanctioned last year for match-fixing - the most for a single year since the unit was established in 2008. Several were banned for life, including a young South African player and four officials from Turkey and Uzbekistan.

The unit also expanded its outreach efforts with betting operators and regulators, leading to increased reporting of suspicious wagers.

In 2016, the TIU received 292 betting alerts - an 18-per-cent increase over the previous year.

The vast majority of those came from the Challenger and Futures circuits on the men's tour, considered the most at-risk for match-fixing given the lower likelihood of detection and the smaller earnings of the players.

However, the TIU said three alerts were generated at Grand Slam events, as well.

The agency was quick to note, though, that an alert isn't necessarily proof of match-fixing. Of the more than 114,000 matches played last year on the professional tours, only 0.2 per cent triggered a suspicious betting alert.

"Tennis was one of the first major sports to recognize the potential threat of betting-related corruption and do something about it," the TIU said. "It will be for the independent-review panel to take a view on the conduct and effectiveness of the unit and to put forward recommendations to improve the current structure and approach."

Whatever the investigators recommend, the fact remains the TIU faces an uphill battle.

Technology has shifted the gambling landscape in such a way, it's increasingly difficult for monitors to keep up. In tennis, wagers aren't just placed on who wins or loses; bets can be placed during matches in real time on everything from total points won in a game to whether a set goes to a tiebreak.

"We're talking individual player activities here," said Hans Westerbeek, dean of the College of Sport and Exercise Science at Victoria University in Melbourne.

"It's much easier to get into a situation where you approach individual players to do things that can be, if done well, quite well hidden from it being suspicious."

He likens it to the ongoing battle against performance-enhancing drugs. "You're always struggling to keep up with the innovations that a betterresourced front of gambling operators, legal or illegal, will have available to advance their technology."

Ryan Rodenberg, an associate professor of forensic sports-law analytics at Florida State University, says this is one reason a more sophisticated approach is critically needed. He recommends an internal-monitoring system that analyzes each match for suspicious activity in real time, rather than relying solely on betting alerts.

"A robust betting data-monitoring operation would have both in-house capabilities and a number of collaborative informationsharing agreements with third parties such as sports-books, private monitoring firms or academics," he said. "Anything less is suboptimal."

With a limited budget of just $3.23-million (U.S.) for 2017, however, there is only so much the TIU can do.

As such, preventative measures such as education have become a priority. More than 25,000 players and officials have completed the TIU's online anti-corruptiontraining program, and a new version will be launched that players will be required to complete every two years.

"Educating players who are upand-coming and those who support those players is a very good, positive and necessary thing to do," Westerbeek says. "Because the root of the problem is ... people not really [understanding] they're engaging in criminal activity."

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Rafael Nadal of Spain serves during a practice session in Melbourne, Australia, on Thursday. Nadal will be competing with many of the sport's other top athletes in this year's Australian Open.

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Leafs get a break from playoff madness
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This year is all about young team's steady development, not geared to a postseason push, and fans need to accept that
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By DAVID SHOALTS
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Monday, January 9, 2017 – Print Edition, Page S2


TORONTO -- The Toronto Maple Leafs' loss to the Montreal Canadiens and their five-day break arrived at just the right time.

And it's not because the Leafs get to escape to somewhere warm just as the coldest stretch of the winter arrived.

No, the 5-3 loss on Saturday night and the break, which ends with Friday's game in New York against the Rangers, means Leaf fans can take a deep breath and then try to banish all those thoughts of the NHL playoffs from their heads.

The postseason madness was getting out of hand after the Leafs beat the New Jersey Devils last Friday and briefly moved into a playoff position, third in the Atlantic Division. However, a game against one of the NHL's best teams, in which the Leafs were never in a serious position to beat the Canadiens, plus the existing evidence, shows the most likely outcome is that the Leafs will flirt with a playoff spot until late March and then fade when everyone gets serious about playing defence.

The Leafs are probably the most exciting young team to watch in the NHL. They're the closest thing the NHL has to Team North America, the 23-and-under World Cup of Hockey fan favourite. But they still have too many holes in their game and their roster to be considered a bona fide playoff team even if their rebuilding plan is ahead of schedule as the halfway mark of the season approaches.

This is not to say the Leafs will definitely miss the playoffs, since they are fortunate enough to play in a mediocre division. The thirdplace finisher in the Atlantic, which is guaranteed a playoff spot, could well have fewer points than the No. 2 wild-card team.

The Leafs are in the easy phase of an improving team's jump up the standings, the big one that signals a team is no longer a punching bag. At this point, the Leafs could finish with 93 points, a 24-point improvement from 2015-16. Those leaps in the standing usually result in coach-of-theyear awards.

However, it is the next improvement that is the tough one, going from making the playoffs to legitimate contender for the Stanley Cup. The Leafs are still a few years away from that and, fortunately for them, management is well aware of that.

Both Leafs president Brendan Shanahan and head coach Mike Babcock have said recently there will be no veering from the slowbut-sure development plan.

"We're finding players every day as we watch them grow, and we have aspirations to be a really good team in the National Hockey League. One that in the summer you know you're going to make the playoffs," Babcock said after the Leafs beat the Detroit Red Wings in the New Year's Day outdoor game. "That's not where we're at right now, but we're a work in progress. We like the direction we're going."

Most of the signs the Leafs are not there yet come in the third period. Their penchant for blowing third-period leads is well-documented. They are also not much for comebacks, as their record when behind at the start of the third period is 2-11-1.

The good news is that these are common traits of young teams.

They are generally weaker defensively, so third-period leads can disappear when the opposition turns up the heat. While the Leafs were seventh in goals-scored in the NHL before Sunday's games with 120, they were 19th in goalsagainst with 116. So the kids on the forward lines still have a few things to learn, the defence needs an upgrade in personnel and a reliable backup goaltender would be nice.

Frederik Andersen was in goal for both of the back-to-back, home-and-away games against New Jersey and Montreal. He is on target to play nearly 70 games, an astounding workload considering this is his first season as a No. 1 goalie. He showed signs of wear in the loss to Montreal.

"Obviously I didn't make the right decision there," Babcock said of playing Andersen. "In saying that, the last time we did it we thought it was the right decision.

This time it wasn't the right decision."

The best thing about Shanahan and Babcock insisting they will stick to the plan is that Shanahan and general manager Lou Lamoriello will likely resist jumping into the trade market for a defenceman before the Feb. 28 trade deadline. This will not do anything for the Leafs' playoff chances but in the long term it's a no-brainer.

Even decent defencemen nowadays are expensive. When the Edmonton Oilers finally decided to do something about their defence and traded for Adam Larsson, a young and good-butnot-great defenceman, it cost them Taylor Hall, one of the most dynamic young forwards in the league.

Since the Leafs are still a year, and more likely two years, away from being a sure bet for the playoffs, it makes no sense to trade away someone such as James van Riemsdyk or even William Nylander right now for one piece of the puzzle. At the same time, Babcock is starting to use his players with an eye on winning as well as putting star rookies such as Auston Matthews and Mitch Marner in learning situations. This is paying off with some unexpected success but it is also paying other dividends.

By slowly combining the two approaches, Leafs management is avoiding the trap of sticking young players in a losing environment longer than is healthy for them. Look no further than the Colorado Avalanche or the Oilers for what happens when top draft picks get stuck in a losing culture.

The Avalanche are a mess and the Oilers took way too long to become a playoff contender, requiring a management housecleaning to do so.

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Zach Hyman, crashing the Montreal net in Saturday's 5-3 loss, is one of the young Leafs showing real promise this year.

NATHAN DENETTE/THE CANADIAN PRESS

Toronto holds off surging Celtics
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By ROBERT MACLEOD
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Wednesday, January 11, 2017 – Print Edition, Page S2


TORONTO -- The Toronto Raptors had lost two in a row in rather ugly fashion, with the prospect of three straight a distinct possibility as the charging Boston Celtics pulled into the Air Canada Centre on a wintery Tuesday night.

Boston has been peering at Toronto's back all season in the standings and, predictably, was growing rather tired of the view.

A four-game winning streak, along with the continued inspired play of point guard Isaiah Thomas, had pulled the Celtics to within one game of the Raptors' hold of first place in the Atlantic Division of the Eastern Conference.

What would normally constitute a throw-away contest in the midst of a long season suddenly had some jam for two teams not yet ready to cede ownership of the East to the Cleveland Cavaliers.

"We've had two losses, which is not a reason to panic," Toronto coach Dwane Casey said before the game. "But just the way we lost. So everything goes all into the mix.

"Our focus, our energy, our toughness - whatever the adjectives you want to use has to be in play."

The Raptors (25-13) needed all that and then some, overcoming a 16-point disadvantage in the third quarter to register an enthralling 114-106 victory and maintain the Celtics' (23-15) second-banana status in the division, at least for the time being.

Trailing 84-80 heading into the fourth quarter, the Raptors staged a furious rally that lifted the capacity crowd time and time again from their seats in delirious ecstasy.

The comeback started in earnest when Kyle Lowry launched a three from well beyond the arch while falling flat on his back in the process. The ball swished through the hoop, and the crowd cheered lustily as Toronto moved ahead 104-102 with less than three minutes left.

Boston would come back to tie on a Thomas layup, but the Raptors took over after that, with two free throws by Jonas Valanciunas giving Toronto the lead for good at 106-104 with about two minutes left.

A DeMar DeRozan field goal, a turn-around jumper from 16 feet, followed up by a nice reverse layup with about a minute to go would ice the game.

DeRozan would finish with 41 points on the game to go with 13 rebounds. Lowry would finish with 24 points and nine assists.

Thomas would lead the Celtics with 27 points.

Although a game against the Celtics these days is anything but a soft touch, Tuesday's game did offer a bit of schedule relief for the Raptors as it represented just the second time they have played consecutive games at home in more than a month.

The Raptors were wearing their retro Toronto Huskies uniform for the event.

Toronto came into the game eager to move on from an unsightly two-game losing skid, coughing up big leads to both the Chicago Bulls and Houston Rockets in back-to-back outings over the weekend.

It has been more than a calendar year since Toronto last dropped three in a row.

Boston's rise in the East as a powerhouse can be tied to the continuing prowess of Thomas, their diminutive point guard who has developed into one of the NBA's most dynamic performers.

Thomas came into the Toronto game averaging 28 points an outing, saving his best for last.

His average of 9.5 points in the fourth quarter of games leads all Eastern Conference players.

Taken all together it is quite the rags-to-riches story for Thomas, who was the last player selected in the 2011 NBA draft.

"You're high beams better be on when you go in the fourth quarter against Thomas," Casey said. "He's an example of what this league should be about - a kid drafted, what, 60th, back was against the wall his whole career.

"Now look at him. He's one of the best players in the league."

One game back after missing four with a left knee strain, Casey elected to give Patrick Patterson his first start at forward this season, hoping his length and athleticism would help slow the Celtics.

It was a cold start for both offences, with the Raptors managing to secure a 23-18 lead in the first quarter off 9-of-24 (37.5 per cent) shooting. The Celtics only hit on 8 of 22 (36.4).

The pace picked up in the second quarter, Thomas in particular fearlessly weaving his way toward the basket for a couple of nice layups.

The Celtics rattled off an 11-0 run late in the quarter that lifted them into a 53-43 lead before settling for a 55-46 advantage by the break.

They would extend their lead to as many as 16 with about five minutes left in the third before the Raptors closed with a flourish to cut Boston's lead to 84-80 heading into the fourth.

Associated Graphic

Toronto Raptors point guard Kyle Lowry prepares to shoot the ball as Boston Celtics forward Amir Johnson defends during the first half at Air Canada Centre. The Raptors beat the Celtics 114-106.

TOM SZCZERBOWSKI/USA TODAY SPORTS

Raptors take down battered Utah squad
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Toronto mounts an impressive comeback with four minutes left in the fourth quarter after trailing for nearly the entire game
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By ROBERT MACLEOD
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Friday, January 6, 2017 – Print Edition, Page S3


TORONTO -- You know the NBA is changing when Dwane Casey takes mild umbrage to the suggestion he forged his reputation on being a defensive-minded coach.

"First of all, I'm a basketball coach," the Toronto Raptors bench boss insisted before Thursday night's game against the Utah Jazz at Air Canada Centre.

"I'm not a defensive coach, I'm not an offensive coach. I want to be successful on both sides."

Casey has been widely lauded for devising the defensive schemes that helped the Dallas Mavericks win the NBA championship when he was an assistant coach. That was back in 2011. Perhaps he has forgotten.

With that trait weighing heavily on his résumé, the Raptors brought Casey to Toronto the following season to take over as head coach. He has never left.

It was in that vein that an interrogator wanted to know on Thursday how a coach with that kind of defensive pedigree felt about the offensive-first onslaught that has dominated play this season in the NBA, with the three-point shot playing a prevalent role.

After his initial rebuke, Casey warmed to the topic, pointing out that if you want to be a successful team in the modern NBA, a long-distance aerial attack is essential.

"We all have to adjust," Casey said. "I think we've adjusted our philosophy here to take in that change, to shoot the three. Some shots I would have said five or six years ago that were bad shots, are good shots."

Against Utah, many of Toronto's shots were not falling - until the end that is when the Raptors (24-11) overcame an uneven offensive performance to pull off a 101-93 victory over the Jazz (2215).

It was mostly an uphill battle for the Raptors, who did not secure their first lead of the game until just under four minutes remained in the fourth quarter when DeMar DeRozan connected on an 18-foot pull-up jumper to move Toronto in front 89-88.

A driving layup from Kyle Lowry followed by a tip-in by Jonas Valanciunas provided Toronto with a 98-93 lead with just under a minute to go to sink Utah's hopes.

Lowry led all scorers with 33 points while DeRozan finished with 23.

While the Raptors have not gone hog-wild like some other NBA outfits with the three-ball, it remains an important part of their offensive arsenal.

Heading into NBA play on Thursday, a little more than 31 per cent of field goals attempted throughout the league this season are from behind the threepoint arch.

Should that trend continue, it would establish a season high, eclipsing the current standard of 28.5 per cent established last year.

The Houston Rockets are the league's long-distance kings with 45.6 per cent of all their fieldgoal offerings coming from three-point range.

"A lot of the ... league is going to that philosophy," Casey pointed out. "Houston's got it down to a science right now. They've got a team full of three-point shooters that are taking advantage of it."

The Raptors are not that daring as Houston, with just 28.7 per cent of their shots originating from long distance. But the team still embraces the quick strike from downtown.

In terms of three-point efficiency this season, the Raptors rank No. 3, hitting on 38.9 per cent of their attempts with Lowry taking things to extremes.

Heading into the Utah game, just over 50 per cent of the point guard's field-goal attempts were from beyond the arch - and why not when he's been successful on just over 44 per cent of those heaves, the third highest mark in the NBA.

Casey said he is okay with Lowry's new-found love affair for long-range marksmanship.

"It's kind of a natural evolution of his game," Casey said. "He's worked on his three-point shot.

The things we run offensively are geared toward him getting the three-point shot.

"He's one of the few players in the league on the dribble-up, three-point shots, he's pretty good. It's usually one of the lower percentage plays. But he's one of those rare individuals who can make that shot."

Thursday's game marked a return home for Toronto following a six-game holiday road swing where the team went 3-3, including a 110-82 thumping at the hands of the San Antonio Spurs in their last outing Tuesday night.

The Raptors encountered a battered Utah squad that was missing starting point guard George Hill, who is continuing through the league's concussion protocol.

The Raptors played their third straight game without the services of forward Patrick Patterson, who continues to be bothered by a strained left knee.

Associated Graphic

Gordon Hayward of the Utah Jazz, left, fails to block a jump shot from the Raptor's DeMar DeRozan at Air Canada Centre in Toronto on Thursday.

DAN HAMILTON/USA TODAY SPORTS

Raonic comes from behind to defeat Nadal
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By JOHN PYE
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The Associated Press
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Saturday, January 7, 2017 – Print Edition, Page S2


BRISBANE, AUSTRALIA -- Rafael Nadal was up a set and had a break point against defending champion Milos Raonic when he sent a forehand just wide.

It was a mistake the 14-time Grand Slam champion wouldn't recover from.

Raonic made the most of the reprieve, holding serve in that fifth game of the second set and then attacking Nadal's serve in the eighth to swing the momentum his way in a 4-6, 6-3, 6-4 quarter-final win Friday at the Brisbane International.

The top-seeded Raonic broke Nadal's serve again to start the third set, and calmly held on for only his second win in eight matches against the Spaniard.

Raonic served 23 aces and hit 50 winners to just 19 for Nadal, who could only convert one of his seven break-point opportunities.

As well as the big, deep service returns, Raonic also repeatedly went to the net, trusting his instincts and putting pressure on Nadal.

"Today the mentality behind the match was what sort of kept me around," Raonic said. "Some moments things weren't looking great. I wasn't efficient coming forward. I was missing some shots I shouldn't be. I was rushing.

"But at least I kept myself there, and I was able to always recuperate the next point. That's what I have to be most proud of."

Nadal, coming back from a layoff after an injured left wrist curtailed the end of his 2016 season, beat Raonic in an exhibition tournament last week. But Raonic played with more intensity in Brisbane, and Nadal said a couple of lapses were costly.

"Probably if I put that passing shot forehand cross, I had the break in the second set, big chance that we will be here one hour before with a victory," Nadal said. "That passing shot was long, and that's it. Then he had the break and match changes."

Nadal said three wins at the exhibition tournament, two wins and a close result in Brisbane gave him confidence his progress was good ahead of the Australian Open, where he is desperate to make amends for a surprising first-round exit last year.

Still in contention to start backto-back seasons with a Brisbane title, Raonic will play seventhseeded Grigor Dimitrov - a 6-3, 4-6, 6-3 winner over No. 4 Dominic Thiem - in the semi-final.

U.S. Open champion Stan Wawrinka and third-seeded Kei Nishikori will meet in the other semi-final match.

The second-seeded Wawrinka beat unseeded Kyle Edmund 6-7 (2), 6-4, 6-4 to reach the semifinal in his first trip to the Brisbane tournament.

In the previous three years, Wawrinka won the title in Chennai, India in the first week of the season before heading to Australia for the season's first major.

Wawrkina has a 4-3 lead over Nishikori in career head-to-heads, including the semi-final at the U.S. Open last year, but Nishikori won two of the three meetings in 2016.

Nishikori has now reached the semi-final four times in seven visits to the Brisbane International, needing just an hour for a 6-1, 6-1 quarter-final win over Australian wild-card entry Jordan Thompson.

"I think I played one of the best matches so far, really dominating from the baseline and serving good today," Nishikori said.

"Everything was working well."

U.S. Open finalist Karolina Pliskova will play Alize Cornet in the women's final on Saturday.

Cornet was leading 4-1 when French Open champion Garbine Muguruza retired with a right thigh injury. Pliskova beat sixthseeded Elina Svitolina 6-2, 6-4 in the other semi-final match.

"A little bit of luck never killed anybody," said Cornet, who finished last year ranked No. 46 but now expects to be seeded at the Australian Open. "I'm just going to take it. I really enjoy the fact that I'm in the final. It's a big day for me, yeah."

Muguruza didn't think the injury setback would trouble her at the Australian Open.

"It will not stop me," Muguruza said. "Cornet was playing good. I couldn't match her level today. I had some pains, and I thought it was smarter to take care of my body."

Associated Graphic

Milos Raonic defeated Rafael Nadal in the quarter-finals at the Brisbane International tournament on Friday.

TERTIUS PICKARD/THE ASSOCIATED PRESS

Bouchard's fortunes rising Down Under
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After slipping to No. 46 in the world rankings by the end of 2016, Canadian is looking strong in warm-up events for Australian Open
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The Associated Press
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Thursday, January 12, 2017 – Print Edition, Page S2


SYDNEY -- Canadian tennis star Eugenie Bouchard continues her strong start to the year.

The Westmount, Que., native defeated Anastasia Pavlyuchenkova 6-2, 6-3 in the quarter-final at the Sydney International on Wednesday.

Bouchard had a breakout season in 2014, reaching the semifinal at the Australian Open and French Open before making the final at Wimbledon. But she has gone past the fourth round at a major only once since then and slipped to No. 46 at the end of last year.

"I feel more and more confident every day," Bouchard said.

"I feel like I'm getting back into the rhythm of things a little bit, but it's a long road."

The Canadian's semi-final opponent will be Sydney-born Johanna Konta of Britain, who beat Daria Kasatkina 6-3, 7-5. Konta broke Kasatkina's service in the 11th game of the second set, helped by a double-fault to set up break point in that game.

Last year at the Australian Open, Konta became the first British woman to make a Grand Slam semi-final since 1983, before losing to eventual champion Angelique Kerber.

Meanwhile, former No. 1 Caroline Wozniacki's streak of not advancing past the quarter-final in her past seven Sydney Internationals was extended in stifling heat.

In temperatures reaching 40 C for much of the match, Barbora Strycova defeated Wozniacki 7-5, 6-7 (6), 6-4 in a duel that stretched to 3 hours 19 minutes.

Both players were treated for foot injuries during a gruelling second set at Ken Rosewall Arena. Wozniacki came back from 5-2 down in that set, and then 5-0 in the tiebreaker, to win it and force a third set.

"It was brutal out there ... but you just try and think like you're on a beach drinking pina coladas," Wozniacki said. "That's basically your train of thought. You know that it's the same for both players, so I was just trying to mentally just try and keep cool."

In the semi-final, Strycova will play Agnieszka Radwanska. The second-seeded Pole beat Chinese qualifier Duan Yingying 6-3, 6-2.

In men's play, two-time defending champion Viktor Troicki beat Paolo Lorenzi 6-3, 6-4, and second-seeded Pablo Cuevas of Uruguay defeated Nicolas Mahut of France 6-4, 2-6, 6-2.

In Auckland, John Isner narrowly avoided the fate of two former champions when he beat Malek Jaziri 6-3, 3-6, 7-6 (6) to make the quarter-final of the ASB Classic.

Isner won his last three points with volleys at the net.

"The way I need to finish points is that, if I can, I have to try and finish them at the net," Isner said. "I did that three times in a row and I'm very proud of that."

Four former champions were scheduled to play second-round matches Wednesday but by the time the second-seeded Isner took the court, two had bowed out.

Defending champion and No. 1-seeded Roberto Bautista Agut was forced to withdraw before play began because of a stomach virus, handing Ruben Statham a place in the second round as a lucky loser from the qualifying rounds.

Jiri Vesely, the 2015 champion, was due to play Bautista Agut and thought he had caught a break when the Spaniard withdrew and the 434th-ranked Statham took his place. But Vesely had a tussle on his hands before winning 6-7 (6), 7-5, 6-3.

Four-time champion David Ferrer was first up on centre court and lost 6-2, 4-6, 7-6 (4) to Robin Haase of the Netherlands. In a night match, fourth-seeded Jack Sock beat fellow American Ryan Harrison 7-6 (5), 4-6, 6-1.

At the WTA's Hobart International, former French Open finalist Lucie Safarova was beaten 2-6, 6-3, 7-5 by Japanese qualifier Risa Ozaki. Ozaki will next meet Monica Niculescu.

Top-seeded Kiki Bertens advanced with a 6-1, 6-4 win over Galina Voskoboeva of Kazakhstan and Shelby Rogers defeated Lara Arruabarrena of Spain 6-2, 6-2.

Associated Graphic

Eugenie Bouchard returns a shot to Anastasia Pavlyuchenkova of Russia en route to victory in Sydney on Wednesday.

RICK RYCROFT/THE ASSOCIATED PRESS

'There was nothing easy about it'
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Laval Rouge et Or come back from a 14-point deficit to defeat the Calgary Dinos 31-26 and win ninth national championship
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By SHELBY BLACKLEY
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Monday, November 28, 2016 – Print Edition, Page S3


HAMILTON -- In the Canadian university football circuit, it's hard to ignore the dominance of the Laval Rouge et Or.

Since the birth of the school's football program in 1995, the Rouge et Or have made nine appearances in the Vanier Cup, the national championship. They won eight of those.

So in their 10th appearance on Saturday at Tim Hortons Field, it seemed only natural that the Laval Rouge et Or came back from a 14-point disadvantage, only took their first lead with 21 seconds left in the third quarter, blocked a punt for the go-ahead touchdown and rolled with dominance to their ninth national championship victory, defeating the Calgary Dinos 31-26.

After taking a two-year hiatus from the Vanier Cup, quarterback Hugo Richard marched Laval back into the Vanier Cup win column, finishing 25-for-32 for 339 yards, two touchdowns and one interception. He also ran for 62 yards on nine carries.

"I like showing to people that I'm capable of playing football.

There's always going to be critics, but listen, I'm my biggest critic, it doesn't bother me," said Richard, who was chosen as the game's MVP.

At the beginning of Saturday's final, Laval looked lost. Richard was sacked five times in the first half. The quarterback called a timeout, not knowing what play should be called. Laval was caught off guard when Calgary's Michael Klukas scored an 86-yard touchdown on the Dinos' first play of the game, and didn't expect Calgary to march into the end zone on its next possession on a two-yard rush from halfback Anthony Anderson.

But Laval never really went away. After Calgary went up 14-0, Richard didn't miss his opportunity and threw a 37-yard toss to Marc-Antoine Pivin and cut the lead to 14-7.

Calgary extended its lead to 17-7 after Niko DiFonte connected on a 43-yard field goal on the Dinos' first drive of the second quarter.

Richard was sacked for a fourth time early in the second quarter and the Rouge et Or had to settle for a field goal.

Laval drove the ball down into Dinos territory late in the second quarter but Tyrone Pierre fumbled the ball on the Calgary twoyard line. DiFonte kicked a 31-yard field goal on the Dinos' first possession of the second half to make it 20-10. Cedric Lussier-Roy sacked Adam Sinagra deep in Calgary territory to force a fumble in the third quarter. The Rouge et Or recovered and Richard didn't miss his opportunity, connecting with Antony Auclair for a five-yard TD to make it a three-point game.

Vincent Alarie-Tardif capped off a 10-play, 89-yard drive late in the third quarter by punching in a touchdown from three yards, giving Laval a 24-20 advantage.

Calgary regained the lead midway through the fourth off two consecutive field goals to make it 26-24. And in a crazy series of events, the Dinos intercepted Laval's Richard, followed by Laval blocking a Calgary punt.

Only minutes later when Richard marched in for the game-winning touchdown with 2:33 left in the game, securing the countryleading ninth victory.

"There was nothing easy about it," said Laval head coach Glen Constantin. "Trailing 14-0, that's a lot of adversity and the guys on the bench were a little bit disoriented about that but they believed." Sinagra came on in relief in the first quarter and completed 21of-38 passes for 276 yards and an interception for the Dinos. Calgary's Jeshrun Antwi had 25 carries for 177 yards and DiFonte kicked four field goals. Nick Statz had two of Calgary's seven sacks on Richard. The loss drops the Dinos to 4-6 in Vanier Cup compeitions, with their last championship coming in 1995.

Associated Graphic

Laval's Daniel Tshiamala-Tshibangu hoists the Vanier Cup after defeating the Calgary Dinos in Hamilton on Saturday.

NATHAN DENETTE/THE CANADIAN PRESS

Canadian recovery will require more than export growth
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By DAVID PARKINSON
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Saturday, January 7, 2017 – Print Edition, Page B2


After a difficult and perplexing year, Canada's exporters may finally be seeing the good news that went AWOL throughout most of 2016. It still might not be enough to translate into the recovery in business investment that the Canadian economy sorely needs, as investment faces new uncertainties that trade data can't measure. But investment's loss could be the job market's gain.

Statistics Canada reported Friday that Canada posted a merchandise trade surplus of $526-million in November, the first surplus in more than two years. The result was not only utterly unexpected (the median estimate among economists was a deficit of $1.6-billion), but was also free of any obvious asterisks that would undermine the happy story.

The value of exports jumped 4.3 per cent, largely because of higher volumes. The gains were virtually across the industry gamut. Unlike October, when the trade deficit shrank to $1-billion from $4.2-billion in September, the November improvement couldn't be pinned on a one-off event that twisted the data (such as the September importation of a single $3-billion offshore drilling platform component from South Korea).

Sure, November is just one month. But free of oil platforms and Alberta wildfires and any other obvious distortions, this month looked like the real thing.

Still, some context is necessary here. Even with November's gains, export volumes were down 0.3 per cent for the first 11 months of 2016. Non-energy export volumes were down more than 2 per cent - topping the list of economic disappointments in 2016, as non-energy exports had been widely expected to lead Canada's growth in the year.

Non-energy exporters are scrambling just to get back to where they were a year ago - which suggests that their needs for new production capacity haven't grown. (Indeed, the country's manufacturing capacity utilization rate in the third quarter, the latest data available, was below its year-earlier level.) It's going to take a lot more months in the tone of November to press exporters to invest in new capacity on a broad scale - a key element to the Canadian recovery that remains elusive.

Still, there's reason to be optimistic that more November-like months are to come in 2017, at least in direction if not necessarily in size.

The U.S. economy, home to three-quarters of Canada's exports, is unmistakably humming again after hitting some flat notes in the middle of 2016.

There's good reason, too, to expect that the Canadian dollar will remain supportive of exports, despite the slow rise of energy prices. The Bank of Canada looks to be at least a year behind its U.S.

central-banking counterpart, the Federal Reserve, on raising interest rates, with the Fed having hiked its key rate last month and looking likely to raise it several more times over the next year.

That divergence should keep currency traders favouring the U.S. dollar over its Canadian counterpart.

But to take the leap the Canadian recovery is still waiting for - from export growth to business investment - there looms a new barrier: Donald Trump. The U.S. president-elect's protectionist threats on trade pose a wall of uncertainty for longer-term access to the U.S. market. Any Canadian exporter considering expansion to meet growing U.S. demand will necessarily have to consider this risk, and may opt for shorter-term fixes rather than committing capital to largerscale, longer-term projects. In that sense, the next year could look a lot like the last, where a confluence of nagging uncertainties kept many businesses nibbling around the edges of investment, replacing and upgrading existing equipment rather than outright expanding.

That could translate into strength in another key element of the Canadian economy: the job market. If companies feeling increasing capacity pressure are hesitant to spend heavily on new facilities, the obvious shorterterm alternative to meeting growing demand is to hire more staff.

It may already be happening.

The turnaround in Canada's trade numbers over the past few months - from record deficit to small surplus - has been accompanied by a surge in employment, capped by December's surprise 54,000-job gain, also reported Friday.

It's no coincidence that the biggest job gains have been coming from the services sector - which has experienced much stronger export growth over the past year than the goods-producing sector.

(The monthly Statistics Canada merchandise trade report covers only goods trade; data on services exports are only released along with quarterly gross domestic product numbers.)

If we are, indeed, at the cusp of a phase in which goods exports start to catch up with the growth on the services side, then we could see Canada maintain its strong labour market as producers lean on hiring to meet rising demand. Ultimately, longer-term investment will be the healthier outcome for the economy; but until the Trump smoke clears, Canadians will happily take the jobs.

Associated Graphic

The Chem Sirius is the first ocean-going vessel to enter the Port of Montreal in 2017. Statistics Canada reports that Canada posted a merchandise trade surplus of $526-million in November, the first surplus in more than two years.

Canada will 'thank' Trump - in 2042
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By KONRAD YAKABUSKI
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Friday, January 6, 2017 – Print Edition, Page B1


As our country prepares to celebrate its 175th birthday this year, let us give thanks to Donald Trump for making Canada great again.

As Canadians, we don't often credit former U.S. presidents for our own nation-building. But it was Mr. Trump, who came to power during our country's sesquicentennial in 2017, who finally forced us to undertake a top-tobottom restructuring of our economy and put Canada first.

Sometimes it just takes a nudge - or in Mr. Trump's case, a threatening tweet - to get you to do what you should have been doing all along.

Mr. Trump had not yet even been inaugurated when, in early 2017, he fired this shot read around the world: "General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers tax-free across the border. Make in U.S.A or pay big border tax!"

Boy, did that concentrate minds in Oshawa, Ont., and Ottawa. As did Mr. Trump's move, on his first day in office, to slap an across-the-board 10-per-cent tariff on imported goods.

That was just before he withdrew his country from the "disastrous" North American free-trade agreement.

Ottawa moved swiftly to adapt to the new reality. In his 2018 budget, Finance Minister Bill Morneau introduced the FirstCanada-Premier Plan, better known as the New National Policy or NNP, with a focus on import substitution over exports. It was a raging success, sparking a wave of domestic innovation that led to such national favourites as maplesyrup-sweetened Coke.

For too long prior to Mr. Trump's election, economic policy makers here had promoted continentalism over Canadianism. We'd tied our fortunes to trade with the United States and Mexico - and even to Europe and Asia - not realizing we were pawns in a global corporate agenda aimed at lifting Mexican, Romanian and Chinese workers out of poverty.

Sure, we got plenty of cheap stuff (not to mention some delicious California wines) out of the bargain. Never had we been able to clothe or feed ourselves so well for so little, or distract ourselves with such affordable electronic gadgets.

Still, that was no consolation for what we lost in factory jobs and domestic self-sufficiency.

Autarchy turned out to be so much more conducive to the formation of our national identity.

Under free trade, we simply imported what we could not produce efficiently here and exploited our comparative advantage to export goods and services in which we had a competitive edge. Economists insisted this boosted incomes and purchasing power across the board, even if some workers in uncompetitive industries lost their jobs to imports or had to be replaced by robots.

Under the NNP, that was no longer a problem. Prohibitive import tariffs made robots too expensive, leading to a hiring surge at McLaughlin Motors, the new name for GM Oshawa. The latter was cut loose by its U.S. parent, nationalized by Ottawa and rechristened in a nostalgic nod to the factory's 19th century roots as the McLaughlin Carriage Co. It continued to churn out Buick Regals and Chevy Impalas under licence from GM, only with all-Canadian parts.

Without robots, productivity declined and prices rose. But at least Unifor's leaders, who echoed Mr. Trump in calling NAFTA a disaster, could no longer complain.

Of course, only the rich could actually afford to buy new cars.

Old Regals from the early Trump era outnumbered newer models on Canadian roads.

Tourists joked it made Toronto look like Havana. To which the locals responded: "Have you been to Ohio? They only drive old Cruzes."

Luckily, Canada had domestic oil to keep our internal combustion engines running. The new TransCanada Resource Railway, built as part of the national infrastructure plan Ottawa undertook in the absence of export-led growth, moved Alberta crude across the country.

Alberta's grain farmers, meanwhile, somewhat made up for lost export markets after Britain, following its exit from the European Union, reintroduced its 19th-century Corn Laws.

Under its "imperial preference" policy, Britain exempted former colonies from sky-high agricultural tariffs.

The NNP also prompted BlackBerry to get back into to the business of making handheld devices on domestic soil. Their apps still sucked, of course. But tariffs on imported iPhones and Galaxies were so high as to put them out of reach for most Canadians.

Not that they were missing much. The Trump-era was a mostly low-tech one and Moore's Law finally ran up against protectionism. Silicon Valley was forced to close shop in the early Trump years due to the U.S. ban on immigration.

The entire valley was turned into a lettuce farm.

Expensive electronics turned out to be a blessing in disguise.

Canada's newsprint sector experienced a renaissance as print became king again in media and publishing. Kapuskasing, Ont., and Baie Comeau, Que., boomed. It was like the 20th century had never ended.

Looking back on it all today, in 2042, it's hard not to be grateful to Mr. Trump. Maybe we should put up a statue of him on Parliament Hill or something - made out of Canadian bronze.

BRACING FOR TRUMP
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'Border adjustment tax' threatens Canadian exports
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By RACHELLE YOUNGLAI
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Wednesday, January 11, 2017 – Print Edition, Page B1


So far, Canadian manufacturers have escaped U.S. presidentelect Donald Trump's Twitter tirades, but Canada may not be able to dodge the new U.S. government's protectionist measures.

Lurking in a Republican blueprint to overhaul the U.S. tax code is a policy that has the potential to hurt Canada's economy: a border adjustment tax.

The measure was crafted by the most powerful congressional lawmaker, House Speaker Paul Ryan, and is part of the Republican Party's plan to revamp tax policy and entice businesses to operate in the United States.

The Republican blueprint provides very few details on how the border tax would work. This is what we know so far.

What is a border adjustment tax?

The border adjustment tax is designed to boost domestic production and U.S. exports. It is also aimed at stopping so-called corporate tax inversions, in which U.S. companies move their headquarters to another country with a lower corporate tax rate to reduce their taxes.

The border adjustment tax would effectively tax imports to the United States at the corporate tax rate, and exempt from taxation the profits made when companies export from the country.

If the U.S. corporate tax rate is slashed from the current 35 per cent to 20 per cent - as the Republican blueprint proposes - that means a 20-per-cent tax would be slapped on imports to the United States.

For example, a car that was assembled in Canada and then imported to the United States would be taxed at 20 per cent.

Meanwhile, the U.S. engine exported to Canada would not be taxed.

"Under current law, if you import something, that is deductible like any other business expense," said Hendrik Brakel, senior director of tax policy with the Canadian Chamber of Commerce.

"Under a border tax, you can no longer deduct the cost of imports. It effectively ends up being a 20-per-cent tariff," he said.

Impact on Canada?

A border adjustment tax would penalize all exporters to the United States. But the impact on the country's closest trading partners, Canada and Mexico, would be the most severe.

About 75 per cent of Canadian exports go to the United States, accounting for about a fifth of Canada's economic output, according to Toronto-Dominion Bank research.

A tax on Canadian exports to the United States would make Canadian products more expensive. It would force U.S. businesses to look elsewhere for cheaper products and slow trade with Canada's largest trading partner.

"On its face, this proposal is devastating," said Daniel Schwanen, vice-president of research with the C.D. Howe Institute think tank. "This could really hurt trade and millions of workers in Canada," he said.

According to the Canadian Manufacturers & Exporters (CME) group, it would be a logistical nightmare because manufacturing parts are difficult to track and finished products contain varying amounts of Canadian content.

For example, car parts move across the Canada-U.S. border multiple times before a vehicle is ready to be sold to a customer.

"How would they tax a vehicle?" said Mathew Wilson, senior vice-president of CME, which represents 90,000 manufacturers across Canada. "The majority of cars going into the U.S. have more U.S. content than Canadian content."

According to Mr. Wilson, there isn't a system in place to trace products to their country of origin. The 1965 Auto Pact between the United States and Canada, as well as the North American freetrade agreement, allow most manufacturing parts to move freely between countries without being taxed.

"Would you tax the full value, or do you only tax the amount that came from Canada?" Mr. Wilson said. "How do you even figure out the amount that came from Canada. There is no regulation or law that asks for how much comes from Canada. All you have to track is how much comes from the NAFTA partners."

The tax proposal wouldn't necessarily give U.S. exporters a lasting advantage, though. Economists believe the tax would cause the U.S. dollar to rise sharply - making U.S. exports more expensive and other countries' goods, including Canada's, cheaper to import.

Odds of becoming law?

For the first time since 2006, Republicans will control the White House, the House of Representatives and the Senate.

In theory, that means Republicans should have an easier time passing laws. But there are roadblocks. Republicans only have a slim 52-48 majority in the Senate and it is unknown what kind of support there is for a border adjustment tax.

Republicans and Mr. Trump agree on cutting the corporate and individual tax rate, but there are sharp disagreements over Mr. Trump's protectionist policies.

Retailers, tech companies and other importers would likely oppose the tax and lean heavily on lawmakers to scrap the measure.

Associated Graphic

U.S. president-elect Donald Trump's border tax would create a 20-per-cent levy on imports.

DREW ANGERER/GETTY IMAGES

A European dynasty's view on the backlash against trade
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By TIM SHUFELT
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Monday, January 16, 2017 – Print Edition, Page B1


The Wallenberg family is sometimes referred to as the "Swedish Rockefellers." What began as a single Swedish bank, established in the 1850s by André Oscar Wallenberg, has become one of Europe's true family dynasties.

Now run by two of André's great-great grandsons, Jacob and Peter, and their cousin, Marcus, the Wallenberg's industrial empire is behind most of Sweden's largest companies, including Ericsson, Electrolux, AstraZeneca, Atlas Copco, ABB and many others.

Marcus Wallenberg recently sat down with The Globe and Mail in Toronto to talk about the family's interest in Canada, and to make a case for international trade, at a time when anti-globalization forces gain strength in North America and Europe alike.

What brings you to Canada?

A multitude of reasons.

It's natural for us, my family, to come here and try to understand the landscape a bit more.

Some of our companies have been in Canada for a long time and have sizable operations here.

Some of them are heavily involved in research and development, like Ericsson, which took over parts of Nortel's operations, and have tried to really build on that. We had a chance to meet with them. We also have relationships with Canadian companies like Bombardier, and we've been catching up with them. And we have the chance to talk to some of your politicians.

Are you looking for potential investment opportunities here?

We already invested in one company called Laborie, a medicaltechnology company in Toronto. It's early days, but we're very happy with it. In part of our investment portfolio, we've decided to focus on wholly owned companies where we focus on "buy to build" over a very long period. We need to learn what the possibilities are for us to be more active in Canada. We're very long-term owners, so it's a matter of getting to know people and understanding each other's agenda. But the pace of technological development we now see, in life sciences and high tech, opens up opportunities for reshaping product offerings without necessarily going out and buying new companies. Look at AstraZeneca, which is developing immunology treatments, and they participate with Canadian institutions.

Ericsson is investing heavily in the 5G area - the next phase of communications. ABB is putting a lot of effort to move into electric vehicles and transport systems, and clean energy.

What is the appeal of the Canadian market?

I come from a country that, like Canada, is very dependent on foreign trade. For us to be able to maintain a healthy economy, it means we need to compete, and we need to innovate. We have a common agenda on innovation. It also seems timely, now with CETA [the Comprehensive Economic and Trade Agreement] coming through.

That will encourage business between Europe and Canada. The chance to open up markets will be quite interesting.

How significant is CETA from your family's perspective?

My family has been involved with international trade questions for several generations.

I've been involved in trying to promote the Doha Round for a long time, and we're big supporters of the WTO [World Trade Organization]. And if this agreement falls into place, it's going to be a major step forward.

Does the populist backlash to globalization and free trade concern you?

I happen to believe the global expansion, the increase of trade we saw since the Second World War with multilateral-trade agreements, has been beneficial for most of the world, despite the fact that it's now being criticized. Hundreds of millions of people have gotten better lives as part of this expansion. Since the global financial crisis, growth has been relatively limited, and jobs have disappeared, not only because of globalization, but because of a great technology shift. So the reaction is not strange. But there are ways to take care of the tough effects of globalization.

I think globalization and trade will be an important contributor to global progress in the future, but it will have to be handled with care.

Has it been handled with care in Sweden?

Yes, I think so. People have had to move between professions, and we have very effective packages to help those people. But the immigration issue has been difficult. We've taken in many people from conflicts in North Africa and the Middle East in the last few years. It's been a major movement, and there's been a lot of debate in our country. At the same time, we've been fortunate to have strong economic growth throughout that period. That has helped balance it out.

Associated Graphic

Swedish industrialist Marcus Wallenberg, seen leaving a meeting with former Brazilian president Dilma Rousseff in March, 2015, represents his family's interests internationally, including in Canada.

UESLEI MARCELINO/REUTERS

Toll roads: one more reason to ditch your car
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By ROB CARRICK
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Monday, November 28, 2016 – Print Edition, Page B1


Toronto's plan to charge highway tolls drives home a point about personal finance for the decade to come: Cars are a financial liability that will only get worse.

So many government priorities can be served by squeezing drivers - fight global warming, ease urban road congestion, find money for public transportation and other projects. Some households can't operate without a car, especially if they have kids or make long daily commutes from the boonies.

For everyone else, here are four reasons to think about ditching your car.

Toll roads are coming Toronto mayor John Tory announced plans last week to charge tolls on two heavily used highways that connect the downtown with the suburbs to the north and west - the Don Valley Parkway and the Gardiner Expressway. The cost being floated is a $2 toll, which would generate up to $200-million for public transportation and infrastructure projects. There is no way that other cities aren't studying Toronto's move.

City councils across the country are hypersensitive about property tax increases these days.

Calgary is looking to hold the line on taxes next year, while Ottawa is proposing a 2-per-cent increase and Winnipeg is looking at 2.3 per cent.

Small increases such as these are politically savvy in our slowgrowth economy, but they won't let some cities do more than maintain the status quo. Road tolls are an obvious way to augment city revenues.

Prepare for toll lanes on highways, metred toll highways such as Highway 407 in Ontario (the further you drive, the more you pay) and new tolls on old highways.

Gasoline prices are going to rise The federal government is working with the provinces to fight climate change by putting a price on carbon. Expect to see higher prices for home-heating fuel, for gasoline and possibly for electricity. There are estimates that a carbon tax would boost gasoline prices by about 11 cents a litre, enough to raise fuel costs for a household by a couple of hundred dollars a year on average. A carbon tax is symbolic of the view that cars are part of the problem in today's world and their use must be discouraged.

Even without a carbon tax, gasoline prices are likely headed higher over time.

Today's moderate prices are a result of slow global economic growth.

If output around the world starts to pick up, rising oil prices will push the cost of gasoline higher as well.

Car loans are crazy today A shocking 56 per cent of new vehicle loans today have a term of seven or more years, the auto industry analysts at J.D. Power and Associates say. The auto industry has clearly found a way to make its products affordable to everyone - reduce monthly payments by making them last a few extra years. And yet, the average new car payment in Canada is still roughly $570, according to J.D. Power.

People dismiss concerns about long-life car loans by talking up the deals they're getting - zero per cent financing in some cases. But cars sold with interest-free loans can be more expensive overall than vehicles with rebates or discounts that are financed at regular interest rates. If you get zero-cost financing, you usually don't get the best price breaks.

The worst part of car loans of six to seven years or longer is that they often result in people trading in a vehicle before the loan is paid off. The amount owing is added to the cost of a new vehicle, which is bad personal finance. Your goal with a car loan should be to pay it off and deploy that cash more productively, not fold it into a bigger loan.

What you buy today could be obsolete tomorrow The typical car or truck starts depreciating when you leave the dealer's lot. But there's now some additional risk of depreciation due to changing technology.

Plug-in electrics are coming down in price, and so are hybrid gas-electric vehicles. Chrysler's new Pacifica minivan comes in a hybrid model that costs less than the gas version in Ontario thanks to a provincial rebate designed to reduce exhaust emissions.

If hybrids or plug-ins reach a tipping point of affordability, the value of a basic gas-powered car could fall hard.

The rise of driverless cars could also lower the value of your family car. People who make grinding daily commutes in traffic are going to be all over these vehicles as they become affordable. Think you can ditch your car? If ever there was a time to sit out the car ownership experience for a few years to see what's coming, it's now.

Follow me on Twitter: @rcarrick

Investors look to earnings growth
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After the postelection rally, the markets are turning their focus to signs that corporate profits are on the rise
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By TIM SHUFELT
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Monday, January 9, 2017 – Print Edition, Page B1


As the first earnings season since the U.S. election gets started, investors are eager for evidence that corporate executives' optimism matches their own.

Fourth-quarter earnings season begins in earnest this week with a number of big U.S. banks, including JPMorgan Chase & Co., Bank of America Corp., and Wells Fargo & Co., among the S&P 500 companies to report their results.

Amid the wave of financial statements and management conference calls this week, investors will be looking for confirmation that the profit backdrop is strong enough to justify the remarkable rally in stocks.

"Will management start to hint at what they expect under different policy prescriptions?" asked Jonathan Golub, chief U.S. market strategist at Royal Bank of Canada's investment arm.

In the two months since Donald Trump became the U.S. president-elect, the market has been bidding up stocks, confident that his agenda will translate into policies that strengthen the U.S. economy. Promises he made through the campaign, such as cuts to household and corporate taxes, increased infrastructure spending, reduced regulations and the repatriation of foreign cash, helped lift U.S. equities to record highs.

American banks are arguably the segment of the market set to benefit the most from Mr. Trump's policy agenda. Fewer regulations, rising interest rates and lower taxes could together disproportionately boost bank profits. Plus, if the new administration's policies mean improving business and consumer confidence, that should translate into a higher propensity to borrow.

As of Friday's close, the S&P 500 index has increased by nearly 10 per cent since early November and 6.4 per cent since election night. On Friday, the Dow Jones Industrial Average came within a hair of breaking through the 20,000-point mark for the first time. The KBW bank index, which tracks U.S. financial shares, is up 23 per cent since the vote. Canadian markets have been nearly as strong, rising 5.7 per cent since Mr. Trump's victory, led by energy and some financial stocks.

This equity strength has happened despite an absence of much concrete news on the earnings front; stock valuations have been rising largely on sentiment.

The S&P 500 index now trades at a price-to-earnings ratio of about 17, based on earnings estimates for the next year, according to FactSet. That compares to a five-year average of about 15 times.

As a result, further stock gains are more likely going to have to come from earnings growth rather than continued multiple expansion, according to a number of strategists.

That's what makes this earnings season so important. The fourth quarter is expected to add to the evidence of a turnaround in U.S. profit growth, following the worst earnings recession since the financial crisis.

Dragged down by the collapse in energy prices, S&P 500 earnings declined for five consecutive quarters before hitting an inflection point in the third quarter of 2016.

Building on that growth, FactSet estimates that when the final numbers are in, fourth-quarter earnings will prove to have grown by 3.2 per cent.

If that estimate proves true, earnings growth for the entire 2016 calendar year will amount to 0.1 per cent, with an energy sector decline of 75 per cent proving the overwhelming negative influence, according to FactSet data.

Excluding oil and gas stocks, the S&P 500's earnings growth rate rises to 3.4 per cent for last year.

"The stagnation in earnings wasn't quite what it appeared to be. You had a huge drag from the energy sector and the rest of the market looked quite reasonable," Mr. Golub said.

With the global energy market having stabilized, and with West Texas intermediate trading at more than double its $26 (U.S.) low set last February, the sector's growth is expected to turn modestly positive in the fourth quarter, after grinding through eight straight quarters of decline, according to Zacks Investment Research.

In addition to energy, the market will be keen for results from the financial sector, which has driven the equity gains of the last two months more than any other.

Of course, the policy changes yet to come will have had no effect on fourth-quarter bank profits. Any potential boost to corporate earnings from Mr. Trump's policies is not likely to materialize for several more quarters. But earnings calls could shed some light on the level of confidence within the financial sector, Mr. Golub said.

"If you look at Wall Street analysts, they are unwilling to adjust their estimates, without having more specificity around policies, or at least guidance from management on what those policies might mean for earnings."

Associated Graphic

MICHAEL NAGLE, BLOOMBERG

THE GLOBE AND MAIL, SOURCE: BLOOMBERG

Higher mortgage rates? Already here
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By ROB CARRICK
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Friday, January 13, 2017 – Print Edition, Page B1


We're starting to get a picture of what mortgage rate increases do to household budgets.

If you're buying an averagepriced home in Vancouver, the increase in five-year fixed-rate mortgage costs over the past two months could add up to something like an extra $1,824 a year; in Toronto, you're looking at $1,584. In a small market such as Saint John, the extra cost would be close to $350.

The biggest question in housing today is what will happen when mortgage rates rise from the historic lows they've been at in recent years. We saw the very beginning of this in the final months of 2016 and the results are significant.

The mortgage market is so fragmented today that it's tough to document what's happening with rates. There are deep discount lenders you access through mortgage brokers, plus alternative banks, trust companies and credit unions that discount aggressively and big banks that have all kinds of different rates - posted and discounted rates, plus the rates they negotiate with clients who haggle.

So let's look at averages. Data from RateSpy.com show that on Nov. 8, the day of the U.S. election, the average rate on discounted five-year fixed rate mortgages for borrowers with a down payment of less than 20 per cent was 2.34 per cent. Earlier this week, the average was 0.37 of a percentage point higher at 2.71 per cent.

Surprisingly, the rise is a bit sharper for people who come up with a 20-per-cent down payment and thus don't have to pay the premium for mortgage default insurance. Here, RateSpy data show the average rate has climbed to 2.87 per cent from 2.44 per cent, a difference of 0.43 per cent.

Mortgage rates have risen for a couple of reasons, the first being a series of measures introduced by the federal government in an attempt to cool down the housing market. These measures either make it more difficult for borrowers to qualify for a mortgage, or they add to costs that are incurred by lenders and passed along to customers.

One of the quirks of these new regulations is that they have resulted in some lenders offering slightly lower rates to people who have a down payment of less than 20 per cent than they do for borrowers at or above that threshold.

Another result of the new rules is that it's more expensive to refinance a mortgage, which can mean adding new borrowing to the loan or extending the amortization period. RateSpy's data show the average rate for a refinancing has risen 0.5 of a percentage point since Nov. 8.

The other factor in higher mortgage costs is that rates in the bond market have moved up on the belief that U.S. presidentelect Donald Trump will introduce economic policies that increase both growth and inflation. The rate on five-year government of Canada bonds has a huge influence on fiveyear fixed rate mortgages. RateSpy's data show that five-year government bond yields increased 0.35 of a point between Nov. 8 and Jan. 9.

If you're renewing a maturing five-year mortgage in 2017, compare your rate with what's available today. It's quite likely you'll still be able to renew at a lower rate, even after the rise in mortgage costs of the past two months. In early 2012, a well discounted five-year fixed rate mortgage might have come with a rate of 2.99 per cent.

First-time buyers are hit the hardest by the recent mortgage rate increase, notably in bigger cities. A couple that buys a house in Toronto at the November average price of $776,684 might be looking at an extra $132 a month, or $7,920 over five years. The increase in Saint John seems minor on an annual basis, but it does add up to more than $1,700 over five years.

We've seen mortgage rates move higher in the past few years, and then pull back to new lows because of lingering economic weakness. This could happen again, but it seems unlikely.

Strong job creation numbers for December suggest a firming economy here in Canada, and then there's the Trump factor in the United States.

The rise of house prices in the past eight years is more than anything else a result of sustained low interest rates. We've just had a taste of what higher rates mean to affordability.

Follow me on Twitter: @rcarrick

Trump team says border tax plan includes Canada
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By GREG KEENAN, STEVEN CHASE
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Saturday, January 14, 2017 – Print Edition, Page B1


TORONTO, OTTAWA -- The incoming Trump administration has uttered the word Canadian auto industry executives have been dreading, saying a tax on vehicles imported into the United States could be applied to Canada.

A border tax will apply "when a company that's in the U.S. moves to a place, whether it's Canada or Mexico or any other country seeking to put U.S. workers at a disadvantage," Sean Spicer, a spokesman for president-elect Donald Trump, said during a conference call with reporters on Friday, Bloomberg News reported.

Until Friday, the name Canada had not arisen specifically in comments by the administration on auto exports or in the tweets Mr. Trump has sent out threatening to impose a "big border tax" on General Motors Co. and Toyota Motor Corp. for importing vehicles to the United States from Mexico.

Those Twitter comments and Mr. Trump's promise to tear up NAFTA have created upheaval among auto companies and parts suppliers - and have allowed Mr. Trump to steal the spotlight this week from the shiny new metal at the North American International Auto Show, the annual gala in Detroit where auto makers show off their latest offerings.

Mr. Trump's target so far has been Mexico; he did not single out Canada or any auto makers operating in this country in his tweets. But Canadian industry officials did not expect to stay off the radar. "I was just wondering when this would come," said Ray Tanguay, an automotive adviser to the Ontario and federal governments, when informed of Mr. Spicer's comments Friday.

Foreign Affairs Minister Chrystia Freeland's office said it is in talks with Trump staff on the matter and noted there is significant opposition to a border tax within the United States.

"We have a constructive working relationship with the Trump transition team, and discussions are ongoing," said Joseph Pickerill, Ms. Freeland's director of communications. "This particular proposal is something that has been floated for quite some time and is opposed by at least as many American lawmakers as support it, but at this stage, we are going to continue to work with the incoming administration on the interconnectedness and to the mutual benefit of our two economies."

The five auto makers that assemble vehicles in Canada exported about $60-billion worth of cars, crossovers and minivans to the United States last year.

In the past four months, four of them have announced investments totalling more than $2-billion at their Canadian plants, including a $400-million investment announced Monday by Honda Motor Co. Ltd., at its assembly plant in Alliston, Ont.

The subject of how the auto industry in Canada should respond to Mr. Trump's threats and the potential dismantling of the North American free-trade agreement was under discussion at a meeting in Detroit this week of the Canadian Automotive Partnership Council, a joint industry-union group set up to advise the government.

Mr. Tanguay updated the group, which includes the CEOs of all five auto makers, on a report he is writing that will offer recommendations to governments on how Canada can attract new automotive investment.

To head off border taxes on Canadian exports, industry leaders need to explain how closely integrated the auto industry is in Canada, the United States and Mexico - and how U.S. interests would be hurt if such taxes were imposed, Mr. Tanguay said on Friday.

While Canada has a trade surplus with the United States on finished vehicles, it runs a deficit of about $11-billion on parts because of the high value of parts that auto makers in Canada import from U.S. suppliers. Canadian industry officials need to lobby the governors of such states as Michigan, Ohio and Indiana - the sources of many of those parts - so they can lobby the new administration, Mr. Tanguay said.

"Those guys, I think, are going to be a voice of reason," said Rob Wildeboer, executive chairman of Toronto-based Martinrea International Inc., Canada's third-largest auto parts maker.

Mexico also imports billions of dollars' worth of U.S. parts for cars assembled there, Mr. Wildeboer said.

While Mr. Trump and administration officials have singled out auto makers that are shifting production to Mexico or elsewhere, none of the companies is shutting a U.S. plant in order to open one elsewhere.

Associated Graphic

Ford Edges are assembled in Oakville, Ont., in this 2015 photo. The five companies building cars in Canada import lots of parts from states that may have reason to oppose Donald Trump's tax proposal.

PETER POWER/THE GLOBE AND MAIL

Businesses eye expansion - even amid uncertainty
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By DAVID PARKINSON
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Tuesday, January 10, 2017 – Print Edition, Page B1


After two years of deep cuts in Canada's beleaguered resource sector, Canada's commoditylinked businesses are poised to start investing in expansion in 2017, a key Bank of Canada survey shows - but Donald Trump's election victory has added new uncertainties to the country's growing business confidence.

The Bank of Canada's quarterly Business Outlook Survey, released Monday, showed that the balance of business investment intentions - that is, the number of firms planning to increase spending on machinery and equipment over the next 12 months versus those planning to reduce spending - continued to improve since its previous survey released in October. The investment sentiment is at its highest level since mid-2014 - which was roughly when prices for oil and other key commodities began a deep dive that gutted profits for resource sectors and prompted companies to sharply reduce their capital spending.

The central bank said the latest improvement was largely due to fewer firms indicating that they intend to reduce spending. Nevertheless, it indicated that plans to increase spending have become more broad-based - and now include the resource sector, for the first time since the oil shock hit in late 2014.

"Commodity-linked businesses reported the need to invest following often significant cuts over the past two years," the survey report said.

"While plans to invest over the next 12 months remain more pronounced in Central and Eastern Canada, positive investment intentions are now evident in all regions and sectors, particularly among exporters."

An upturn in business investment is a critical cog in the Bank of Canada's vision for a full recovery in the Canadian economy, which has been hampered by the sharp downturn in spending in the resource sector and persistent economic uncertainties that have held back spending decisions in many other sectors.

In the central bank's October Business Outlook Survey, the bank had suggested that the resource sector and the Prairie provinces "are starting to see the end to cuts in investment budgets."

The new survey gives a stronger indication that resource investment has turned the corner as commodity prices have improved - which suggests Canada's economy may be headed for more broad-based health in 2017.

"The healing process continues," Toronto-Dominion Bank senior economist Brian DePratto said in a research note. "Today's report is consistent with an economy that has put the worst impacts of the oil shock behind it."

However, he cautioned, "If there is a fly in the ointment, it is the reported heightening of uncertainty in light of the U.S. election outcome."

The survey, involving senior management at about 100 Canadian firms across a wide range of industries, was conducted between Nov. 14 and Dec. 5 - shortly after Mr. Trump's surprise victory in the U.S. presidential election. The survey report included a special section on business leaders' expectations in light of the election outcome, in which the bank indicated that most businesses were still taking a wait-and-see approach, and "the large majority have not yet taken any action in response."

Some executives expressed heightened "uncertainty" about possible protectionist measures the incoming U.S. administration might impose and their impact on Canadian exporters to the U.S. market, the report said.

Others were optimistic about the potential upside from increased infrastructure and military spending and favourable policies for the energy sector.

Still, there was no evidence from the survey's main results that Mr. Trump's victory had altered the course of the business outlook for the next 12 months.

Expectations for sales growth for the next 12 months continued to improve and are at their highest levels in more than two years.

Hiring plans also continued to improve and are also showing the strongest readings in more than two years, although the central bank noted that resource-related firms remain reluctant to add significantly to current "bare minimum" staffing levels.

"Given the uncertainty, few firms reported concrete effects of the U.S. election outcome on their sales expectations for the next 12 months," the report said.

However, it's notable that the survey predated Mr. Trump's recent heightened rhetoric on trade via Twitter, which included threats to impose a steep "border tax" on auto makers making cars in Mexico for import to the U.S. market.

"This optimism could be tempered if signs emerge that increased trade protectionism is emerging from the Trump administration limiting Canadian exporters ability to benefit from the U.S. fiscal stimulus," Royal Bank of Canada assistant chief economist Paul Ferley said in a research report.

Trump Toronto hotel put on block
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Financially troubled building hits market as hospitality properties become a hot commodity in Canada
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By ANDREW WILLIS
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Thursday, January 12, 2017 – Print Edition, Page B1


Trump International Hotel & Tower Toronto is looking for a new owner, with creditors hoping that strong investor interest in Canadian hospitality properties can rescue a development that proved to be a money pit for its original backers.

The court-appointed receiver for the Trump hotel formally launched the sale of the 65-storey tower on Tuesday, with CBRE Ltd.

as its real estate agent and a $298-million minimum price tag on a development that cost more than $500-million to build. The original owner, billionaire Alex Shnaider's real estate company Talon International Development Inc., handed the keys to lenders last year after defaulting on a loan.

The Trump hotel opened in 2012 and has been plagued by a complex, controversial structure: 94 of its hotel rooms and condominiums are owned by outside investors and are not part of this sale. The hotel has also suffered from competition in Toronto from newly-opened rivals that are part of larger global chains, such as Four Seasons Hotels Ltd., Ritz-Carlton owner Marriott International Inc. and Shangri-La Hotels and Resorts.

Potential buyers of the Trump hotel pick up a property with 211 hotel units and 74 condominiums that did not find buyers when Talon was the owner, and this unsold inventory is part of the reason Mr. Shnaider lost money on the development.

Purchasers of the Trump hotel also inherit incoming U.S. president Donald Trump's company as the property's operator, as Trump Toronto Hotel Management Corp. provides marketing, reservation and housekeeping services at the 261-room hotel.

That may weigh on the potential price, as sources in the hospitality industry said the Trump brand is tarnished by the founder's controversial political stances, and rival hotel firms have more robust reservations systems and customer loyalty programs.

Toronto real estate executives say the hotel faces significant challenges and the property may be better suited to a 100-per-cent condo development, a conversion that would lower the value and take years to complete.

However, creditors are selling the property at a time when domestic and foreign investors are paying premium prices for Canadian hotels. In 2016, investors set records for the prices paid on hotels and the value of transactions taking place, with $4-billion of hospitality properties changing hands.

"It's hard to recall a better time for the Canadian hotel industry and for Toronto in particular," said Bill Stone, executive vice-president of CBRE.

He added: "Opportunities to acquire such a prominent trophy asset in Toronto's financial core are extremely rare."

There are approximately $1.8billion of hotel properties currently for sale in Canada, according to CBRE's data. Other marquee properties on the market include downtown Toronto's Westin Harbour Castle, which is being sold by another real estate brokerage and expected to fetch more than $300-million. CBRE research shows that Toronto is the country's hottest hotel market, with double-digit growth in key financial measures last year: Average daily rates for hotel rooms in Toronto increased 10.3 per cent in 2016 and revenue per available room jumped 15.6 per cent.

The Trump hotel is expected to attract interest from investors ranging from wealthy individuals to pension plans and foreign sovereign wealth funds. CBRE is starting the sales process by pitching more than 500 potential buyers. The sales process is expected to play out quickly.

Initial bids for the Trump hotel are due in mid-February and binding offers that include a five per cent down payment must be made in early March.

This is a court-supervised sale that is being run by receiver FTI Consulting Canada, which has struck a minimum "stalking horse" bid of $298-million on the Trump hotel from a private real estate fund, JCF Capital ULC, which is the property's biggest creditor, after acquiring loans from the Trump hotel's original backer, an Austrian bank. If no other buyer emerges, JCF Capital will acquire the property.

Even at that minimum price, the sale of the Trump hotel would set a new high-water mark in Toronto, as the most expensive hotel purchase to date was the 2016 sale of the newly built Four Seasons property in Toronto for $225-million - the buyer was Shahid Khan, billionaire owner of the NFL's Jacksonville Jaguars and Britain's Fulham soccer club.

Associated Graphic

Potential buyers would be picking up 211 hotel units and 74 condominiums that went unsold under previous ownership.

IAN WILLMS/THE GLOBE AND MAIL

The unlikely victors
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A trio of Aussies excited to join world No. 1 Day at the Tournament of Champions
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By DOUG FERGUSON
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The Associated Press
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Saturday, January 7, 2017 – Print Edition, Page S2


KAPALUA, HAWAII -- The winners-only field at Kapalua, Hawaii features four Australians, which is not unusual.

It's who they are.

"Yeah, Jason, I'm surprised he's in here," Rod Pampling said with a laugh.

Jason Day, the No. 1 player in the world, might be the only Aussie in the SBS Tournament of Champions that anyone recognizes.

Pampling has been to Kapalua twice before, though it has been 10 years since his last appearance.

He won the Bay Hill Invitational in 2006 for his second PGA Tour victory. The longer he stayed away, the more he had reason to wonder if he would ever get back.

And then he won in Las Vegas, ending a drought of 218 tour events without a trophy.

Ditto for Aaron Baddeley, who had no idea what was wrong with his swing two years ago. He started last season with limited status, got into enough events to find his rhythm and won in a playoff at the Barbasol Championship opposite the British Open.

As for Greg Chalmers?

He had never won in 381 starts on the PGA Tour and had lost his PGA Tour card in 2014. The 43year-old Australian was playing the Web.com Tour, and the only reason Chalmers got into the Barracuda Championship in Reno, was because it was opposite a World Golf Championship. Chalmers has made at least 150 cuts on tour and is classified as a veteran member.

At No. 490 in the world, he had the worst ranking of any PGA Tour winner last year.

Showing up at Kapalua, looking down the fairway at the expanse of the Pacific and feeling the tropical air on his cheeks was the latest reminder of his victory, and how quickly lives and careers can change.

"This is unbelievable," Chalmers said. "Twelve months ago, I was getting ready to go to Panama for crying out loud, and struggling to get status on the Web.com."

This is the good life, and they appreciate it more than most.

Chalmers first joined the PGA Tour in 1999, the year David Duval rose to No. 1 in the world and when the Tournament of Champions was first held at Kapalua. He had won the Australian Open and the Australian PGA Championship twice each.

Still, it was frustrating to not be able to win on the strongest tour in the world. He had only a pair of runner-up finishes in his career, most recently to Tiger Woods in the 2009 Buick Open.

"Look, what I keep saying is that not everybody wins," he said. "There are 200 guys on this tour and only 30-odd winners every year. We're spoiled with some top players who win multiple times. They make it look easy, but it's not. When you get it done, it's very exciting."

Pampling had not felt the Sunday nerves in the United States since he finished one shot behind Phil Mickelson at Colonial in 2008. He opened with a careerbest 60 in Las Vegas, lost the lead with a 71 on Saturday and then held his own against Brooks Koepka and Lucas Glover down the stretch.

The rest was a blur. Pampling rushed to the airport, arrived home to Dallas in the early morning hours and was up before dawn.

"I watched the tournament - my wife had taped it - and I was double-checking to make sure it happened," Pampling said. "It's daunting to look down at your phone and see that you've got 300 text messages. But man, it's good." Baddeley once was Australia's brightest young star. He was an 18-year-old amateur who took down Greg Norman and Colin Montgomerie to win the Australian Open in 1999, and he won his national open the following year as a pro. He won three times on the PGA Tour, including at Riviera in 2011. But his swing got out of whack and he couldn't figure out how to fix it until hooking up with Scott Hamilton in the summer of 2015.

The rest was a matter of being patient, even after missing his card at the Web.com Tour finals last year and deciding to use his past champion's status to get by.

"I thought I could get 11 or 12 starts, maybe get an invite or two, and I was playing well enough to finish in the top 10 and play my way into other events," Baddeley said. "People around me were more stressed than I was. I was like, 'Relax, it's okay.' " He won in a playoff over Si Woo Kim, and life was good again.

All three Aussies cited the biggest perk as being able to set a schedule as a PGA Tour winner.

They don't have to worry about which tournaments they might get in, sometimes only knowing at the last minute.

Pampling is the only one who secured a spot in the Masters with his victory because it wasn't held opposite a bigger event.

And that other perk? Being in Maui, Hawaii to start a new year.

Chalmers was asked if he or Pampling would be more thrilled to be at Kapalua, and it was an easy answer. Pampling had been here before.

"And he already had a [PGA Tour] card," Chalmers added.

"But I would say at this stage in our careers, both of us are very, very grateful."

Associated Graphic

Australian Aaron Baddeley will play the SBS Tournament of Champions this year after winning the Barbasol Championship last year.

CLIFF HAWKINS/GETTY IMAGES

UBC retires number for goalie lost to suicide
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Friends, family and teammates remember a strong mentor and outspoken advocate for reducing stigma around mental health
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By JOSHUA CLIPPERTON
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The Canadian Press
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Friday, January 6, 2017 – Print Edition, Page S2


VANCOUVER -- Sitting a few metres from the rink where she and the rest of the UBC Thunderbirds women's hockey team celebrated last season's league title, Mikayla Ogrodniczuk's brave front shows a tiny crack.

The defenceman is sharing stories about goalie Laura Taylor, a friend and confidante who always had a smile on her face and knew how to make others laugh.

"She was full of wisdom," said Ogrodniczuk, her eyes starting to glisten with tears. "We knew that we could always go to her, no matter what."

But most of UBC's players had no idea Taylor spent nearly half her life dealing with bipolar disorder and crippling depression.

Her suicide on April 7, 2016, just days before her 34th birthday, came as a devastating shock.

"She just carried herself so well," head coach Graham Thomas said as he leaned forward to survey the ice where Taylor used to practise. "There was never really any kind of signs ... nothing really jumped out at us."

UBC will honour Taylor before Friday's home game by retiring the Kelowna, B.C., native's No. 29 jersey with 60 family and friends in attendance.

The goal is to not only reflect on the life of a daughter, sister, aunt, friend and teammate, but to also keep the dialogue about mental health open.

"I think she would want to be remembered as someone with a lot of strength," said defenceman Kelly Murray. "That's part of the reason this is so important to us - we want people to realize that just because you're struggling with something doesn't make you weak.

"Being able to admit you need help and say you struggle with something makes you stronger."

Taylor's family took the lead almost immediately after her death, asking in the obituary for people to "please reach out to someone you may feel is hurting emotionally."

"Laura would not love us putting her out to the world," her sister Heather Taylor said in a phone interview from Calgary before heading to Vancouver.

"When she died we had to make a decision, and we decided that we don't want this to happen to another family."

A medical student, Taylor was outspoken about ending the stigma around mental illness, but stayed mostly private about her struggles. The Thunderbirds even talked about the issue as group before last season, and while a teammate shared her own story, Taylor remained silent.

"She had a huge heart and spent a lot of time and energy, sometimes which she really didn't have to give, to try and reach out and help others," said her sister, who along with their father is a family physician.

"It really added something to her life. She would have been a great doctor.

"She was so bright, so smart. It was really a waste."

Taylor was diagnosed as bipolar in her first year of university at the University of Saskatchewan, where she also played hockey, in the early 2000s.

"There would definitely be times when she was feeling better, meaning not depressed," said Heather Taylor. "And there were times when every moment was probably a pretty big struggle just to get out of the house.

"She spent a good chunk of her life hanging out with doctors ... just trying to co-exist with the disease."

Her sister said that while Taylor was at a higher risk for suicide, she had been in a good place the last few years.

"We were really blown away," she said. "She was really forward-oriented in her plans."

For instance, Taylor called Thomas out of the blue in the summer of 2015 to see if there was any room for a practice goalie at UBC. The Thunderbirds already had three netminders, but when one veteran abruptly backed out, a spot needed to be filled.

"It didn't take her too long to think it through," said Thomas, whose team won last season's Canada West crown before finishing second at the national tournament. "She was very mature and very dedicated."

Taylor knew there wasn't much playing time to be had - she got into a couple of exhibition games - but one of her aims was to mentor younger teammates.

"We struggle with taking four classes and getting to the rink on time," Murray said. "Here she is, a full-time med student working shifts at the hospital, and still coming to practice.

"She was definitely an inspiration."

It's difficult for Taylor's family to talk about the person they've lost. They know Friday will a tough day, but they also know it's the best way to honour her memory.

"We're not going to get rid of stigma if we hide," said Taylor's sister. "If we can change someone else's experience with their mental illness by talking about this and making it okay to talk about, maybe we save someone's life.

"If no one talks about suicide or no one talks about mental illness, we will never make changes."

Associated Graphic

Laura Taylor, shown in net for the UBC Thunderbirds, took her own life last April after struggling with bipolar disorder. To honour her memory, the university will retire her jersey number on Friday.

WILSON WONG/THE CANADIAN PRESS

Playoff hopes high in Toronto at halfway point
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Nearly 40 games into the season, a blend of rookies and veterans has the Leafs achieving beyond expectations
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By JONAS SIEGEL
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The Canadian Press
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Friday, January 13, 2017 – Print Edition, Page S1


TORONTO -- Maple Leafs general manager Lou Lamoriello likes to say that when it comes to managing an NHL team, there's a five-year plan that changes daily.

Lamoriello acknowledged this week that the Leafs are running in front of that ever-shifting timeline as the season's halfway point approaches. The team is on pace for 93 points, a substantial 24point jump from last season when they finished with a leagueworst 69.

"I would say we're a little ahead of where we might have thought we could [be], but [that's] really not saying that we shouldn't be here," Lamoriello told The Canadian Press in an interview during the Maple Leafs' bye week. "You don't know how quickly some of the young players will adjust and you also have to be very careful when you respond to a question like that at this time in the year, after a little under 40 games."

Rapid adjustment from Toronto's youth has been the driving force of success in the first half.

It starts with Auston Matthews, who became the youngest Leafs all-star in 31 years earlier this week. He's on pace for not only the greatest rookie season in franchise history, but one of the best ever for a first-year NHL player.

Matthews took over No. 1 centre duties from Nazem Kadri in late December and is leading the Leafs with 21 goals and 35 points (a 44goal, 74-point pace). He's also averaging almost 18 minutes of ice time a game - tops among Toronto forwards - playing alongside fellow rookies Zach Hyman and Connor Brown.

Matthews met head coach Mike Babcock's confident projection of "dominant" centre-status by Christmas, stringing together 15 goals and 22 points in the past 20 games. "I think he's right," Matthews said earlier this week. "I feel I'm playing well. I feel like I can be a dominant centre."

Lamoriello said the Arizonanative has demonstrated "complete player" potential already, noting his willingness to work as hard at defending as he does at producing offence. "In other words, what the end result will be only time will tell, but right now he has certainly shown that he can take quality minutes and he can be counted on in key situations," Lamoriello said.

"I think that he's done maybe more than we might have expected if that's the answer you want."

Matthews and fellow 19-yearold Mitch Marner (32 points) are both actually on track to break Peter Ihnacak's 34-year-old record for points by a Leafs rookie (66).

Marner, from Thornhill, a suburb north of Toronto, leads the team with 22 assists and has showed spunky creativity on a line with veterans Tyler Bozak and James van Riemsdyk.

Babcock, notably, hasn't played them together because he says Marner has already shown himself capable of driving his own line.

Lamoriello spotted something in Marner at training camp that suggested he would not only stick with the big club for the whole season, but also become an impact player. It was a sense that Marner, following a dominant season in the Ontario Hockey League, was "comfortable in his own skin" more than a year after he was picked fourth over all at the 2015 draft.

"He's just going to get better and better," Lamoriello said.

Beyond that, the Leafs have had other significant rookie contributions: defenceman Nikita Zaitsev is averaging 22 minutes a game on the top pairing; Hyman has produced 18 even-strength points and has been strong on the penalty kill; Brown has nine goals and 18 points while William Nylander is among the NHL leaders with 15 power-play points.

Players such as van Riemsdyk (33 points), Bozak, Kadri (16 goals), Jake Gardiner, Leo Komarov and 22-year-old Morgan Rielly have also had solid seasons and it's that combination - veterans performing to expectations and young players improving - that Lamoriello credits for the team's strong performance alongside the Babcock-led coaching staff.

Indeed, Babcock has the Leafs boasting a top-10 power play and penalty kill, positive goal differential (plus-four) and puck possession numbers in the top half of the league.

There are troublesome signs as well: Toronto gives up lots of shots and chances, leans heavily on goaltender Frederik Andersen (33 starts) and often lets leads slip away. In addition, the Leafs have not had to deal with any significant injuries over the first half.

If Andersen, in particular, slows down following a dominant November and December (.939 save percentage), or his new backup Curtis McElhinney struggles, the Leafs' pace could just slow enough to miss out on the postseason.

Playoffs weren't really supposed to be in the cards this soon, so even contention would demonstrate real progress.

Lamoriello said the Leafs "know how quickly things change."

"In other words, we have to be careful," he said. "We can't get high, we can't get low. But we certainly feel good about the direction that we're going and not getting off really the course of what has to be done to have success."

Therrien accumulates milestones - and wins
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By SEAN GORDON
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Tuesday, January 10, 2017 – Print Edition, Page S1


MONTREAL -- The human condition tends to improve when one has something to look forward to, which is why milestones in sports are fun.

On Saturday, Montreal Canadiens coach Michel Therrien topped a peak that only 34 other NHL coaches have scaled, recording his 400th career win, in his 796th game (of the 13 active bench bosses ahead of him on the list, only the Minnesota Wild's Bruce Boudreau has fewer seasons under his belt).

Therrien wasn't overly enthusiastic: "Of course it's a nice accomplishment for a coach, but there are much greater heights.

Ask any coach."

He's right, of course; whenever a summit is reached, others soon heave into view.

At some point in the next couple of weeks, he'll overtake Jacques Demers, the most recent Habs coach to hoist the Stanley Cup, on the all-time victories list. Barring a stunning reversal of fortune, he'll then become the longest-serving Montreal coach since the legendary Scotty Bowman shoved off in 1979; and Therrien's second stint with the club will eclipse the late Pat Burns' 320 games before the current season is out.

Pretty good for a muchmaligned coach, right?

Because make no mistake, the opinion that Therrien weighs on his club like an X-ray apron is widespread. There are even statistical analyses to support it.

Thing is, his team just keeps on winning.

Results-based analysis is perilous - would the Habs be even better with someone else in charge? - but even the loudest critics must allow that the Canadiens, through half the schedule, are a very good hockey team.

And some of it has to do with Therrien.

The Canadiens have won just one more game than they've lost since the beginning of December (9-4-4), but that's pretty good.

And consider the Habs have used 30 different players through 41 games, resulting in a cascade of minor-league signings as they ransack their farm system.

Yet, the club has played its sharpest, most consistent hockey since the injuries to top centres Alex Galchenyuk and David Desharnais kicked off a parade to the treatment room.

The injury crisis is easing - just in time for a stretch of eight games in 13 days.

The familiar trope is that the team's success is a function of the health of goalie Carey Price's knees, hips and ankles. But while that's generally true, Price is coming off his second-crummiest statistical month since 2012.

Conveniently, it happened as the Habs became puck-possession monsters. Shooting metrics track fairly closely with sustained success, and according to stats database Corsica Hockey the Habs are second in the NHL when it comes to generating shots and third over all when you consider the differential with shooting attempts allowed.

In other words, elite.

Therrien is known for playing hunches, and at least two have led to heavy payouts recently.

Waiver claim Paul Byron is on a 25-goal, 50-point pace, and handing the keys to the top line to 23year-old Phillip Danault - not an obvious candidate for the job - was inspired.

Players report more video instruction and one-on-one sessions - at odds with the criticism from several former players that Therrien doesn't communicate much.

He has been canny with the practice schedule, prioritizing recovery.

"You have to credit the coaching staff for that," defenceman Nathan Beaulieu said. "The teams that go far aren't necessarily the best teams all year, but the ones who stay healthy and have energy in the playoffs."

Continuity and having the right horses for the right courses have helped - summer arrivals Alex Radulov and Shea Weber are both Therrien's kind of player - and so has the sterling performance of established players such as Jeff Petry and Torrey Mitchell.

Therrien famously leans on veterans, but youngsters such as Beaulieu and Danault and rookies Artturi Lehkonen and Michael McCarron all occupy key roles. So much for the old saw that Therrien can't coach younger players.

As befits a man who was given a reprieve last season under circumstances that usually lead to a firing - full collapse, missing the playoffs - there are signs Therrien is evolving.

Is he still the old-school guy who once drove his players to the puking point and beyond at a practice in Pittsburgh? He is.

Compulsive line juggler? Sure.

Wound tight? Yup.

The special teams continue to be iffy, and you can quibble with his player deployment and ice time, but it's getting hard to argue against the job Therrien is doing. He has largely avoided the obvious game mistakes he was criticized for a year ago. He's shown tactical flexibility. He's made adjustments.

It could all still end in tears and moving boxes, and at some point it will.

In the meantime, the scrappy Montreal native will keep the focus on winning, thank you very much. It's taken him this far.

Rockets bring their three-ring circus to Toronto
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By ROBERT MACLEOD
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Monday, January 9, 2017 – Print Edition, Page S1


TORONTO -- The three-point attack has been the Houston Rockets' red glare this season, with the long-distance shot lighting up NBA scoreboards at a record-setting pace.

Houston brought its three-ring circus to Toronto's Air Canada Centre on Sunday night looking to extend a seven-game win streak at the expense of the Raptors, still stinging from a demoralizing overtime loss the night before in Chicago to the Bulls.

But Houston struggled with its stock in trade early on Sunday and appeared doomed, sinking just two of 17 from beyond the arch to trail the Raptors.

The Rockets found their shooting eye in the second half and, led by a sublime 40-point, 11assist, 10-rebound effort from guard James Harden, roared back for a convincing 129-122 victory over a visibly tiring and frustrated Toronto outfit.

The win was the eighth in a row for the Rockets (30-9). The Raptors (24-13) lost their second in a row and their fifth in their past seven.

Toronto carried a 99-95 lead into the fourth quarter but it was quickly erased by the Rockets, who opened with a stinging 17-1 run, paced by a couple of threepoint strikes by Trevor Ariza, to seize a 112-100 advantage.

Toronto got to within five points on a couple of occasions but did not have enough left in reserves to make any more of a dent than that. And when a driving layup by Patrick Patterson with just under four minutes left was negated after he plowed into Harden for an offensive foul, it signalled the unofficial end to Toronto's long night.

"They just put their heads down and attacked out feet," Toronto coach Dwane Casey said about Toronto's letdown at the start of the fourth. "We played good basketball for, what, 39 minutes. But it's a 48-minute game. We got to extend that."

DeMar DeRozan scored 36 points to lead the Raptors, the 18th time he has scored 30 or more this season, but it was far from enough.

DeMarre Carroll was sharp, scoring a season-high 26 points including a career-best six threepointers.

Along with Harden's tripledouble - he had a quadruple double if you count his 10 turnovers - the Rockets were also paced by 28 points off the bench by Montrezl Harrell, who hit 12 of his 13 shots from the floor.

As have been the hallmark of teams coached by Mike D'Antoni, the Rockets are one of the most offensively dynamic teams in the NBA.

And they have embraced the concept of the three-point shot like no other.

"He should probably be smiling all the time because everybody now is trying to play like that," Casey said before the game.

Coming in, almost 40 per cent of Houston's points are scored via the three-pointer, by far the highest rate in the NBA. The Rockets have made 570 from beyond the arch - well over 100 more than their nearest rival.

The Rockets average 15 made three-pointers each game and have hit the 20 mark on five occasions, so teams have a pretty good idea what they're going to face against Houston.

Sunday against the Raptors they were not as sharp, making just 11 of 38 of their three-pointers.

The Raptors were optimistic of a better result after welcoming Patterson back after the 6-foot-9 versatile forward missed the previous four games nursing a sore knee.

While the Raptors were being demoralized by the Bulls in Chicago Saturday night, losing 123118 in overtime, the Rockets were already cooling their heels in Toronto, resting up.

The Rockets sputtered with their long-distance attack in the opening quarter, going just 1-for-8, and the Raptors capitalized with a more versatile attack to carve out a 37-27 lead.

Houston's shooting woes continued into the second quarter where Eric Gordon served up an air-ball from three early on, dipping Houston's success rate to 1-for-11.

Toronto extended its lead to 12 points with about two minutes left in the second quarter.

But the Rockets closed the gap with a 12-2 run, including a buzzer-beating three from Ariza, to cut Toronto's lead to 63-61 by the half.

The three-point floodgates opened in the third quarter with both sides pouring it in, led by Carroll, who hit four of four that helped lift Toronto into a 91-82 lead.

But the Rockets fought back and a Harden three at the buzzer, his third of the frame, cut Toronto's lead to 99-95 heading into the fourth quarter.

Associated Graphic

DeMar DeRozan, left, soars to the net during Sunday's game against Houston. DeRozan put up 36 points, the 18th time he has scored 30 or more this season, but it wasn't enough to stop the Rockets.

FRANK GUNN/THE CANADIAN PRESS

Raptors humiliate Knicks in dominant home performance
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By ROBERT MACLEOD
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Monday, January 16, 2017 – Print Edition, Page S1


TORONTO -- Early in the third quarter, a disgruntled Joakim Noah of the New York Knicks was handed a technical for grousing about some non-call and DeMar DeRozan sank the free throw for the Toronto Raptors.

The meltdown was officially on. What followed was an embarrassment by the Knicks, a total capitulation featuring a litany of egregious defensive blunders and an all-around unwillingness to even to try to compete.

The result was an emphatic 116101 victory by the Raptors (27-13) at Air Canada Centre on Sunday afternoon, their third win in a row to inch closer to the Cleveland Cavaliers' perch atop the Eastern Conference standings.

After DeRozan's free throw, Toronto's DeMarre Carroll stripped the ball from a confused Willy Hernangomez near midcourt and waltzed all the way to the basket for an easy dunk.

Hernangomez was victimized later for another turnover, this time by Toronto's Lucas Nogueira.

The ball wound up again in the hands of Carroll, who finished with 20 points, and he capitalized with a bank jumper to increase Toronto's lead to 80-56.

A goaltending call resulted in another Toronto basket, and on it went. At one point the Toronto lead had stretched to a ridiculous 38 points.

It was fitting that the quarter ended with New York guard Brandon Jennings losing his dribble as the Knicks were trying to set up for the final shot.

The Raptors' aggressive play at both ends of the court certainly played a large part in the unravelling of the Knicks, who lost for the 10th time in their past 12 outings and displayed shocking lethargy over large stretches of Sunday's game.

"I was really proud with the way the starters came out and really set the tone, especially starting the third quarter, which has usually been our Achilles heel," Toronto coach Dwane Casey said.

"We came out, set the tone defensively and built a 30-point lead.

"My hat's off to those guys."

DeRozan led the Raptors with 23 points while Norman Powell contributed 21 off the bench. Jonas Valanciunas had 12 points and 16 rebounds.

Carmelo Anthony had 18 to lead the Knicks.

The numbers from the 12 minutes of horror perfectly sum up New York's ineptitude in the third.

The Knicks were outscored 27-8, making just four of their 21 shots, and committed seven team turnovers.

By holding the Knicks to just eight points, the Raptors tied their franchise low for points allowed in the third quarter.

"They were not thinking defence, they were thinking offence and our offence wasn't going," Knicks coach Jeff Hornacek said about the third-quarter debacle. "I don't know if it's giving up. You can ask them that."

DeRozan and Carmelo Anthony both carded 10 points in the opening quarter when the Raptors emerged with a 27-26 lead, despite shooting just 37.5 per cent (9 of 24).

The Raptors began to assert their offensive might in the second quarter with Terrence Ross draining an early three-pointer.

Lowry followed suit shortly after while doing what he does best - drawing contact from Mindaugas Kuzminskas, who was dinged for a foul.

Lowry sank the free throw to complete the four-point play, which lifted Toronto in front 3626.

The Raptors' lead extended to as many as 16 before they settled for a 69-54 lead in a first half in which they made eight of their 16 from long distance.

In the third quarter, the game swung mightily for Toronto, which took a commanding 96-62 lead into the fourth, when Casey had the luxury of being able to give his starters plenty of rest.

Even the little-used Bruno Caboclo got into the game in what was a mercy substitution with just 10.9 seconds left.

Caboclo walked on the court and watched as teammate Cory Joseph dribbled out the remaining seconds.

The Raptors have already proved they can score with the best of the NBA. Against the Knicks they held a 66-30 advantage in points scored in the paint.

But the Raptors' defensive play has also picked up. On Sunday, Toronto held New York to less than 43-per-cent shooting while committing nine steals.

Casey said the Raptors are not going to become a defensive juggernaut overnight.

"But the way we played in the third quarter has got to be our disposition, at least make people feel us.

"If we're just going through the motions trying to win 50 games - cool," Casey said. "But if want to do something important we got to make sure we play like we did in the third quarter."

Associated Graphic

The Raptors' DeMar DeRozan, right, shoots over New York Knicks Derrick Rose and Joakim Noah at the ACC on Sunday.

DAN HAMILTON/USA TODAY SPORTS

Late surge lifts Toronto over Brooklyn
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After playing the league's best recently, Raptors started slowly against lowly Nets
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By ROBERT MACLEOD
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Saturday, January 14, 2017 – Print Edition, Page S4


TORONTO -- After a steady diet contesting the league's upper echelon, the Toronto Raptors are moving into a seemingly more palatable portion of their schedule, where they will be the hunted instead of the hunter.

It should represent a bit of a break for the Raptors, whose motor has been churning at a higher clip than the cartoon Road Runner in the first 10 weeks of the NBA season.

Even Dwane Casey, the cagy Toronto coach who is loath to admit anything that would constitute bulletin-board material for the opposition, will admit that the next segment of the schedule might represent a good opportunity to string a few wins together.

"It's really important," Casey said on Friday, quickly adding: "You can't look at teams records; you can't look at what they've done in the last five games. We've got to look at what is in it for us?" The sad-sack Brooklyn Nets, who have won just eight times and lost five in a row heading into Toronto, were the first of the bottom-feeders to meet the Raptors during this supposed down time, Friday night at Air Canada Centre.

It took some doing but the Raptors (26-13) finally came around after three rather lacklustre quarters, parlaying a solid final frame into a 132-113 victory over the Nets (8-31).

It was anything but easy as the Nets utilized a solid outside shooting game - hitting 13 of their first 27 three pointers - to keep the Raptors within their sights with Toronto leading just 90-89 heading into the fourth.

The Raptors responded with a rapid-fire attack, exploding on an 11-0 run to start the final frame.

It was capped with back-toback-to-back three pointers by DeMarre Carroll, Kyle Lowry and Terrence Ross that lifted the Raptors into a sudden 101-89 stranglehold before two minutes had elapsed and Toronto never looked back. DeMar DeRozan led all scored with 28 points but had to work for it, knocking down 11 of his 22 shots in Toronto's highest-scoring game this season.

The schedule maker dealt the Raptors a cruel beginning to the 2016-17 NBA schedule. The team has already slogged through two rugged road swings over the first two months - one of five games and the other six - that took them though all the high-rent districts of the Western Conference.

The Raptors also had to endure one of the most brutal back-toback affairs in recent memory in mid-November, starting with the NBA champion Cavaliers in Cleveland before hightailing it back home to Toronto to greet NBA finalist Golden State Warriors. The Raptors lost both of those.

The fact that the team is continuing to challenge the Cavaliers for the best record in the East is a testament to the Raptors' intestinal fortitude - not to mention the deadly dynamic duel of Kyle Lowry and DeRozan.

Beginning with the Brooklyn tilt, the Raptors are heading into a bit of a lull with their next five games also against teams of dubious distinction, beginning on Sunday at home against a New York Knicks outfit that started play on Friday four games below .500.

After that the schedule takes Toronto into Brooklyn for a return engagement against the Nets on Tuesday.

That will mark the start of a three-game trip in which they play a woeful Philadelphia 76ers outfit before heading into Charlotte to meet the Hornets, who at least are contesting for a playoff spot in the East.

Then it is back home on Jan. 22 to play the Phoenix Suns, vying for the worst record in the West this season.

The Raptors received some good news earlier on Friday when they got word from their medical team that Jared Sullinger and Delon Wright have been cleared to begin practising.

The pair has been out all season recovering from surgeries - Sullinger, a 6-foot-9, 260-pound power forward, to his left foot, and Wright, a 6-foot-5 guard, to his right shoulder.

Now the big task will be getting the two back into game shape, no easy feat with the Raptors having to play 10 more games until the end of the month, putting practice time at a premium.

It was a herky-jerky opening half Friday night with a lot of offence in which the Raptors emerged with a 54-53 lead.

The Nets connected on eight of their 17 three-point attempts, the primary reason for the close score.

The Nets would extend their lead to as many as six at 77-71 in the third quarter and that caught the attention of the Raptors. They finished with a flourish to take a nervous 90-89 lead into the final frame.

Hall returns to find Edmonton changed
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By DEAN BENNETT
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The Canadian Press
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Thursday, January 12, 2017 – Print Edition, Page S1


EDMONTON -- Taylor Hall returned to Edmonton on Wednesday to a rink he never played on as he prepared to face an Oilers team that embraced him in the down years only to dump him to get better.

Hall said the initial frustration, and the bitterness, is fading.

"A lot of guys want to be traded. A lot of guys are anxious to leave their teams. I wasn't," Hall said after he and the other New Jersey Devils finished practice at Rogers Place.

"[But] in saying that, I'm really enjoying my time in Jersey.

They've made me one of their key guys and it's on me to produce and play well, and I enjoy that pressure."

Thursday night's game between the Oilers and Devils will be Hall's second meeting with his former team since he was swapped for defenceman Adam Larsson in a blockbuster trade last June 29. The Devils lost 2-1 last Saturday to the Oilers in New Jersey.

It will be his first game as a visitor in Edmonton, however, and his first in the Oilers' new downtown arena.

Hall said the new arena makes it easier to come back, as the old Rexall Place had six years of memories.

"It's not like we had Stanley Cup parades here in Edmonton.

There was a lot of losing, a lot of dark times. But through all those dark times I really enjoyed my time here," he said.

"I always enjoyed playing in front of fans in a sold-out building every night. That was a great experience to start my career."

For five of his six seasons, Hall was the linchpin forward and marquee draw for the Oilers.

He was drafted first over all in 2010 and there was much ballyhoo. Fans bought stuffed Taylor Hall dolls. His 1,000-watt smile was on billboards and marketing campaigns. Retired Oiler great Kevin Lowe gave his blessing to un-retire his No. 4 jersey for Hall to wear.

He scored goals in bunches - 132 in six seasons - while racking up a medical chart full of injuries, including a gruesome skate blade to the scalp during pregame warmups in 2012.

But the bottom line was the Oilers have missed the playoffs every year since 2006, due mainly to a minor league blueline corps.

A big trade was needed. The Devils had defence and no offence and the Oilers had the reverse, so Oilers general manager Peter Chiarelli pulled the trigger.

It did not go over well.

Fans on sports call-in shows ripped Chiarelli as a rube, fleeced into giving up a franchise player for a strong defenceman but a nonetheless lower-ranked commodity.

The vitriol on Chiarelli has evaporated to some degree now that the Oilers, led by a revamped defensive corps and the strong play of goaltender Cam Talbot, sit 10th in the NHL and are in the thick of the fight for a playoff spot in the Western Conference.

Larsson has proven to be as advertised, stabilizing the blueline and getting pucks up to blazing forwards such as Connor McDavid.

"Larsson's a rock back there.

He's been so good defensively for us. He brings it every night," McDavid said.

Head coach Todd McLellan said the Hall trade was part of a larger transformation starting with Talbot, but extending out to all positions.

The Oilers have allowed 2.67 goals a game, putting them 16th in the NHL. Talbot has 20 wins and a .917 save percentage.

"We're playing better as a group defensively," McLellan said.

The Devils, meanwhile, now live where the Oilers used to call home, languishing 27th over all in the 30-team league.

Hall, despite missing 10 games with a knee injury, is tied for the team scoring lead with nine goals and 25 points.

Oilers forward Jordan Eberle came up with Hall and they shared living accommodations for a while.

"For him individually I think it will be kind of a weird night for him," Eberle said.

"He's a good player. It's tough to see him go but I think we're better as a team, and he's doing well there [in New Jersey].

"In hockey there's a lot of that.

Guys get traded. You lose friends.

But it's a business. It's part of the game."

Associated Graphic

Taylor Hall of the Devils skates during practice in Edmonton on Wednesday ahead of a game against the Oilers this week. The game will be Hall's first return to the city since being traded.

JASON FRANSON/THE CANADIAN PRESS

Rookies Matthews, Laine added to all-star divisional rosters
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By RACHEL BRADY
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Wednesday, January 11, 2017 – Print Edition, Page S1


TORONTO -- After dazzling starts to their rookie seasons, the top two picks in last June's NHL draft have both been awarded all-star nods.

Less than seven months after the Toronto Maple Leafs selected Auston Matthews first over all and the Winnipeg Jets chose Patrik Laine, both teenagers were among the players named Tuesday to four 11-man divisional rosters for the annual showcase, to be held this month in Los Angeles.

Matthews, a 19-year-old American, and Laine, an 18-year-old Finn, are currently tied for the lead among rookies with 21 goals each. Only Sidney Crosby (26 goals) and Jeff Carter (22 goals) have scored more than the two superrookies this season.

After scoring six goals in his first six NHL games - including four in his jaw-dropping debut - Matthews had 13 straight scoreless games. But that drought ended in late November when he caught fire again. He has scored 15 goals and has 22 points in his past 20 games, including the dramatic overtime winner at Toronto's Centennial Classic outdoor game on New Year's Day. The Arizona-raised centre leads the Leafs with 35 points through 39 games.

"I'm really looking forward to meeting all the players, guys I grew up watching like Patrick Kane, Jonathan Toews - all the superstars in this league that myself and other guys look up to," Matthews said during a teleconference held after the selections were announced. He was speaking from Florida, where he's relaxing with some teammates during a small break for the team.

He will be the Leafs' youngest all-star since Wendel Clark was selected 31 years ago.

"I'm really looking forward to the whole experience," Matthews said.

Laine's participation in the allstar weekend is questionable after he suffered a concussion in Saturday's game against Buffalo, the result of a scary hit by Sabres defenceman Jake McCabe. If Laine can't go, Winnipeg forwards Mark Scheifele or Nikolaj Ehlers are possible replacements.

The three Jets are tied for the team lead in points with 37.

"What a great honour for such a young man. He's earned it. He's such an exciting player to watch," Winnipeg head coach Paul Maurice said of Laine.

"Certainly a 3-on-3 format would be fun to have him in it. We're hopeful he can go.

It very probably won't be his last."

Laine is sidelined with no current timetable announced for his return, so he has not been speaking to the media. His teammates reacted to the selection though.

"It's not surprising to me," veteran forward Mathieu Perreault said. "I think, with the pace of the goals he's been scoring and the ways he's been scoring his goals, the skill set that he has, he definitely deserves to be in that game."

Each division - Pacific, Central, Atlantic and Metropolitan - is represented on all-star weekend by six forwards, three defencemen and two goalies, with at least one player chosen from every NHL club.

As introduced at last year's NHL all-star game in Nashville, all-star weekend will feature three 20-minute games played in a 3-on-3 format.

The divisional teams will compete head to head in the skills competition on Jan. 28, then face off in semi-final games on Jan. 29. The winners of those semis will play for the championship.

Fan votes determined the four captains, who were announced last week, while NHL Hockey Operations named the other 40 players.

Edmonton Oilers centre Connor McDavid, who leads the league with 48 points, was selected captain of the Pacific Division.

Pittsburgh Penguins centre Sidney Crosby is the Metropolitan Division captain.

P.K. Subban of the Nashville Predators is the Central Division captain, but has not played since Dec. 15 because of an upper-body injury.

And Montreal Canadiens goaltender Carey Price, who is 20-6-4 with a 2.12 goals-against average and .928 save percentage, is the Atlantic Division captain.

Associated Graphic

Patrik Laine, left, hasn't spoken to media since sustaining a concussion on the weekend. Auston Matthews, right, has scored 15 goals and has 22 points in his past 20 games.

CHRIS O'MEARA/AP; CLAUS ANDERSEN/GETTY IMAGES

FOOTBALL FESTIVITIES
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The Canadian Press
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Monday, November 28, 2016 – Print Edition, Page S2


Toronto -- Tailgating reviews were mixed as fans of all colours mingled in a jovial and "typically Canadian" party in a parking lot before Sunday's Grey Cup kickoff.

Ottawa RedBlacks fans said they loved the experience outside BMO Field in Toronto, where beers sold for $4 and fans grilled hot dogs and calamari.

"It's a really good opportunity for fans to get together, have some food and drinks before the game," said Lordele Greenyer, who came down from Ottawa a few days ago to take part in the festivities leading up to the game.

"There's no tailgating in Ottawa - definitely nothing like this - and I think they've done a very good job of it."

Some Calgary Stampeders fans said they preferred the tailgating back home and complained about the ticket prices and the "terrible" public transit.

"It wasn't well organized, it was difficult to find out where to go and the volunteers didn't know where the tailgating spot was," Barry Wilson said.

"But we had a really good time when we got here and we can't gripe about the weather," which was 6C and partly cloudy at kickoff.

Wilson wasn't the only one who couldn't find the tailgating lot - it was across six lanes of traffic and in the opposite direction of the stadium.

Another Stampeders fan, Denae Lallier, wasn't thrilled with the $500 ticket price.

Tickets were going for about half price on the grey market outside the stadium, but officials expected a record crowd for the recently renovated BMO Field.

Fans won't be treated to the teams' respective mascots.

A RedBlacks spokesperson said the Algonquin Loggersports Team that traditionally slices a "wood cookie" off a log at home games won't be on the field due to space issues and the same goes for the Stampeders touchdown horse, Quick Six.

The Governor-General of Canada, David Johnston, flipped the coin for possession before kickoff.

Prime Minister Justin Trudeau, who is in Madagascar leading the Canadian delegation to the summit of la Francophonie, sent fans a video message before the game.

"As we all know, anything can happen on Grey Cup Sunday," Trudeau said.

Olive farmers face disastrous harvest
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By ERIC REGULY
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Monday, November 28, 2016 – Print Edition, Page B1


For about 10 days every November, Arrigo Peri, a Rome orthodontist, closes his dental practice, drives to Puglia, in the heel of Italy, and indulges his passion - olives.

"Making olive oil is like making wine," he says. "It's like being an artist."

But this year, artistry gave way to misery. The harvest, which just wound up, has been a disaster pretty much everywhere in the country, with early estimates putting the Italian yield down 40 per cent.

Mr. Peri, 50, says the harvest on his own farm - 1,000 trees on 10 hectares - fell 75 per cent or more this year. He's lucky: Farmers in Abruzzo, the olive-mad region due east of Rome, between the Apennine Mountains and the Adriatic Sea, say their harvest was pretty much wiped out.

Coldiretti, the Italian farmers' group, last month said the harvest in Italy - the world's secondlargest producer of olive oil, after Spain - was on course to produce only 290,000 tonnes of oil this year compared with 470,000 tonnes in 2015 and an historical average of 400,000 tonnes. That means retail prices will go up, perhaps as much as 30 per cent, even though quality may go down as inferior domestic and imported oils are blended with highquality oils.

Mr. Peri plans to raise the price of his organic, extra-virgin oil, which carries the label "Eredi Perrone" (Heirs of Perrone, after his mother's side of the family) and which he sells to restaurants and dental clients, by about 20 per cent, to 12 ($17) a litre. This year, he expects his meagre harvest will produce no more than 2,500 litres, down from 5,000 to 8,000 litres in a good year.

The distressing news for olive oil producers in Italy and elsewhere in the Mediterranean is that dud harvests are no longer rare. "Supply has become more unstable in recent years," Vito Martielli, grains and oilseeds analyst at Rabobank, in the Netherlands, wrote in an October report.

"Weather conditions have impacted the most important producing countries three times in the last five years, causing supply failures."

In 2012, frost combined with severe drought wrecked the harvest in Spain, whose enormous production sets the global price for extra virgin olive oil. In 2014, extremely dry weather hit the Spanish and Italian harvests particularly hard; that year, Italy recorded its lowest production in 25 years.

While the 2016 oil production will not be a writeoff, unlike the one two years ago, Mr. Martielli expects a 7-per-cent production drop in Spain, a 29-per-cent drop in Greece, the third-largest producer, and a similar fall in Tunisia, whose output is close to Greece's.

In late November, the Spanish price for extra virgin oil reached 3,200 a tonne, up from 3,150 in September. The price last year was 3,000 or less.

In Italy, the spot price surged to 3,800 a tonne in recent days, up from 3,600 earlier in the autumn and 3,400 or less last spring, according to Bloomberg data. But in Puglia, where some of the best olive oil is produced - the area is famous for is low-acidity oil - the price has shot up to 5,000 a tonne.

Falling production in Spain, Italy, Greece and Tunisia will cause shortages around the world, which is developing a taste for olive oil as the health benefits of the Mediterranean diet become well known. Global demand rises 3 per cent to 4 per cent a year, Mr. Martielli says, and there is lots of room for growth. In Canada and the United States, average annual consumption of olive oil a person is only 1.1 kilograms; it Italy, it's 13 kg and even higher in Greece.

Mr. Martielli blames "weather conditions and pests" for the overall decline in the Mediterranean this year. Mr. Peri agrees that the changing climate is to blame.

He, his mother, Silvana Perrone, and his father, Gianni Peri, who died in 2010, spent years reviving the family olive-tree farm, which goes back to his mother's grandfather's era. Until 50 or 60 years ago, grape vines were grown between the oil trees and the combined production of wine and olive oil put the Perrone family in high standing in the local town, Acquaviva delle Fonti, which is near the port city of Bari, the capital of Puglia.

His grandfather pretty much ignored the farm and it went to waste. The fix-it job began in the late 1980s, after Mr. Peri's father retired. The work was tough, especially since the organic certification they coveted meant no herbicides or pesticides could be used. "We had to clean the trees and get rid of all the diseases," he says. "I washed every single tree myself, with a soap sprayer. It took me five days. It worked and the yields got better."

All went fairly well until the disastrous 2014 harvest. The yields recovered, and then some, in 2015. Then the olive-fly infestation hit hard. The fly lays its eggs in the olive, making it rot and fall to the ground. In the southern tip of Puglia, many thousands of olive trees were also severely damaged or killed by a bacterial disease called Xylella Fastidiosa.

"This is happening because the climate was not like it was before," Mr. Peri says. "We had no snow this year and no really hot days. Extreme heat and extreme cold kills the bugs. We also got a lot of rain, which is ideal for the fruit flies."

In spite of the two lousy harvests, Mr. Peri and his mother have no intention of giving up on the farm. They would like to make a profit from their labours, but that's not the point. "Making olive oil goes back to ancient times," he says. "It's cultural. It's something you're born with and it's in your blood."

Associated Graphic

Olive trees at the Pantaleo Piccinnino in Caprarica near Lecce in the Puglia region in Italy. Estimates put this year's Italian olive yield down 40 per cent after a dud of a season.

TIZIANA FABI/AFP/GETTY IMAGES

The olive harvest in Italy, which just wound up, has been a disaster everywhere in the country, with early estimates putting the Italian yield down 40 per cent.

MARIE-LAURE MESSANA/AFP/GETTY IMAGES

A towering toll: Calgary office values drop $4-billion
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Falling office rents and a commercial vacancy rate over 25 per cent drive down the value of the city's downtown office buildings by 16 per cent
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By KELLY CRYDERMAN, TAMSIN MCMAHON
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Friday, January 6, 2017 – Print Edition, Page B1


The crushing Alberta recession has wiped out more than $4-billion in value of downtown Calgary office properties, city assessors warned Thursday, with some suburban office landlords and retailers expected to see higher tax bills as a result.

In updated property assessments mailed to more than 540,000 Calgary homeowners and businesses this week, city assessors said falling office rents and a commercial vacancy rate that now tops 25 per cent in the city core have driven down the average value of Calgary's downtown office buildings by 16 per cent this year. Over all, the median value of non-residential properties dropped by 6 per cent.

Among Calgary's most iconic commercial properties, the Bow office tower, owned by H&R Real Estate Investment Trust, saw its assessed value drop by 21.7 per cent to a little more than $1-billion. The assessed value of Bow Valley Square, owned by Oxford Properties Group Inc., the real estate arm of the Ontario Municipal Employees Retirement System, fell by 20.7 per cent.

The assessments are based on the property values as of July 1 of the previous year and don't necessarily reflect current market values. Citywide, the total value of office properties dropped from $31.1-billion in 2016 to $26.7-billion this year. Over all, Calgary's property market lost $6-billion in value in the past year amid rising unemployment.

Falling property assessments don't come as a surprise for Calgary's commercial real estate industry, which has been grappling with a growing glut of empty office space over the past year.

"The bigger story is: How far can this go?" said Greg Kwong, regional managing director for commercial real estate services firm CBRE Ltd. "I can almost guarantee that you're going to see property values drop further."

Calgary's office sector added an additional four-million square feet of unoccupied space in 2016, sending the vacancy rate soaring over the past year, said Bob MacDougall, senior managing director at Cushman & Wakefield Inc. in Calgary. "It's a tough slog for landlords and we have to work really hard to help them try and at least maintain their current position and not slide further," he said.

The city assesses the value of office buildings based on their available rental stream, which has fallen precipitously as tenants have left. Rents for premium A-class buildings have dropped at least 40 per cent since late 2014, Mr. Kwong said. Rents have plummeted as much as 70 per cent for C-class buildings - which tend to be older, smaller, and not connected to the Plus-15 skywalks that link much of downtown Calgary.

CBRE predicted that 2.4 million square feet of new, premium downtown office space will hit the Calgary market this year. Of that, 53 per cent is preleased - meaning vacancy rates could worsen further still. Cushman & Wakefield said it expects vacancy rates in downtown A-class office buildings to top 29 per cent by late next year. Meanwhile, remaining prospective tenants are being offered months of free rent for signing long-term leases, or other inducements.

The plunging value of Calgary's office buildings will likely mean lower tax bills for many of the city's largest downtown office landlords. But that will do little to alleviate the woes of the city's major office landlords, Mr. MacDougall said. "I don't think it's a help at all," he said. "The thing that is going to help our market is going to be a reversal in the fortunes of the companies in the oil exploration business and it's going to require jobs."

Others businesses will have to pick up the slack. Municipal officials warned that nearly twothirds of commercial property owners - particularly suburban office landlords and retail shopping centres whose property values have fared better - should expect to see their taxes go up, in some cases significantly.

Calgary uses a "revenue-neutral" property tax system, meaning some taxpayers could see their property values go down even as their taxes go up, leaving the city's tax revenues largely unchanged.

City council previously announced it was setting aside $15-million in grants to help struggling small businesses cope with their higher tax bills.

The Calgary Chamber said it will work with the city to see that the grant money is best distributed to the property owners that need it. But the group's president and chief executive officer said the city's strategy of taxing assets no matter what the economic conditions or the individual performance of businesses simply doesn't work.

"What they've done is taken the burden from the downtown commercial properties and put it on the outer suburban properties," said the Chamber's Adam Legge.

For many smaller businesses, he added, the tax hike could contribute to job cuts, reduced services, or firms closing their doors.

"We are concerned with what is happening with this economic downturn - businesses being asked for additional dollars when they're getting absolutely nothing in incremental value," Mr. Legge said.

Calgary homeowners will see less of a sticker shock on their tax bills than commercial property owners this year.

Median residential property values fell by an average of 4 per cent, with the typical single-family home dropping $20,000 to $460,000, while the median condo value fell $10,000 to $270,000.

The total number of homes and condos worth more than $1-million dropped by more than 2,200.

Half of single-family homeowners will see their property taxes decline this year, while nearly three-quarters of condo owners will also pay less tax in 2017.

Homeowners whose property values went up, or fell by less than 4 per cent, will see a tax hike. Most homeowners will see their taxes rise or fall by less than 5 per cent this year, said Harvey Fairfield, acting director of city assessment.

Associated Graphic

Buildings on Calgary's downtown skyline have been hit hardest, but citywide, the total value of office properties dropped from $31.1-billion in 2016 to $26.7-billion this year.

JEFF MCINTOSH/THE CANADIAN PRESS

Just as economic prospects brighten, BoC faces fresh risks from Trump
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By DAVID PARKINSON
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Monday, January 16, 2017 – Print Edition, Page B1


The Canadian economy's recent solid run has turned what was a potentially interesting Bank of Canada interest-rate decision this week into another no-change event. But there will still be compelling reading in the central bank's economic outlook - and how it balances the prospects for growth with the dangers of a whole new set of risks, especially those posed by the incoming U.S. administration.

The financial markets are pricing near-certainty (99.2 per cent, in fact) that the Bank of Canada will hold its key rate at 0.5 per cent when it unveils its first rate announcement of the new year on Wednesday. That would mark the 12th straight decision, dating back a year-and-a-half, that the bank has stood pat on rates.

The much more critical element to the day's news will be the bank's quarterly Monetary Policy Report, which will provide considerable new detail about the bank's expectations on rates, inflation and the country's overall economic prospects - including specific new forecasts for economic growth and inflation for 2017.

As ho-hum as the rate decision itself now looks, it actually represents a significant sentiment shift since the bank's last MPR, in mid-October. At that time, the bank cut its growth projections for the rest of the year; for 2017, it trimmed its inflation outlook and pushed back its projection for when the economy would return to full capacity. While it all implied that the bank's interest-rate increases were further in the distance than previously thought, Bank of Canada Governor Stephen Poloz went further: He revealed, in a news conference, that he and his colleagues had "actively discussed" a rate cut, before deciding that they wanted to wait longer, for a host of uncertainties hanging over the economy to play out.

The implication was that a rate cut was in play unless conditions improved; the most likely timing was the January rate announcement, to coincide with the next MPR, and, thus, the bank's next chance to explain its thinking in written detail. Markets quickly priced in a one-in-four chance of a January rate cut.

But conditions did improve, and so did the outlook for rates.

Critically for the Bank of Canada, the country's trade balance has pulled a stunning aboutface, from a record deficit in September to the first surplus in more than two years in November (the latest data available).

Exports, a vital cog of the central bank's economic recovery plan, are showing strong momentum again after sputtering through much of the year.

Meanwhile, job creation is on a tear. Over the past four months, the economy has added an estimated 175,000 net new jobs - more than it had over the previous 19 months before that.

Economists now believe fourth-quarter economic growth was probably about 1.8 per cent, stronger than the 1.5 per cent that the Bank of Canada projected in the October MPR.

What's more, Statistics Canada recently revised upward its GDP estimates for the first and second quarters of 2016. It suggests that economic growth for 2016 may have been a bit brighter than the Bank of Canada had previously calculated.

And the Bank of Canada's own Business Outlook Survey, released just last week, pointed to a long-awaited pick-up in business investment in the next year - a key ingredient to the central bank's vision for the economic recovery.

The question, though, is whether the solid end to 2016 and the rising sense of business optimism will translate into a meaningful upgrade for the central bank's projections for 2017.

The consensus forecast among economists, compiled by Bloomberg, is for the economy to grow by 1.9 per cent in 2017 - actually a shade below the Bank of Canada's October forecast of 2 per cent.

There is one school of thought that the Bank of Canada's forecasts will err on the cautious side in light of the new uncertainties to Canada's outlook, especially on the trade front, posed by the election last November of Donald Trump as U.S. president.

Mr. Trump comes to the office with an aggressively protectionist trade agenda, and has been increasing his threats on the trade front in the weeks leading up to his Jan. 20 inauguration.

On the other hand, Mr. Trump's policies may also represent an upside risk to the Canadian outlook, as his spending plans could accelerate U.S. growth and demand.

Given how important trade and U.S. growth are to Canada's outlook, the MPR will certainly have to address the Trump presidency in some way. But many economists expect the Bank of Canada to play it close to the vest, more or less holding the line on its forecasts and keeping any Trump-related assumptions out of the equation until there is some semblance of clarity about Mr. Trump's policies.

"The bank will probably conclude that it would be more prudent to wait a few more months for more details on the incoming Trump administration's plans. As it stands now, it is impossible to tell whether the proposed policies would have a net positive or negative impact on Canada's economy," economist Paul Ashworth of Capital Economics said in a research report.

Associated Graphic

THE GLOBE AND MAIL, SOURCES: BLOOMBERG; BANK OF CANADA

GM, Fiat vow to honour pledges despite Trump's target on sector
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Car makers made commitments last fall to spend total of $1.6-billion in Canada
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By GREG KEENAN
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Tuesday, January 10, 2017 – Print Edition, Page B1


Senior executives of two of the Detroit Three auto makers issued assurances Monday that they will go ahead with new investments in Canada, despite moves by president-elect Donald Trump to discourage manufacturers from building vehicles outside the United States.

Unifor, which represents hourly workers at Canadians plants operated by Fiat Chrysler Automobiles NV, Ford Motor Co. and General Motors Co., won commitments from the three companies during collective bargaining last fall that they would spend $1.6-billion in Canada during the four years of the contract.

Questions arose about those promised investments last week when Mr. Trump tweeted warnings at GM and Toyota Motor Corp. that they would face a "big border tax" on vehicles imported into the United States from Mexico, while Ford cancelled plans to build a small-car assembly plant in that country after criticism from Mr. Trump during the election campaign.

Ford agreed last year to spend $700-million at its Canadian operations, with the bulk of it going toward a new engine that will be built at its Windsor, Ont., facilities.

"The plans we have for Windsor and Oakville haven't changed. We don't anticipate them changing," Joe Hinrichs, Ford's president of the Americas, said in an interview at the North American International Auto Show in Detroit.

Fiat Chrysler chairman Sergio Marchionne told reporters $331million earmarked for a new paint shop at a Brampton, Ont., assembly plant and an engineparts plant in southwestern Toronto is not in jeopardy.

"It's confirmed," Mr. Marchionne told a group of reporters in an hour-long question-and-answer session that was dominated by questions about Mr. Trump and the impact his threat to end the North American free-trade agreement would have on the industry in the three countries.

Stephen Carlisle, president of General Motors of Canada Ltd., said the company is waiting to see "about what might be in play or not in play" but is proceeding with projects that were revealed to Unifor during negotiations last September.

"We're working post haste to get those projects into production," Mr. Carlisle said.

He would not identify those projects, but union and industry sources have said the auto maker plans to ship pickup truck bodies from Fort Wayne, Ind., to Oshawa, Ont., where assembly will be completed.

Mr. Marchionne joked that perhaps "Prime Minister [Justin] Trudeau wants to start tweeting."

Executives heading the Canadian units of global auto makers have said that they are glad so far to have escaped Mr. Trump's policy-by-140-characters attention, but they aren't sure how long Canada will remain off his radar screen.

Jim Lentz, chief executive officer of Toyota North America, was asked by Motor Trend magazine if he's worried that Mr. Trump will suddenly discover that Canada is not part of the United States.

"Shhhhhhhh," Mr. Lentz responded. "Well, if he goes [with a] border tax, it's going to be all borders. He's not going to be able to pick and choose."

Officials of the new administration said last week after Mr. Trump's tweets about GM that he is focused intently on bringing jobs back for Americans and not necessarily targeting a single country, although so far all his tweets have been about auto makers' Mexico plans.

Mr. Marchionne said Fiat Chrysler - and the auto industry in general - needs clarity on the new administration's trade policy before determining what impact that policy will have.

For the moment, however, Fiat Chrysler has put new investment in Mexico on hold until the future of NAFTA is determined, he said.

"Given the level of uncertainty associated with the relationship between the United States and Mexico, I think it would be incredibly imprudent to try to make commitments to that country," he said. "We need to have a very clear understanding of how it is that the U.S. administration intends to deal with NAFTA and what the implications are for both Mexico and Canada. Technically, the Mexico piece can be terminated, but I think it will leave Canada and the U.S. in a strange position."

He said that "by definition" Canada should become more attractive as a manufacturing location to auto makers if investment in Mexico is frozen.

"You should encourage people to continue to invest in Canada," he said. "It's a good manufacturing location."

The auto maker received a congratulatory tweet from Mr. Trump earlier Monday after announcing Sunday that it will invest $1-billion (U.S.) at plants in Ohio and Michigan and hire 1,000 new workers.

Mr. Marchionne said those plans have been in place for months.

Associated Graphic

A Chevrolet Bolt and a Chrysler Pacifica sit on display after winning car of the year honours at the Detroit auto show on Monday.

ANDREW HARRER/BLOOMBERG

FCA chairman Sergio Marchionne told reporters on Monday that $331-million earmarked for a paint shop at a Brampton, Ont., assembly plant and an engine-parts plant in Toronto is not in jeopardy.

DANIEL ACKER/BLOOMBERG

Wednesday, January 11, 2017

Correction

A headline in Tuesday's Report on Business incorrectly stated that General Motors Co. vowed to proceed with investments in Canadian plants despite recent tweets targeting the auto sector by U.S. president-elect Donald Trump. In fact, Fiat Chrysler Automobiles NV and Ford Motor Co. made such assurances while Stephen Carlisle, president of General Motors of Canada Ltd., said his company is waiting to see "about what might be in play or not in play."

Fiat Chrysler hit by allegations it obscured diesel emissions
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Accusations come after the result of a regulatory probe investigating FCA rival Volkswagen
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By DAVID SHEPARDSON, BERNIE WOODALL
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Friday, January 13, 2017 – Print Edition, Page B1


NEW YORK, DETROIT -- The U.S. Environmental Protection Agency on Thursday accused Fiat Chrysler Automobiles NV of illegally using hidden software to allow excess diesel emissions to go undetected, the result of a probe that stemmed from regulators' investigation of rival Volkswagen AG.

FCA shares plummeted as the maximum fine is about $4.6-billion (U.S.). The EPA action affects 104,000 U.S. trucks and SUVs sold since 2014, about one-sixth the number of vehicles in the Volkswagen case.

Fiat Chrysler Canada said about 39,000 vehicles with the diesel engines were sold in Canada.

The EPA and California Air Resources Board told Fiat Chrysler it believes its undeclared auxiliary emissions-control software allowed vehicles to generate excess pollution in violation of the law and each issued notices of violation.

The U.S. Justice Department is investigating, Fiat Chrysler said Thursday. New York AttorneyGeneral Eric Schneiderman said in a statement he is "deeply troubled" by the EPA findings and "will investigate the claims against Fiat Chrysler and stands ready to work with our state and federal partners."

Environment and Climate Change Canada said it is testing the vehicles and monitoring the U.S. actions.

Fiat Chrysler chief executive Sergio Marchionne angrily rejected the allegations at a hastily-assembled conference call with reporters, saying there was no wrongdoing and the company never attempted to create software to cheat emissions rules by detecting when the vehicle was in test mode.

He characterized the dispute as whether the auto maker had completely disclosed software that protects the engine, adding the company was planning updated software to address EPA concerns.

He said the EPA and the company could have settled the issue in "a more efficient way" without the EPA announcement, and he said "I'm really pissed off" about reports that equate FCA's issues with VW's.

"The way that it has been described, I think, has been unfair to FCA, and that is the thing that disturbs me most," Mr. Marchionne said. He also suggested regulators had a "belligerent" view of auto makers.

"We don't belong to a class of criminals," Mr. Marchionne continued. "We're not trying to break the bloody law."

The company has no plans to stop selling 2016 U.S. diesel models.

EPA has reviews ongoing of other auto makers' emissions systems, but it is not clear if they have found any additional wrongdoing.

Regulators said FCA failed to disclose engine-management software in 104,000 U.S. 20142016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0-liter-diesel engines.

The undisclosed software results in increased emissions of nitrogen oxides (NOx).

Cynthia Giles, an EPA official, said Fiat Chrysler had an obligation to disclose the "illegal software" but has not decided whether to label them "defeat devices."

The EPA said it found at least eight undisclosed pieces of software that can alter how a vehicle emits air pollution. Fiat Chrysler had recalled vehicles for one of the undisclosed software.

By contesting the charge, FCA will push the case into the coming administration of U.S president-elect Donald Trump. It is not clear how Mr. Trump's EPA will handle this or similar issues.

Mr. Trump has nominated Oklahoma Attorney General Scott Pruitt, a critic of federal environmental regulation, to lead the EPA.

Efraim Levy, analyst with CFRA, said FCA stands to "get a fresh start with the Trump administration."

U.S.-listed shares were last down 10 per cent, cutting their earlier losses.

Milan-listed shares closed down 16 per cent, weighing on European stock markets.

The EPA announcement comes amid closer scrutiny of auto makers after Volkswagen admitted to cheating dieselemissions tests in 580,000 U.S. vehicles.

In 2015, the EPA said it would review all U.S. diesel vehicles following an admission from Volkswagen that it installed software in cars allowing them to emit up to 40 times legally permissible levels of pollution.

On Wednesday, Volkswagen agreed to pay $4.3-billion in criminal and civil fines and plead guilty to three felonies for misleading regulators and selling polluting vehicles.

Fiat Chrysler could face fines of $44,539 a vehicle if it is proven that it violated emissions rules.

European regulators have also raised questions about Fiat Chrysler diesel vehicles.

Last fall, Germany wrote a letter to the European Commission accusing FCA of using an illegal device to switch off exhaust treatment systems in diesel engines in Fiat and Jeep vehicles sold in Europe.

Reuters, with files from Greg Keenan

Fiat Chrysler (FCAU)

Close: $9.95 (U.S.), down $1.14

Associated Graphic

Ram trucks, seen on display in Morrow, Ga., are among the FCA models identified in the EPA accusation made on Thursday.

JOHN BAZEMORE/ASSOCIATED PRESS

A U.S. border tax won't fix trade deficit, but could clobber Canada
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By BARRIE MCKENNA
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Saturday, January 14, 2017 – Print Edition, Page B1


OTTAWA -- It seemed like good news when Donald Trump didn't mention Canada once during his rambling and combative news conference this week.

He picked on Mexico and China. But just because Canada isn't the main target of the U.S. president-elect's wrath as he prepares to move into the White House doesn't mean there won't be heavy collateral damage here.

Mr. Trump's vow to repatriate U.S. jobs and slap a "big border tax" on companies that shift work offshore is sending shudders through Canada's business community - particularly the auto sector.

Trump spokesman Sean Spicer confirmed Friday that Canada would not be immune if a company move harms U.S. workers.

No other country is more exposed to U.S. trade than Canada. And no country - with the possible exception of Mexico - would suffer more if Mr. Trump and the U.S. Congress go ahead with this misguided and likely illegal border-tax scheme.

Just exactly what the United States will do is unclear at this point. Mr. Trump appears to be talking about selectively punishing U.S. companies that move production out of the country (heads up, General Motors, Apple and others).

Republicans in the House of Representatives are proposing something much broader: the creation of a "border-adjusted" corporate tax regime that would tax all imports - while exempting exports. Under the Republican plan, the U.S. tax rate would be cut to 20 per cent from 35 per cent. U.S. companies would pay no tax on revenues they generate from exports but would face the full 20-per-cent levy on all imports.

It is a seductive idea in a country that currently has one of the highest corporate tax rates in the world. The current system gives U.S.-based multinationals a perverse incentive to lower their tax bills by shifting profits and operations offshore.

But this idea isn't being sold to Americans as a way to create a more rational tax system. Instead, the rhetoric is all about boosting the economy, wiping out the chronic U.S. trade deficit and bringing manufacturing jobs back to the Rust Belt.

"The word is now out that when you want to move your plant to Mexico or some other place and you want to fire all of your workers from Michigan and Ohio and all these places that I won, [it's] not going to happen that way any more," Mr. Trump told reporters.

"There will be a major border tax on these companies that are leaving and getting away with murder."

The notion that taxing imports will supercharge the U.S. economy is pure fantasy. It won't significantly reduce the trade deficit or spur GDP growth, largely because a tax would push up the value of the U.S. dollar and conversely depress other currencies, including the Canadian dollar. Americans would buy fewer imported goods, reducing the supply of U.S. dollars. In turn, a border-adjusted tax would subsidize exports, increasing demand for cheaper U.S. goods and the dollars needed to buy them.

So it ends up a wash. And the burden will fall heavily on U.S. consumers and service-sector workers.

The proposed tax would also likely run afoul of the World Trade Organization, which has ruled previously that tax exemptions on exports are illegal unless they are structured as valueadded consumption taxes (like Canada's GST or Europe's VAT).

Canada, Europe and much of the rest of the world would challenge it, triggering a potentially destructive trade war.

But just because a U.S. border tax is nonsensical and probably illegal doesn't mean Congress and the Trump administration won't give it a whirl anyway.

The U.S. has been down this road before. In 1971, President Richard Nixon imposed a 10-percent surcharge on most imports and introduced export tax breaks - a response to a persistent current account deficit. The United States opted to exempt raw materials, including crude oil, and cars from Canada, but the levy was still highly damaging.

A new border tax would be unambiguously bad for Canada.

National Bank of Canada says in a research note that a 10-per-cent tax would send non-oil exports plunging 11 per cent. Economists Dan Ciuriak and Jingliang Xiao similarly argue in an upcoming C.D. Howe Institute study that Canada would take a "significant hit" from such a tariff, wreaking havoc on cross-border supply chains in industries such as autos.

And forget about getting even.

Mr. Ciuriak and Mr. Xiao conclude that tariff retaliation would only magnify the damage to Canada's economy while inflicting only modest pain on the United States.

Toronto boom to continue as Vancouver slumps
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By BRENT JANG
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Thursday, January 12, 2017 – Print Edition, Page B1


VANCOUVER -- Canada's two largest housing markets are going in different directions, with the Greater Toronto Area poised for another rally in 2017 while the Vancouver region girds for a decline.

Royal LePage forecasts the median residential price in the GTA will jump 10 per cent this year while Greater Vancouver will experience an 8.5-per-cent price decrease for various housing types.

"People in Toronto think that they live in this outlandishly expensive region, but they don't realize just how affordable homes are relative to the price of homes in Vancouver. There is a dramatic difference," said Phil Soper, chief executive officer of the real estate firm.

Last month, the average price for detached houses sold in the Real Estate Board of Greater Vancouver's territory was $1.68-million, compared with $1.02-million in the GTA. In the city of Vancouver, the price for detached properties averaged more than $2.6-million last month, compared with $1.29-million for sales in the city of Toronto.

The GTA tops the list of nine selected major markets covered by Royal LePage in its 2017 outlook. Other price gains are envisaged in Greater Montreal (4 per cent), Calgary (2.5 per cent), Winnipeg and Halifax (2 per cent), Ottawa (1.7 per cent) and Regina (1 per cent).

Edmonton is forecast to have a decline of 0.9 per cent, leaving Greater Vancouver trailing the pack in the forecast.

For the nine markets as a whole, the median price is predicted to reach $574,000 this year, up 2.8 per cent from last year.

Mr. Soper said Greater Vancouver prices could rise modestly this spring because of the seasonal trend of busy sales activity. But he expects muted activity for much of 2017, after Canada's most expensive housing market got out of control in the first half of 2016 before prices started falling in the second half.

"This is an affordability-driven correction, not one based on economic fundamentals. We're not looking at a financial crisis," he said, noting the B.C. government implemented a 15-per-cent tax on foreign home buyers in Metro Vancouver last August and Ottawa tightened mortgage lending rules in October.

Royal LePage produces a price composite in a formula that focuses on typical properties and excludes sales of luxury mansions. It said its large sampling provides a better barometer of trends than average prices, which are skewed upward by sales of high-end properties.

The real estate firm examines the city of Vancouver and seven suburbs to provide its representation of Greater Vancouver. The typical two-storey price is up 27 per cent over the past year to a median of $1.6-million in the Vancouver region, compared with a 17.5-per-cent increase to $846,536 in the GTA.

The firm's two-storey price composite for the city of Vancouver soared to $2.6-million in the fourth quarter, up 27.7 per cent from the same period last year.

The city of Toronto saw a 14.3per-cent increase to $1.02-million in the two-storey category, while the suburb of Richmond Hill experienced a 30.5-per-cent surge to $1.22-million.

Economists have warned about about high prices in and around Vancouver and Toronto.

Nationally, in 53 markets measured, Royal LePage's two-storey price composite climbed to $661,730 in the fourth quarter, up 14.3 per cent from a year earlier.

Over the past year, the national median price for all housing types increased 13 per cent to $558,153, and in the condo market, the price rose 7.4 per cent to $356,307.

Royal LePage's data show housing markets in Calgary and Edmonton remain in a downturn. Calgary's two-storey price composite was $500,153 in the fourth quarter, down 1.6 per cent from the same period in 2015. In Edmonton, the price slipped 1.8 per cent to $434,924.

On Wednesday, the Calgary Real Estate Board forecast the benchmark price for detached houses sold will rise slightly by 0.8 per cent this year while condo prices will slip 2 per cent.

Mr. Soper pointed out the price gap between detached houses and condos is much wider in the Vancouver region than in the GTA.

Data compiled by real estate boards show condos sold last month in the Real Estate Board of Greater Vancouver's territory averaged $588,922, or nearly $1.09-million less than the price for detached properties. In the GTA, the price for condos sold in December averaged $440,669, or $575,476 lower than the detached price.

A father's fight
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Len Boogaard's quest to end fighting in hockey
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By ROY MACGREGOR
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Saturday, January 14, 2017 – Print Edition, Page S1


GREELY, ONT. -- The fall of Derek Boogaard is a cautionary tale about the dangers of fighting. Boogaard, at 28, died from an accidental drug overdose as he tried to cope with the pain that came from his years as a hockey enforcer. After witnessing the physical and cognitive toll hockey took on his son, Len Boogaard is waging a battle of his own: to eliminate fighting from the game. But in the five years since Derek's death, he still wonders if the NHL is listening

No one noticed the retired Mountie sitting, shoulders parade-straight, among those gathered at Rideau Hall in early December, when Governor-General David Johnston held a oneday conference on concussion injury in sports.

He was never introduced, his name not mentioned - though the surname would have raised more than a few eyebrows. While others were invited, he had had to ask to be allowed to attend, squeezed in at the last minute.

As expert after expert spoke, he felt the urge to speak himself.

After all, he is an expert in an area no one would ever wish to tread: the parent of a child lost to drugs, alcohol and, ultimately, death.

In the afternoon session, Dr. David Mulder, the highly respected team doctor for the Montreal Canadiens and a recognized pioneer in trauma treatment, was talking about steps the NHL has taken to deal with head injuries: penalties for deliberate checks to the head, changes in protocol and treatment, independent spotters with the power to remove a potentially injured player from the bench.

Len Boogaard wanted to interrupt. He stirred and began to rise, only to feel the hand of his wife Jody, herself a Mountie, on his forearm. Jody's message was clear: Stay seated, stay quiet. She feared, probably justifiably, that any discussion might turn confrontational, and would certainly be emotional.

The retired Mountie settled back in his chair, knowing Jody was right. All he had wanted to do was ask one very simple question.

"What is the NHL going to do about fighting?"

'If you want to make it, you got to fight'

Derek Boogaard died on May 13, 2011. He was 28 years old. The New York Times, investigating the early and shocking death of this young hockey player, estimated that he had been in more than 100 fights, some of which he lost, before he even made the NHL. He fought more than 60 times, losing precious few encounters, while a professional with the Minnesota Wild and New York Rangers.

Derek's parents both had Dutch heritage, Len born in the Netherlands, Joanne the first Canadianborn child in the Vrouwe family that had emigrated to Regina.

Their first-born, Derek, was a giant virtually from birth. Two boys and a girl would follow, all destined to soar above six feet.

When Derek was 5, the parents signed him up for minor hockey in the small Saskatchewan town of Herbert, where Len had been posted by the RCMP. Derek was so much bigger than the other kids that they fell down just running into him. Parents complained; parents would always complain. They complained so much that at age 12 he quit the game and took up skateboarding.

He was huge and fairly athletic, 6-foot-4 and filling out at 15.

Floyd Halcro, a friend of Len's, was coaching the bantam AA team in Melfort, Len's next RCMP posting, and convinced Derek to come back into the game. Big, shy, a "teddy bear" at home, according to his three younger siblings, Derek took on the role of "enforcer" as it meant ice time and acceptance by his Melfort Mustangs teammates. They counted on him and he liked to be counted on, wanted to matter to his teammates.

Len Boogaard was enthusiastic about his son's return to the game. He often drove Derek and teammates to out-of-town games in a police car - "I had permission" - and would even drive Derek into Saskatoon for boxing lessons.

Len shudders today to recall those drives into the city. "You're a dad," he says. "You're supposed to be looking after your kids. In hindsight it is always, 'Well, maybe I should have done this, maybe I should have done that.' When I was taking him to Saskatoon for boxing lessons at 15, it's like, 'What was I thinking?' " In one game that the on-ice officials lost control of, Derek waded into the opposition bench, the players scattering like rabbits. There just happened to be two scouts from the Regina Pats in the stands and they so liked what they saw they immediately put Derek Boogaard's name on the team's protected list. He was far from the best player on the ice, but he had something all junior teams wanted.

"He was told, 'If you want to make it, you got to fight,' " Len says. " 'Wherever you go you got to fight, you got to fight.' " At 17 he went off to Regina for the Pats' preseason training camp and had a dozen scraps in the team's first four scrimmages.

He had a new nickname - "Boogeyman" - which the fans loved.

When he lost a fight in a game against the Kelowna Rockets, the Pats traded him to the Prince George Cougars, where he was far away, alone and miserable. His parents' marriage had broken up, he kept changing billets and he was flunking out in school. His season ended with a broken jaw, courtesy of another player's fist.

He returned to Prince George for a second season - his body rounding out to the 6-foot-7, 265 pounds he would take into the NHL - and, happy with his billets, he had a good year. A fan poll named him the toughest player in the conference. He scored twice, once in the playoffs. In hand-written notes about his life that his family found after his death, he had written, "It was the best feeling I had the last 2 years."

But Derek Boogaard wouldn't be drafted for his goal-scoring.

The Minnesota Wild took him 202nd overall in the 2001 entry draft.

Derek finished out his junior career with the Medicine Hat Tigers and the Wild signed him to a contract, sending him off to play for the Louisiana IceGators of the East Coast Hockey League.

Lonely, he bought an English bulldog he named Trinity, who would outlive him by several years. Today, Trinity's ashes are in an urn in Len Boogaard's home in Greely, Ont., near Ottawa, and two more English bulldogs have taken her place. One is called Pebbles, the other Boogie.

From the ECHL, Derek moved up to the AHL, playing two seasons with the Houston Aeros. He was so popular with fans that when they had a "bobblehead" night for him, it was the doll's fist that bobbled.

At the Wild's 2005 camp, head coach Jacques Lemaire saw how intimidating Derek could be on the ice and made room on the roster for the enforcer. Early in the 2006-07 season, in a game against the Anaheim Ducks, Derek would cement his reputation with a punch that so shattered the cheekbone of the Ducks' enforcer, Todd Fedoruk, that it had to be reconstructed from metal and mesh. The next season, Fedoruk would become a teammate, their stalls side-byside, and they would become best friends.

Somewhat naively, Derek believed he had value as a player as well as a fighter. "He was pigeonholed," Len says. The NHL had brought in a new rule to get rid of staged fights at the end of a game. Coaches that sent out their enforcers in the final five minutes could be fined $10,000 if a fight broke out. "Derek went to Jacques and said, 'Look, I want to play in those five minutes,' And Jacques said, 'I'm not going to.' So Derek gave him a cheque [for $10,000] and said, 'If you play me, and I get into a fight, that's yours.' When Jacques came to the funeral, Jacques still had that cheque in his pocket."

The fighting was taking its toll on Derek. He had hurt a shoulder playing for the IceGators and painkillers had helped. He had back surgery during the 2008-09 season with the Wild and was prescribed Percocet, which he would sometimes gobble up to 10 pills at a time. He began taking OxyContin, deliberately chewing them to reduce the time-release aspect of the pills.

The pill dependency got so bad that he missed camp in 2009.

The reason, never given at the time, was that his father had forced him to seek help for his drug dependency.

"I found out about it," Len remembers. "I confronted him with it, sort of surreptitiously. He told me to leave it alone because it would ruin his career, that he could handle it himself, that he could look after himself. And he could deal with it. I said, 'No, that's not the way it's going to work.' So I made phone calls and within a day or two days he was in rehab in California."

Len Boogaard understood his son's reluctance to seek help: "It's a job, and if you're not willing to do that job there are 1,000 kids standing behind you willing to do that job."

Derek had cause for concern.

The Wild had another young player, John Scott, who was an inch taller than Derek, almost as heavy, and just as willing. "John Scott was there to take his job," was Len's view.

Scott certainly understood the job description. Writing recently in the Players' Tribune, an athlete-run website, the now-retired Scott figured he had 43 fights during his NHL career and lost only one. He had almost as many children, four, as goals, five. He saw his role as much the same as a bar bouncer: "If you're doing your job right, there is no fight."

Scott, who was voted to last year's all-star team as a fan joke, wrote that he had a confession to make: "I don't care what people remember about me as a hockey player, but please remember this one thing: I didn't love to fight."

It wasn't the actual fighting that was the problem, Scott wrote, but the nerves, the anticipation, the stress on your psyche.

"I wished I could have scored goals," Scott wrote. "I mean, scoring is a lot of fun. But that's not me. I'm not as good at that as the other guys. What I do have is a natural protective instinct. I was born with size, and I was good at punching guys in the face. I didn't love it, but I was good at it, and I was happy to do whatever it took to protect my teammates."

Derek Boogaard felt much the same. When he returned from rehab, however, he seemed different somehow. He would often fall asleep, forget things. But he kept fighting. He was happy protecting his teammates.

In the summer of 2010, Derek became an unrestricted free agent and signed a four-year, $6.5-million (U.S.) deal with the Rangers. At 28, he was rich. He was in New York. And he was back in trouble. He would play only 22 games for the Rangers.

His fights did not go well. In a home game, with fans chanting his name, he was bested by Edmonton's Steve MacIntyre and suffered a broken nose. With the nose still not healed, he played a game later that month in Ottawa where the Senators' enforcer, Matt Carkner, stunned him with a punch to the still-fragile nose.

He never played again.

He was suffering concussion symptoms, and they were horrible. The rink made him nauseous.

When he felt well enough to skate again, the team said he could skate before their practices or after. He became convinced, rightly or not, that the coaching staff was ostracizing him. He became a recluse in his New York apartment, going out mainly to purchase more painkillers in whatever method he had to.

When his father came to visit, he broke down multiple times, the huge hockey enforcer sobbing in his father's arms.

One of his Ranger teammates, Sean Avery, well known for his eccentricities, got Derek interes ted in Buddhism. He even got Derek to do something he hadn't done since school: read a book on it. Derek began collecting small Buddhas and placing them about his apartment. A cement Buddha is today in the backyard of his father's home near Ottawa.

Len Boogaard believes his son found some peace in reading about Buddhism.

The first noble truth, after all, is about suffering - physical and psychological pain - the second about what leads to such suffering, the third that suffering can be overcome and happiness found if one only follows the path found in the fourth truth.

Derek was certainly seeking happiness. He found it not on the ice but in working with a group called Defending the Blue Line (now known as United Heroes League), which gets military kids involved in sports by providing equipment and tickets.

After his son's death, Len Boogaard received a letter from a member of the U.S. Air Force saying Derek had "made a monumental impression on our military families." Another letter came from a local food bank, telling the family how Derek would often show up with groceries and help out. Unfortunately, Derek's condition was worsening. He became obsessive. Len found that his son's February phone bill was more than 200 pages long and included nearly 14,000 text messages. Many of those messages were to a counsellor he had befriended in rehab. The Rangers sent him back to rehab in California but he did not stay long, leaving to attend a family event despite the program director's advice. He flew back to Minneapolis, where he kept an apartment.

After an evening out with friends and family, he returned to the apartment and the next day was found lifeless. When Len Boogaard went to the funeral home to collect his son's ashes, he was shocked to discover they were in two urns, one being too small to contain all the remains.

"The funeral director told me they had never seen that before," Len says.

'The first thing to do is get rid of fighting'

Len Boogaard is a trained cop and went to work. He found that Derek had exchanged several texts the night before he died with another counsellor. Derek obviously knew he was in distress. In checking with area pharmacies, Len was able to determine that, in his son's final season with the Wild, Derek had obtained 25 prescriptions for oxycodone and hydrocodone. The prescriptions came from 10 different doctors and added up to more than 600 pills. He had no idea how many painkillers his son had found on the illicit market.

The coroner concluded that Derek Boogaard had died of an accidental overdose of a lethal mixture of prescription painkillers and alcohol.

Before Derek's body was cremated, Boston University had contacted the family. Dr. Ann McKee, a professor of neurology, wished to examine Derek's brain to see if he had suffered from chronic traumatic encephalopathy (CTE) and the Boogaards readily agreed. When McKee finished her examination, she told them that Derek had CTE in his brain to a level she had never found in someone so young. She told them that, had Derek lived, he would have had dementia by middle age.

When the New York Times approached the family about doing a story on Derek's rise and fall, the family agreed. Len turned over all his investigations and Derek's own handwritten notes on his life to reporter John Branch. Branch, a Pulitzer Prize winner for other work, produced a riveting three-part series and video entitled Punched Out: The Life and Death of a Hockey Enforcer. In 2014, Branch published the book Boy on Ice: The Life and Death of Derek Boogaard, which examines the enforcer's life and tragic death in detail.

Len Boogaard has not been able to read the book, though he holds enormous respect for John Branch.

"I can deal with talking about Derek and his addiction and the doctors and all that stuff," he says, "but when I have to read about his upbringing and all that he went through ... I can't. It's the same with my wife and the others. They can't read it, either."

The Times investigation, a concussion summit convened by President Barack Obama in 2014 and various lawsuits by former athletes against professional football and hockey have convinced the Boogaard family that change is more likely to come in the United States before Canada.

"There seems to be more coverage of it down in the States," says Len Boogaard. "Americans seem to be more interested in resolving this and doing something about the situation.

"It's a sacred cow here in Canada. You can't say anything derogatory or negative about hockey."

Scientists say that the developing brain is most vulnerable and Len Boogaard wonders how, then, junior hockey can justify fighting on any level. "Why would you have a 16-year-old fighting a 20-year-old?" he asks.

"It doesn't make any sense to me."

His son was groomed as a fighter and willingly took on the role, but Len says the "Boogeyman" was not his son. "It was a persona," he says. "When he went onto the ice this was his persona.

This was what he had to do. It was his job. Take him out of that environment and he was a completely different kid.

"When he came home from Prince George, here's this kid, 6-foot-7, 265 pounds, and he was a fighter in the Western Hockey League and now he's rolling around on the floor with the puppy. And then you realize that he's only a kid."

The father remains intensely proud of his son for fighting through all the adversity standing between him and his dream of playing in the NHL.

"The bullshit he went through playing for those teams in Herbert and Melfort and when he was in junior," Len says. "Just the amount of effort and desire and willpower that he had. He wanted to play in the NHL and ultimately he did."

But the father does not fool himself. Derek was a good, at times fine, athlete - he won events in swimming, played football - but he was not a gifted hockey star.

If there were no fighting allowed, Len knows, "Derek wouldn't have been playing in the NHL."

Len Boogaard says he has lost the desire to watch the NHL: "I watched the World Cup and that was hockey. None of this bullshit, fights, scrums in front of the net all the time. It was just up and down hockey."

What deeply bothers Len is that he knows he himself was an enabler, even if unwittingly. He took his son to Saskatoon for boxing lessons. He was there, as so many Canadian parents are, as the child rode his dream as far as it would take him.

"My son was an enforcer," Len says. "He was there simply to fight. He wasn't a goal-scorer, just bare-knuckle boxing on ice. So the first thing to do is get rid of fighting."

When Ken Dryden, the former NHL player turned author and politician, spoke at the GovernorGeneral's conference last month, he told the gathering that on an issue such as concussions, where so much has been learned, "25 or 50 years from now, people will look back at us and say, 'How could they have been so stupid?'" That's how Len Boogaard feels.

"I didn't know anything about concussions," he says.

"The thing that kept cropping up in my mind was his hands. His hands were just mangled. His knuckles were pushed back. He was losing dexterity in them. I worried about what he was going to do because they were just essentially claws, his hands. And that's the only thing that I worried about - his hands. I didn't have any idea of the concussion issue."

That all began to change with the 2010 death of Bob Probert, another NHL fighter who had struggled with alcohol and drugs.

The former player with the Detroit Red Wings and Chicago Blackhawks died at 45 when he suffered a heart attack while boating with his four young children and in-laws.

A subsequent examination of his brain at Boston University found evidence of CTE.

Probert's death came just as Derek Boogaard was signing what would be his final contract, joining the New York Rangers in what would prove to be his final season of hockey. An autobiography on Probert's career and struggles, Tough Guy: My Life on the Edge, was released posthumously and Len purchased a copy.

"I started looking at Derek and reflecting," Len says. "A lot of the same things in the last couple of years. The short-term memory loss, the impulsiveness, the addiction issues etc., all those things associated with concussion and CTE - Derek had them."

The decision to send Derek's brain to Boston University had been easy to make.

The family merely wished verification of what they already knew. The family also brought a wrongful-death lawsuit against the NHL which was initially tossed out of court but has since been revived and revised.

What Len Boogaard wants above all else is a complete ban on fighting in hockey. Had he stood up at Rideau Hall that December day and asked what the NHL was going to do about fighting, he would have had a very simple suggestion.

If, as the league itself has said, fighting causes about 10 per cent of the concussions suffered in a season, why not reduce those concussion injuries by 10 per cent immediately by putting an end to fighting?

"How do you square the circle where they want to get rid of head shots but they allow fighting in the league?" he said.

"What am I missing?"

Associated Graphic

Len Boogaard and his family brought a wrongful-death lawsuit against the NHL which was initially tossed out of court but has since been revived and revised.

DAVE CHAN/THE GLOBE AND MAIL

Jody Shelley, left, of Philadelphia Flyers and the New York Rangers' Derek Boogaard raise their fists to fight during a game in Philadelphia in November, 2010.

MATT SLOCUM/THE ASSOCIATED PRESS

A Boogaard family photo featuring father and son hangs in the family's Ottawa home.

DAVE CHAN/THE GLOBE AND MAIL

Derek's father Len, seen here in his Ottawa-area home surrounded by his late son's memorabilia, can not bring himself to read 'Boy on Ice: The Life and Death of Derek Boogaard,' the book documenting Derek's rise and fall from hockey stardom.

DAVE CHAN/THE GLOBE AND MAIL

Boogaard was a fan favourite in Houston. His Aeros' bobblehead featured bobbling fists.

MARCUS YAM/NYT

PROFESSOR BLOODHOUND
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Western University law professor Richard McLaren, the man who exposed Russia's doping scandal, tells Cathal Kelly about tracking down witnesses, finding clues and his need for a cloak-and-dagger investigation
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By CATHAL KELLY
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Saturday, January 7, 2017 – Print Edition, Page S1


LONDON, ONT. -- Before entering a conference room at his London, Ont., law firm, Richard McLaren turns off his phone.

"This is just far too easy to track," McLaren says, waving the device about. "In fact, I can track your phone from here. I have that equipment."

The 71-year-old author of the report that has roiled the Olympic movement no longer uses public WiFi - he travels with his own portable router. He doesn't make calls from the tarmac - "One place you should never, ever use your cellphone is at an airport." And he has adapted his schedule so that he is at his desk when Russian security operatives are not at theirs - "They don't seem to work on weekends."

He comes by this paranoia honestly. During the course of his seven-month investigation into state-sponsored doping in Russia, his staff were followed, his computer systems were steadily attacked and his students at the Western University were approached.

"It's all been a bit like a spy story," he says brightly.

He's wearing a double-breasted jacket and a tie festooned with prancing Santas. There is a little bit of Ian Fleming to his elegantly rumpled presentation. Clearly, he has enjoyed the cloak and dagger.

"When I took this on, I thought, 'Well, this isn't going to be too hard and it's not going to take too long,' " he says. "Quite the contrary."

It began last May. McLaren, a long-time member of the Court of Arbitration for Sport, was part of an investigative commission probing Russia's track-and-field team. As that inquiry wound down, a more alarming controversy presented itself.

A former head of Russia's anti-doping control lab, Grigory Rodchenkov, accused Moscow of fixing the Sochi Winter Olympics. The details - bottles of urine being passed from an official testing laboratory to a shadow lab built alongside; comprehensive cheating across all disciplines; security services handling the operation - were so fantastical as to hardly be credible.

"I said to myself, 'This is just nonsense,' " McLaren says.

But the accusation struck at the heart of the World Anti-Doping Agency's (WADA) mission, and the accuser was impossible to ignore. The New York Times published Rodchenkov's story on May 12. A week later, the WADA asked McLaren to head an independent investigation into the matter. His mandate was to determine if a state-sponsored doping program existed in Sochi, but also to follow the trail of evidence wherever it might lead.

McLaren was on his way to France at the time. He asked that the first dossier of information be couriered to him there.

WADA refused. An official flew from Los Angeles to Paris and handed him the package of documents in a hotel lobby.

There is a great deal of what followed that McLaren will not talk about specifically. He remains concerned about incriminating witnesses. The most important of them - whom he calls CW1 (Confidential Witness One) - is the first person he spoke to. They spent two days together somewhere in California.

"At the end of those two days, I was shocked," McLaren says. "I started to think, 'This is way bigger than I thought.' And I still didn't know what the reality of Sochi was at all."

Who is CW1? A Russian? An athlete?

McLaren shifts uncomfortably in his chair.

"I can't say too much because while you might not think it significant, there are a lot of people who can pick up cues if I say very much. I am not saying anything for his protection."

As the case wound on, McLaren would be reminded repeatedly that he wasn't just investigating Russian authorities; on some level, he was competing against them.

After being convinced by CW1 that the investigation's premise was well founded, McLaren and his team began what he calls the "spadework" of aggregating information. Again, he won't say much about what he found or where he found it. His evidence trove contains databases, hard drives, e-mail chains and phone data.

That cache remains in his possession, hidden around the world. Only three people know where all of it is. Eventually, it will be turned over to WADA in its entirety.

McLaren based his team in London, England. The first stage of the investigation was a twomonth race to release an interim report before the beginning of the Rio Games. The International Olympic Committee needed that document in order to decide if and how Russia was to be punished.

McLaren played two major roles in affecting Russia's Olympic entry. Based on the earlier probe he'd been part of, the International Association of Athletics Federations (IAAF) had decided to expel all Russian track athletes from Rio. There was a process under way considering whether or not to lift the blanket prohibition. McLaren shared some of his early findings with that body, convincing the IAAF to uphold its total Olympic ban. This may have been the point at which Russia became seriously worried.

"I don't think [Russian authorities] saw this coming," McLaren says. "I think they thought they could tough it out through with 'deny, deny, deny' and that it would go away."

It didn't.

McLaren's first report - released in mid-July in Toronto - substantiated most of Rodchenkov's claims. Russia had manipulated the doping control systems at Sochi on a pervasive scale. McLaren named Russia's FSB (Federal Security Service) as a conspirator.

In short order, he had made himself a rather large target.

The Russians seeded his July news conference with tame journalists. He was asked why he hadn't interviewed any Russians in Russia in person. McLaren recalled another of his cases, one in which he'd spent hours questioning Vitaly Mutko - an acolyte of President Vladimir Putin and formerly Russia's minister of sport. "We found that information and that process singularly unhelpful," McLaren said. It got laughs in the room. One can imagine how well this was all going over at the Kremlin.

At the time and since, McLaren declined to suggest what sanctions might be appropriate.

("I don't really think punishment works very well," he says now on the topic generally.

"Punishment works in the sense of deterrence. I get the deterrence part. But punishment as a corrective action as it concerns the individual isn't very effective.") In the end, the two branches of the Olympic movement - the Games and the Paralympic Games - chose opposite paths.

The IOC created a complicated protocol under which Russian athletes (excluding the track competitors who were under a total ban) would have to prove they were clean in order to participate in Rio. The International Paralympic Committee banned the Russian team en masse.

The Olympics rolled around.

Many Russians competed. The country finished fourth on the medal table. The controversy continued, as did the investigative work.

From the outset, McLaren's core team of six had taken precautions so their work could not be intercepted. Their communications were protected with cutting-edge software and "special equipment." Many conversations were face to face. They didn't pass anything sensitive in e-mail.

"We had some attempts at interference," McLaren says vaguely.

Such as?

"Following. You get a sixth sense, I think, that something's not right. It was pretty obvious in this particular case, though there was never any direct contact."

What do you do then?

"You report it and don't repeat your patterns. Change hotels.

Change the places you go. Everybody that could potentially be involved did that."

Regular efforts were made to infiltrate the team's computer systems, including the kind of phishing schemes that undid the Democratic National Committee.

McLaren's security team told him that most of the incursions were attempted during the workday, Moscow time.

"They ..." - and McLaren can't be sure who "they" are - "don't seem to work on weekends.

They have predictable patterns.

You can stay away from them."

How did you use that?

"We did some things when we thought they were off."

McLaren's day job is teaching law at the University of Ontario in London. Three of his students helped with basic research on the interim report. McLaren thanked them by name in the document.

"In retrospect, that might not have been such a great idea," he says.

Two of them - as well as other students of McLaren's - were approached on Facebook and through e-mail.

"Questions were being asked like 'Who is this guy McLaren?' 'Do you like him?' I think they were trying to get the goods on me, but there's nothing to find."

At any point were you worried?

"Oh yeah, it certainly crossed my mind from time to time," he says, not sounding terribly worried.

Was WADA or anyone else worried?

"I don't know," McLaren shrugs. "I never asked them. I'm sure they were."

Whatever danger existed, it was far greater for his sources, most of whom remain unnamed.

They included people who'd been participants in the doping scheme. Most of those he spoke to were no longer based in Russia.

There were by McLaren's estimation four kinds of witnesses.

The first group refused to co-operate. The second wanted written questions that would be replied to in writing. Those offers were refused - "Who knows who's writing the answers back?" A third group agreed to be interviewed on Skype.

"It's very hard to track Skype," McLaren says, nodding suspiciously in my direction. "Say, compared to that phone you've got there."

In some of those cases, McLaren believes there were other people in the room, feeding answers to the interviewees.

A fourth group "engaged for a while and then got frightened and disengaged. I suspect they got a visit."

McLaren's team issued their final report on Dec. 9. It's the size of a novel. It determined that Russia had profoundly corrupted the fair play ethos of amateur sport in a scheme that stretched back years and involved as many as a thousand top athletes.

"It was a cover-up that evolved from uncontrolled chaos to an institutionalized and disciplined medal-winning conspiracy," McLaren announced.

Once again, it was the details that shocked. Samples had been diluted with table salt and instant coffee. In one case, urine submitted by two female hockey players in Sochi contained male DNA.

The grand scale of the con, and its boldness, created a popular wave of recrimination against the IOC. How could they have been so lenient in Rio?

McLaren has some regrets on that score. In the main, he's been discouraged that the focus of animus has fallen on accused cheaters rather than the system that created them. In the wake of his report, the IOC opened new investigations focusing on specific competitors.

"They turned it into a hunt for individual athletes," he says.

"That wasn't my work. That wasn't what I was doing."

He maintains a remarkable sympathy for many of the Russian athletes caught up in the doping program. He mentions runner Yuliya Stepanova, a doper turned whistleblower and now a pariah at home. Stepanova has said that if she turns up dead, "all of you should know it's not an accident."

"Does [Stepanova] have a choice? She's got a dream. She wants to be in the Olympics," McLaren says. "Of course, you have a choice not to do it, but realistically is that the choice that's going to be made given the dream? Probably not. And particularly when you have people who are in positions of trust like coaches and trainers who are pushing it on you. That makes it very hard to resist."

Last week, Russian officials admitted for the first time that the bulk of what McLaren reported is true - there was a widespread doping conspiracy.

However, they continue to insist the key finding - that it operated at a state level - is wrong.

How high does McLaren think this reached? As far as Putin?

"We don't have any evidence of that," McLaren says. "Looking at it from the other side, if you were going to build this system, you wouldn't build it so that the top people actually knew about it. But on the other hand, the FSB is the federal security police.

They operate centrally. We know they're involved. Draw your own conclusions."

Though the investigation is finished, McLaren continues to gather clues. Since the report was published online a month ago, he's received more contacts from people involved.

"I'm not sure where that is going to ultimately lead," he says. "At this point, they are primarily interesting stories."

Russia continues to send out mixed signals. Officials have acknowledged the problem - if not its extent. They've also named former champion pole vaulter and loud WADA critic Yelena Isinbayeva the new head of Russia's anti-doping agency.

"It's an unusual choice," McLaren says drily.

In the end, it's up to the IOC to decide what further measures to take - if any.

Though he is the central figure in this drama, McLaren has little sense of what those may be. It wasn't until the final report was issued that he received a phone call - the first one he's ever got - from IOC president Thomas Bach.

"[The IOC] didn't think it was going to amount to anything," McLaren says. "They thought, 'Who's this character from London, Ont.? What's he going to be able to accomplish?' If it didn't amount to anything, there was no reason to have any contact."

What do you imagine they think of you now?

"I think probably a lot of people wish it had never happened, that either commission [the track and Sochi investigations] was ever carried out," he says.

"Because once you put one of these in place, you never know where it's going."

He is hopeful that Russia's effort at change is sincere. However, he has limited trust in the mindset of Russian officialdom or its ability to rein in a program gone rogue before the government got involved in the coverup.

"The moral compass isn't the same on the whole in Russia as it is in this country," McLaren says. "Ethical standards? They have them. But they also quite regularly don't observe them."

Associated Graphic

Richard McLaren, a Canadian law professor, at home in London, Ont., exposed widespread doping in Russian athletics.

IAN WILLMS/NYT

Richard McLaren wrote a pair of reports commissioned by the World Anti-Doping Agency on how Russian doping had tainted numerous competitions.

IAN WILLMS/THE NEW YORK TIMES

A vision for parity
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The creation of two competing professional leagues has given more women the chance to play at a high level outside of national teams and college programs, but are they sustainable? Joining forces and improving ties with the NHL may be the best path forward
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By ERIC DUHATSCHEK
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Tuesday, January 10, 2017 – Print Edition, Page S1


CALGARY -- The most dramatic and uplifting hockey game played at the 2014 Winter Olympics in Sochi didn't feature Alex Ovechkin or Sidney Crosby or Patrick Kane. It occurred in the gold-medal match between the Canadian and U.S. women, a game that went down to the wire. Canada tied it in the dying seconds and then won in overtime, after a U.S. shot at the empty net in regulation came gently to rest at the goal post.

It was high drama. It had a pleasing heroine - Marie-Philip Poulin, who has scored the golden goal for Canada's women in back-to-back Olympics - and it had an opportunity once again to jump-start interest in the sport of women's hockey.

So here we are, just more than a year out from another Olympics, and while the landscape for women's hockey has changed and improved on some levels, it still hasn't caught on with the viewing public in any meaningful or long-lasting way.

Many of the best young female players can earn scholarships and play at a reasonably high level in the U.S. college system. The problem is what happens next, after their eligibility runs out.

Right now, there are two competing professional leagues to choose from - the five-team Canadian Women's Hockey League and the four-team National Women's Hockey League.

The CWHL doesn't pay its players. It covers costs, and some equipment, but not sticks and skates. The NWHL, founded in 2015, does pay salaries, though they are modest, and recently introduced a 50-per-cent across-the-board pay cut to its players on the grounds that it was the only way to get to season's end, without folding.

If that sounds eerily similar to the rivalry that once existed between the NHL and the World Hockey Association, there may indeed be a parallel.

Former Canadian Olympian Cassie Campbell-Pascall, a CWHL board member and a Hockey Night in Canada commentator, believes the league's relationship with the NHL is its best hope of one day morphing into a for-profit operation that pays its players a living wage.

"The NHL is watching us, they're interested in us and they want it to work," Campbell-Pascall said. "To be honest, what kills women's hockey is people who don't understand the big picture. It's about eventually having a relationship with the NHL, where we have a professional league, and all of our teams fall under the umbrella of NHL teams.

"We have two leagues right now and I think we need the powers-that-be - the people who lead our leagues - to come together and make it one to make it successful."

The CWHL has seen some heartening moments this year.

On the second Saturday of December, a crowd of 5,938 attended a game at Bell Centre when Les Canadiennes de Montreal defeated the defending champion Calgary Inferno 1-0 in a battle for first place. In February, the annual CWHL all-star game will be played at Air Canada Centre in Toronto. For the second year in a row, Ottawa's Canadian Tire Centre will hold the Clarkson Cup.

Playing in an NHL building boosts the credibility of the CWHL, which counts among its 13 major sponsors, four NHL teams - the Canadiens, the Senators, the Maple Leafs and the Calgary Flames. Caroline Ouellette, the CWHL's career scoring leader and a four-time Olympic gold medalist, believes the association with the Canadiens has helped immeasurably in spreading the gospel of women's hockey in her market.

"When we used to be the Montreal Stars, we would meet people and they didn't even know we played hockey in Montreal," Ouellette said. "When we rebranded with the Montreal Canadiens, it was a bit of a feeling that we were now part of their organization. Hopefully, this is a start."

Oullette, like Campbell-Pascall, sees the evolving relationship with the NHL as the most effective means of going forward, noting bluntly: "For me, it's a question of gender equality - for young girls to have the same dream as young boys. Right now, that really doesn't exist.

"I don't think my teammates and I am delusional and think we can fill an NHL building at the moment. I don't think anyone is aiming for milliondollar salaries. But if it was an amount that would allow players to make a living playing the game and not have to work full-time, imagine how great the product can get." Until that happens, the majority of the CWHL's unpaid professionals play for love of the sport. In turn, that has obliged them to become skilled multitaskers in order to fit jobs, family and life around their hockey schedules. National team players have an advantage, because of Sport Canada funding, sponsorship deals and other perks associated with their positions. But the rank-and-file players - the equivalent of the NHL journeymen - play mostly in anonymity, their primary reward the chance to keep playing into their 20s and beyond.

Jacquie Pierri, an assistant captain with the Inferno, is a mechanical engineer who works for Atco full-time doing natural gas pipeline design. On a day in early December, she was up at 6 in the morning to drive to Edmonton for a meeting. After it was over, she headed back to Calgary and arrived less than an hour before practice, where her meal was an egg-salad sandwich bought at the WinSport cafeteria before she took to the ice for a 90-minute workout.

"Today was a little unique," Pierri said. "A normal day is a little less hectic. I usually work 8:30 to 5 - but it can be tough because I don't have time to cook and prepare meals - and it's really hard to get the compete-level up for practice after you've worked all day."

Many times, the Inferno will travel on a game day - flying cross country and then playing that same night. One time a few years back, they took a red-eye flight east and arrived in Montreal, where only two of their hotel rooms were ready for occupancy. It forced them to improvise - and they crammed 10 women into each room, getting their pregame sleeps sprawled on the beds, sofas and floors.

Jeff Stevenson, general manager of the Inferno, says that when he started with the organization three years ago, the team played at Calgary's Joan Snyder Arena, capacity 220, and often there were more empty seats than spectators. Recently, they've switched to the larger arena at WinSport and depending upon the promotions they've put on, can draw upward of 1,500 to a game.

"What I've noticed is that now we've got people who are buying season tickets, they're buying hats and jerseys and T-shirts, and they're walking into games, already geared up to cheer on the team," Stevenson said. "So we've established a very small group of loyal fans, which is great. It's a building block. But we have a rink here that holds 3,200 people. There's a lot of work still to be done to fill that on a regular basis.

That's my goal - to see that happen in the next few years."

Ouellette believes potential fans need to see women's hockey as a distinct game and entertainment entity - and instead of comparing and contrasting it to the men's game, celebrate the differences.

"One of our challenges today is that we get compared to the boys all the time," she said. "In tennis, people would never say, 'Oh, Serena Williams should play Roger Federer and see who wins' - and yet, we still hear that all the time. Our best player, Marie-Philip Poulin, doesn't train any less than Sidney Crosby. She'll never shoot as hard as he does, but their vision on the ice is incredible and exactly the same.

"We hope that we can get to a point where people recognize it is different hockey - and appreciate it the way they appreciate women's tennis as its own sport."

CWHL commissioner Brenda Andress makes a tour of the league once a year in the same way NHL commissioner Gary Bettman tours his league, in order to bring the players up to date on the growth of the game and the challenges that remain.

Recently, Andress was in Calgary, to address the Inferno players about the present and the future - and the challenges of operating in the black, with limited revenues coming in through ticket sales.

"I want them to know where the money's coming from and where the money's going to, so they have a complete knowledge of what's going on," Andress said. "They might say, 'Why aren't we getting paid?' Well, 'This is why.' The more information we can give them, the more knowledge they have of the league and the better they can support the league."

According to Andress, the CWHL product has never been better. "Now, it's just about marketing. The four teams in Canada - the parity is here, the players are phenomenal, the coaches are great, the partnerships are great. The thing that's lacking is the funding.

"They say hockey is for everyone in Canada. It isn't. It's for boys. If we get a $10,000 to $20,000 sponsor, we're lucky.

Then you look at some of the money companies are putting into male sports. It's really about individuals standing up and supporting women's sports by actually doing something - writing a cheque or buying a ticket. That's how simple it is - and that's what has to happen."

Ideally, in the CWHL's strategic plan, they would like to start paying their players soon. "But at the same time, we realize once we pay our players, we want to pay them forever," Campbell-Pascall said.

"I think we can have a future women's NHL. The players aren't going to be paid very much to start, but I think players who are 10 to 12 years old now are going to have a professional league to play in - and it's going to be solid and it's going to make money. I really believe that."

Follow me on Twitter: @eduhatschek

Associated Graphic

One of the more recent heartening moments the Canadian Women's Hockey League has seen this season was when nearly 6,000 people attended a game at Montreal's Bell Centre to watch Les Canadiennes de Montreal, whose goaltender Charline Labonté is seen preparing for the December matchup, defeat the defending champion Calgary Inferno.

CHRISTINNE MUSCHI/THE GLOBE AND MAIL

The Calgary Inferno's Haley Irwin tapes a stick ahead of her game against Les Canadiennes de Montreal at Bell Centre in Montreal in December, 2016. The Inferno will often travel on a game day - flying, then playing that same night.

CHRISTINNE MUSCHI/THE GLOBE AND MAIL

Les Canadiennes celebrate a win over the Calgary Inferno during their matchup in Montreal in December, 2016.

CHRISTINNE MUSCHI/THE GLOBE AND MAIL

After cycling bronze in Rio, Simmerling eyes Winter Olympic medal in skiing
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By DAVID EBNER
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Wednesday, January 11, 2017 – Print Edition, Page S1


VANCOUVER -- Four years ago, Georgia Simmerling was in an upper body and neck brace for seven weeks after a cartwheeling crash in a ski-cross race.

She fractured three vertebrae - C7, T2 and T3 - at the base of her neck and in her upper back. One day, at physiotherapy, an idea struck her. It was early in 2012 and she had already been to one Olympics - in alpine skiing, racing the super giant slalom at the 2010 Vancouver Winter Games. In ski cross, Simmerling aimed for the 2014 Sochi Winter Olympics.

She wondered if there was a summer sport she could pursue.

"I just had this idea," Simmerling said. "I played so many sports growing up, was super active in the summer - why not?" The why-not impulse became a multiyear odyssey. It started in rowing. Simmerling then tried track cycling, first sprinting before focusing on endurance riding. Along the way, she raced at the Sochi Olympics in ski cross. The culmination came last summer, when Simmerling helped win a bronze medal in women's team pursuit in track cycling in Brazil.

She became the first Canadian to compete at three different Olympics in three different sports.

Less than a month after the medal, Simmerling returned to ski cross. Last month, in her fifth World Cup race after an absence of nearly two years from the sport, she was back on the podium with a third-place finish. It was a significant step toward her new goal: win a medal in ski cross at the 2018 Winter Olympics in South Korea. Simmerling would become the second Canadian, after Clara Hughes, and sixth person ever to win medals at Summer and Winter Olympics.

"This would be incredible," said Willy Raine, athletic director of ski cross at Alpine Canada. "If I was a betting guy, I would put money on her. I believe she's going to do it."

'Didn't matter who else believed' Three days after Christmas, Simmerling pedalled on a stationary bike at Level 10 Fitness in North Vancouver. Sweat percolated on her brow and, as she pressed on, dripped off her nose. Simmerling, 27, was home on a break from the World Cup ski cross circuit.

The gym is popular with local professional athletes and Simmerling's been coming here since her mid-teens, when she was a rising alpine ski racer and promising soccer player.

Owner Anthony Findlay remembers the youthful Simmerling's physical fitness. As a teen, she ripped off a bunch of pistol squats - one-legged squats with the other leg extended. Findlay couldn't quite believe it.

"There are national team athletes who can't do that," Findlay said. He saw an unusual allaround ability in her. "She's not just whatever the one sport is."

Simmerling grew up skiing on Grouse Mountain, chasing after her three older brothers. "Just ripping around and a big smile on my face the whole time," she said. "Probably a little scared and loving it." She was part of an athletic family. Her oldest brother reached the CFL, playing a few games for the Calgary Stampeders.

Simmerling was 19 when she raced her first alpine World Cup downhill in late 2008. In three years, she started 18 alpine World Cup speed races, but never finished better than 29th. At the 2010 Vancouver Olympics, she had her best result, 27th, in the super G at Whistler.

But the upstart sport of ski cross drew her - the rodeo of four racers going at it head-tohead on a shorter course full of big jumps and banked turns.

"This sport is crazy," she wrote on her blog at the time. "It's really not normal." She loved it, but the big crash came during her first season, in early 2012, with the broken vertebrae and trying convalescence.

It was a turning point in her athletic career. As she resolved to succeed in a summer sport, recovery honed her work ethic and fortitude.

At the Sochi Olympics, during Simmerling's third winter in ski cross, she finished a disappointing 14th, but thereafter scored her first sustained success, a pair of third-place podium finishes. In the summer of 2014, she tried out track cycling. She sprinted to start, but "it was evident" she was better suited to endurance riding. She started to think about the 2016 Summer Olympics.

But, first, it was back to ski cross. The 2014-15 season started well. She had a pair of seconds and was ranked second overall as she came to the world championships in January, 2015. She qualified first. Then, in a training run, she got too aggressive and crashed - smashing her left wrist to pieces, breaking it in seven places. It took two plates and 10 screws to put it back together.

The ski season was over.

Her mind shifted to the bike.

The team she wanted to make was no also-ran. Canada's women won bronze in team pursuit on the track at the 2010 London Olympics and world championship medals each year since. Simmerling, guided by two coaches, headed to Los Angeles to train and produced a national-team standard time. She decided to forgo the next ski-cross season.

She made Canada's endurance track cycling development team in the fall and quickly was elevated to the senior squad.

There was skepticism. "Most people just wrote her off," Raine, the ski-cross director, said. Some in skiing questioned what looked like a foolish chase and some in track cycling wondered about the interloper.

"It's not just the physical aspect," team veteran Jasmin Glaesser said. "It's also the team dynamics. But Georgia proved herself right away. She was able - and willing - to learn."

The road was long. The training intensity was extreme. Simmerling remembered workouts that made her physically ill. There would be weeks of daily rides of five, six hours at high altitude.

She rode hard.

"She would just completely empty herself," team coach Craig Griffin said.

The payoff came in Rio.

Griffin has coached Olympic track cycling teams in Canada and in the United States since the early 1990s. Simmerling's ascent from a "nobody," as she put it, to an Olympic medalist in 18 months is unprecedented.

"That's just unheard of," Griffin said.

"There were many moments of doubt, but I just believed I could do it," Simmerling said. "It didn't matter who else believed. I accomplished something pretty amazing."

'How good can I be at this?' Arriving back in ski cross was jarring. It felt unfamiliar. Simmerling was as fast as ever, but struggled in heats against other skiers. In December, she finished ninth in her first three races. The breakthrough came in the fifth race, which she almost won, but slipped into third by a hair at the finish. She was ranked seventh after the season's first six races.

The build toward Olympic medal contention in ski cross was ahead of schedule.

The season will be back under way on Friday in Italy, the first of eight more races. After next year's Winter Olympics, Simmerling wants to get back on the bike, riding to another peak: the 2020 Summer Olympics in Tokyo.

Griffin thinks that Simmerling could ride at the 2020 Games, and again in 2024, when she would be 35.

Clara Hughes sees the same: the beginning of a bigger climb.

Hughes knows. Hughes won her first Olympic medal at 23 in cycling in 1996. She won her last at 37, a bronze in speed skating in 2010.

Hughes recognizes some of herself in Simmerling. Hughes switched sports, driven by an "insatiable curiosity" and a passion to prove herself again and again.

"Georgia is doing what she's doing because she can't not do it - and that's how I felt," Hughes said. "It wasn't about being the first person, or this or that. It was about: 'How good can I be at this?' "

Associated Graphic

Canada's Georgia Simmerling, left, and Jasmin Glaesser celebrate after winning bronze in the women's team pursuit finals track cycling event at the Rio Olympic Games in August, 2016.

GREG BAKER/AFP/GETTY IMAGES

OUR MAN IN DALLAS: CANADA'S COWBOY
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From community fields in Windsor, Ont., to one of the largest cathedrals in U.S. football, Tyrone Crawford's path to the NFL hasn't been easy. This Sunday, his Cowboys will take on Aaron Rodgers and the Green Bay Packers in Dallas in hopes of getting one step closer to the Super Bowl
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By RACHEL BRADY
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Thursday, January 12, 2017 – Print Edition, Page S1


Tyrone Crawford's football career began in Windsor, Ont., some 12 years ago, where he played on a high-school squad that walked four blocks every afternoon to practise in the outfield of a community baseball diamond.

This Sunday, he'll suit up for the Dallas Cowboys against the Green Bay Packers in the NFL's divisional playoffs. The 27-year-old Canadian defensive lineman will be among the Cowboys' key passrushers, barrelling toward the hottest quarterback of the moment, Aaron Rodgers.

Crawford, a 6-foot-4, 285-pound defensive end, is in the fifth year of his NFL career. His journey from a little-recruited but freakishly athletic teen from a border city to a starting job for America's Team has been a unique one. He signed a $4.5-million (U.S.) contract extension in 2015 that made him the highest-paid Canadian to play professional football in North America. Raised by a single mom, he's overcome many hurdles, from a detour through junior college before he could play at Boise State University, to a heart murmur discovered at the NFL combine, and a couple of injuries that required surgeries.

This week the Cowboys get Crawford back from a two-game absence with a shoulder injury.

He had 28 tackles and 4.5 sacks this season in 14 starts as Dallas battled to the NFC's top playoff seed. Playing for one of the most promising Cowboys teams since the mid-1990s, it's not crazy to believe the big Canadian could reach the Super Bowl next month in Houston.

Growing up in Windsor, raised by his mother, Tara, alongside his younger brother Tarrence, Crawford played many sports, often as a way to keep busy while his mother was working. During his time at Catholic Central High School, he won three provincial gold medals in shot put and one in basketball. He was also a standout in javelin and discus. As a football player, he rarely left the field for the Comets, a squad light on players. He played in the slot and tight end, sometimes offensive line or running back. He also played defensive end and outside linebacker, and even returned kicks and punts.

"When they're that special, you've got to utilize their tools, and he was like a man among boys," said Jalil Khoury, still today the football coach at Catholic Central. "He could jump through the roof and he caught anything that was thrown to him."

"He was bigger and stronger than anyone else. He never seemed to mind practising on a baseball field - I think he would have practised on the road if he had to."

Crawford was friends with another star player at the high school - Michael Atkinson, who is today a defensive tackle for the CFL's Hamilton Tiger-Cats. Their school had no football field, so they lumbered four blocks in their equipment to practise in the grassy outfield of a community baseball diamond, simply imagining yard markers, end zones and uprights until game day, when they could go on the road or hold home games at a community football field.

The two boys dreamed of playing Division I college football in the United States. They dedicated to a strength and conditioning regimen but weren't sure how to get U.S. schools to notice them in Windsor, beyond editing together their own highlight tapes.

They garnered interest from a few schools, but it was Boise State University in Idaho who seemed most keen - a school they knew little about, except their signature blue field. Defensive co-ordinator Pete Kwiatkowski visited their humble practice field in Windsor.

There was one catch though - Crawford didn't have all of the credits he would need to qualify academically for Boise State.

"We had the same skill set, but my dreams were less than his at the time because of the academics," recalled Crawford, reached by phone in Texas this week. "I had big dreams for him and hoped maybe I could follow him to Boise eventually but I had to take the long route to get there."

Atkinson headed straight for Idaho after graduating high school, and Crawford went to catch up on courses and play at a junior college, Bakersfield College in California. After two successful seasons there, lots more universities wanted him, but he chose Boise State.

"We kept in touch by phone a lot when he was at Bakersfield and I kept telling him, 'You're going to be here before you know it,' " Atkinson said. "We built a strong bond and once he arrived at Boise, that bond seemed to filter down and make our whole defensive line stronger. He looked like a 30-year old man by the time he arrived at Boise so no one questioned his skills. They'd often say to us, 'What do they feed you guys up there in Canada?' " Crawford had 13.5 sacks and 76 total tackles over two seasons at Boise State, garnering him NFL attention. But during his physical at the NFL combine, it was discovered he had a heart murmur that he had known nothing about.

Some teams may have been scared off by that news, but not the Cowboys. Doctors told Crawford it was easily manageable.

Dallas picked him in the third round of the 2012 NFL draft, 81st over all, trusting the doctors and loving Crawford's football instincts and his great pursuit.

The years since haven't all been smooth. He tore his Achilles in 2013, had surgery and missed the season. He played most of the 2015 season with a torn rotator cuff in his right shoulder, and then had surgery on that. Now his left shoulder is ailing - but it won't keep him from Sunday's playoff game.

Crawford often returns to Windsor and speaks at his old high school. He also runs a camp there called Windsor's Finest Football Academy, along with other areaborn pro football players. Even though he's surrounded daily by posh football facilities in Texas and drives by some jaw-dropping high school football stadiums, he still has a deep appreciation and love for his own football upbringing.

"It was all we had in Windsor, but we always had a lot of fun playing - we felt a little like Rocky," Crawford said. "Football is the pride of Texas and I really appreciate that, but it gets real hot here sometimes, and I prefer playing in the cold."

Associated Graphic

Tyrone Crawford of the Dallas Cowboys is among only a few Canadian-born players whose teams are still vying for Super Bowl glory this season. The defensive end recently signed a lucrative contract extension, making him the highest-paid Canadian to ever play professional football.

TOM PENNINGTON/GETTY IMAGES

RedBlacks win nail-biter in overtime
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Dominant Stampeders come apart at the seams, as Ottawa QB Burris has a night for the ages with record passing numbers
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By DAVID SHOALTS
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Monday, November 28, 2016 – Print Edition, Page S2


TORONTO -- A first-half runaway almost turned into a second-half nightmare for quarterback Henry Burris and the Ottawa RedBlacks.

But Burris, 41, now officially the grand old man of the Canadian Football League, struck for an 18yard touchdown pass to Ernest Jackson on the first drive of overtime, giving the RedBlacks, a third-year expansion team, their first Grey Cup with a 39-33 win over the heavily favoured Calgary Stampeders. Burris is the oldest player to start at quarterback in a Grey Cup game and he had a night for the ages, passing for more than 400 yards, the first player to pass for that much since Danny McManus did it in 1996 in a losing effort for the Edmonton Eskimos.

Burris and the RedBlacks had to sweat out Calgary's corresponding drive in overtime but quarterback Bo Levi Mitchell could not find a receiver in three tries and one of the greatest upsets in CFL history was in the books. It was also one of the most dramatic Grey Cups ever, as the Stamps fought their way back into contention in the second half.

The final minute of the fourth quarter saw Ottawa defensive back Abdul Kanneh make both the most egregious mistake of the night and one of the best plays of the game. First, he grabbed a towel in the belt of Calgary receiver Kamar Jorden that gave the Stampeders a first down and goal-to-go on the Ottawa eight-yard line.

Then, after backup quarterback Andrew Buckley was sent in to try and run in his second touchdown of the game, Kanneh tripped him, forcing Calgary to settle for a 10yard field goal with nine seconds to play that forced overtime and gave Ottawa another life.

After Burris opened the third quarter by directing another scoring drive that ended with a nineyard touchdown pass to Brad Sinopoli, it looked like there was an easy path to one of the CFL's great upsets. But the Stampeders somehow collected themselves and it was the RedBlacks who started making mistakes that ate into their 27-7 lead.

The comeback started with a 32yard Rene Paredes field goal.

Then Calgary quarterback Bo Levi Mitchell, who had a horrendous first half, finally started hitting his receivers with Lemar Durant catching a 33-yard touchdown pass. The big mistake on that one was committed by Ottawa defensive back Antoine Pruneau. He somehow did not touch Durant after the latter fell after making the catch, allowing Durant to get up and run for the major. A video review let the touchdown stand.

Late in the third quarter, after a Calgary drive was helped along by a pass-interference penalty to Ottawa, Andrew Buckley replaced Mitchell with the ball at the Ottawa one-yard line. Buckley ran for the touchdown, becoming the first Canadian quarterback to score a touchdown in the Grey Cup since Russ Jackson did it for the Ottawa Rough Riders in 1968.

Burris went back out for yet another scoring drive, ending it at 6:03 of the fourth quarter with a one-yard plunge for his second rushing touchdown. One oddity was that both converts were missed, on the Buckley and Burris majors, leaving the score 33-23 for Ottawa. RedBlacks defensive back Forrest Hightower gave his team some breathing room with his second interception of the game, stopping a Calgary drive with 3:21 left in the fourth quarter. But Mitchell and the Stampeders came back a minute later, working their way into Ottawa territory where DaVaris Daniels, on third-down and two yards, ran 19 yards for a touchdown with 1:38 left in the fourth quarter. The convert cut Ottawa's lead to 33-30, setting up Glenn Love's recovery of an on-side kick for Calgary that started the heart-stopping final 90 seconds of play.

The team that finished the regular season 15-2-1, cruised into the Grey Cup by crushing the B.C. Lions, who had the second-best record and was ready to be anointed the greatest CFL team of all time came apart at the seams.

Mistakes abounded, from Mitchell throwing interceptions to special-teams fumbles to bad penalties.

While Burris was picking apart the Stamps secondary with the help of receivers Greg Ellingson and Sinopoli, Mitchell looked nothing like the quarterback who was just elected the CFL's mostoutstanding player in the regular season.

Things were equally unhappy on the defensive side of the ball for the Stampeders. As they walked off the field at half-time, Calgary defensive coordinator DeVone Claybrooks and defensive end Charleston Hughes engaged in a spirited chat.

No doubt the subject was to do with getting pressure on Burris, who passed for 266 yards, completing 20 of 25 passes, one for a touchdown. He also scored one himself on a one-yard plunge.

That one ended a crisp opening drive for Burris as he marched the RedBlacks 66 yards on 10 plays and eliminated any doubts about him and his knee.

Mitchell and the Stampeders answered that touchdown with an efficient drive of their own. He completed four consecutive passes, ending a 79-yard drive with a strike to running back Jerome Messam.

It looked like the Stampeders were in charge and all was right with the CFL universe. But Burris and the would not go quietly, driving for a 37-yard field goal by Ray Early and then hit Patrick Lavoie with a six-yard scoring pass at 6:46. Early added a 29-yard field goal and the RedBlacks had a stunning 20 points by halftime.

However, Burris quickly went to work on any doubts when the third quarter started. He directed a 69-yard touchdown drive and ended it with a nine-yard pass to Sinopoli at 6:21 that gave Ottawa a 27-7 lead after the convert.

But things were far from settled in what turned out to be a far from your ordinary championship game. That touchdown shook the Stampeders from their torpor and with the RedBlacks now making most of the mistakes, the tension of the final 23 minutes and 39 seconds of the game began.

Associated Graphic

Patrick Lavoie of the Ottawa RedBlacks scores a touchdown during the first half of the 104th Grey Cup game against the Calgary Stampeders in Toronto on Sunday.

VAUGHN RIDLEY/GETTY IMAGES

Ottawa RedBlacks' Brad Sinopoli, right, scores a touchdown as Calgary Stampeders Joshua Bell and Joe Burnett try to defend during Sunday's Grey Cup game.

CHRIS HELGREN/REUTERS

Jays rally behind minor-league prospect after disastrous house fire
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By ROBERT MACLEOD
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Friday, January 13, 2017 – Print Edition, Page S1


TORONTO -- They gathered at a tony downtown Toronto restaurant on Wednesday night for a dinner and a fundraiser in support of a rising young athlete they had heard of but never met.

There was a silent auction with baseball-themed memorabilia helping to raise money in support of Anthony Alford, a top prospect for the Toronto Blue Jays whose family home in Columbia, Miss., burned to the ground just after Christmas.

"A lot of people from this city came together, some people came from Montreal, just supported the family," the soft-spoken Alford said on Thursday, still a bit in awe at the generosity shown to him, primarily from strangers.

"My family, they're very thankful for what the city has done for us," Alford said. "We're just really grateful."

Alford was speaking from the Blue Jays clubhouse in Rogers Centre, the facility where he and 10 other Blue Jays prospects have spent the past week at a rookiedevelopment camp, being shown the ropes and what life can be like at the big-league level.

"The main objective of the camp is to acclimate these players to the faces, the facilities, the city - what they will go through from day to day as a big-leaguer in Toronto," said Gil Kim, the Blue Jays' director of player development.

"I think the mission here is to make these guys feel as comfortable as they possibly can."

Alford is just 22 and he is still trying to make his mark in a game he only took up on a full-time basis three years ago after giving up on football, which he played at the Division I level in the NCAA.

Obviously a tremendous athlete, Alford was selected by the Blue Jays in the third round of the 2012 Major League Baseball draft, the 112th pick.

Alford likely should have been selected higher, but teams were scared off after he declared he also wanted to continue playing football along with baseball.

He signed a $750,000 (U.S.) contract with the Blue Jays on the condition he could also continue to play football, which he did for two seasons at the University of Southern Mississippi and then the University of Mississippi.

After the 2014 U.S. college season, Alford, who played quarterback and safety, gave up on football and decided to pursue his baseball career full time.

Last season, playing with the Dunedin Blue Jays, Toronto's Class A affiliate, was trying enough for the 6-foot-1, 215-pounder.

The sturdy and speedy centre fielder strained his knee in the opening game of the season, which kept him out of the lineup for about three weeks. In June, he suffered a concussion after colliding with a teammate in the outfield. That sidelined him for another couple of weeks.

But all that seemed minor compared to the disastrous fire that engulfed the family home in Columbia in the early morning of Dec. 28, 2016.

Alford's 16-year-old sister, Ayanna, was the only person home at the time and fortunately got out of the house unharmed. Everything was destroyed.

By the time he arrived from nearby Sumrall, Miss., where he lives, Alford said the home was a smoking pile of rubble. He said authorities still don't know what sparked the blaze.

"My 16-year-old sister, she was at home asleep," Alford said. "She said she heard a popping noise and she woke up and the house was on fire. I'm just glad no one got hurt. Material things can be replaced, but a life can't be replaced."

His sister, mother and father, have been staying at his house since.

Word of the fire quickly spread to the Blue Jays organization and players, including Kevin Pillar and Devon Travis, started lending a hand, primarily through their popular social-media platforms.

Soon a GoFundMe site was established to help the Alford family get back on their feet. A goal of $20,000 was set and more than $14,000 has been collected thus far.

"I think it had a lot to do with social media," Alford said.

"Thanks to guys like Kevin Pillar and Devon Travis, who brought awareness and helped get Blue Jays nation behind [the cause].

They really reached out and help support and sent kind words.

Like I said, we're really thankful for that."

Alford's play on the baseball diamond was spotty. He finished the season at Dunedin with a .236 batting average, although he did have 18 stolen bases in 92 games.

But his play took off late in the season, when he hit .280 in August, and it was a tear he maintained into the Arizona Fall League. In 23 AFL games he hit .253 and was selected as an allstar.

Alford says he does not know what plans the Blue Jays have for him or at what minor-league level he will start the season.

But he said he is encouraged by the progress he made late in 2016 and is anxious to get back on the field.

"He's in a very good spot all the way around and we're excited about this year," Kim said. "We think it's going to be a pretty big year for him."

On Thursday, second baseman Darwin Barney and outfielder Ezequiel Carrera both agreed to one-year contracts with the Blue Jays, avoiding arbitration. The team said Barney's deal was worth $2,887,500, while Carrera's is for $1,162,500.

Barney, who earned $1,050,000 last season, batted .269 with four homers, 19 RBIs and 13 doubles in 104 games. The utilityman played at least 25 games each at second base, third and shortstop while making 32 starts at second - his most at any position. He also played five games in left field and pitched an inning.

Carrera batted .248 with six home runs, 23 RBIs and seven stolen bases over 110 games in 2016.

Associated Graphic

Right fielder Anthony Alford throws at Blue Jays' spring training in Dunedin, Fla., in February, 2016.

FRANK GUNN/THE CANADIAN PRESS

Despite a messianic McDavid, the Oilers cannot contain a hungry Sens squad
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By ROY MACGREGOR
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Monday, January 9, 2017 – Print Edition, Page S1


There is simply no argument - Connor McDavid is, indeed, the Second Coming.

At least as far as the struggling Ottawa Senators are concerned.

In a rather local all-star week in the nation's capital, Alexander Ovechkin was the First Coming on Saturday, as his Washington Capitals extended the Senators losing streak to four games with a 1-0 victory.

McDavid was second on Sunday evening, contributing a couple of assists in a close game that saw leads change twice.

The Senators ultimately triumphed with a 5-3 victory over McDavid's Edmonton Oilers, thereby ending Ottawa's sorry streak.

It may be temporary relief, of course, as the next two home games are Thursday against Sidney Crosby and the Pittsburgh Penguins and Saturday against Auston Matthews, Mitch Marner and the improved Toronto Maple Leafs.

To strain the analogy to its end, McDavid answered the Senators' prayers Sunday evening when neither he nor his young teammates could prevent Ottawa from launching a successful comeback on two goals late in the second period.

The victory was timely for Ottawa in that their 21-14-4 record kept them in third place in the Atlantic Division, behind the Montreal Canadiens and Boston Bruins.

The Oilers, now 21-14-7 are also fighting to stay playoff bound in their Pacific Division.

The Oilers are, despite this setback, a seriously improved team.

"I think everyone believes in the room," McDavid told reporters just before the game.

"Obviously, there were a lot of questions coming into this year - you know, how we've done in the past. I think we've been able to answer those early in the season and we've set ourselves up, hopefully, for a pretty special second half."

McDavid has personally had a spectacular first half, the 19-yearold captain leading all NHL scorers with 48 points.

"He's obviously one of the best players in the world," Senators forward Mark Stone said earlier in the day. "We're going to have to find a way to shut him down."

They couldn't, exactly, but they did enough to end their unwelcome streak.

Scoring this night, however, fell first to the Senators. Less than four minutes in, Zack Smith cuffed in a loose puck following some simply ludicrous puck control by the Oilers in their own end. It was Smith's ninth goal of the season.

Eleven minutes later, Ottawa finally broke its power play jinx after going 0-14 in their fourgame losing streak. With Edmonton's Jordan Eberle off for tripping, Mike Hoffman one-timed a Stone pass into the short side behind Edmonton goaltender Jonas Gustavsson.

The Oilers came to life in the second period, when Patrick Maroon scored his first of two at the end of an Edmonton power play. Soon after, Maroon scored again - his 16th of the season - on a nice set-up from McDavid.

McDavid had moments earlier failed to hit the net with his shot on a clear breakaway against Ottawa goaltender Mike Condon.

Edmonton went ahead briefly when Leon Draisaitl scored his 15th of the year from behind the Ottawa net. That's correct, behind.

McDavid had slipped the puck in off the boards and Draisaitl, swooping behind Condon's net, clipped a quick shot on his backhand, the puck striking Condon and falling in behind him.

Ottawa, however, came back quickly to tie matters at 3-3 off a lovely three-way passing rush that saw Stone register his 12th of the year.

And then, with time running out in the second period, Ottawa again scored with Tom Pyatt was able to poke the puck past Gustavsson from a scrum in front of the Edmonton crease. It was Pyatt's fifth goal of the year.

The Oilers pressed hard in the final period but Condon was superb in the Ottawa net. It more than made up for his miscue on the Draisaitl goal.

Kyle Turris finished off the Ottawa scoring with an emptynet goal.

There were actually three story lines coming into this match: the Senators' losing streak, the arrival of the game's best teenager and the Mysterious Case of Bobby Ryan.

Ryan, a former 30-goal scorer with a $7.25-million (U.S.) contract that runs through the 202122 season, was a healthy scratch for the Washington game on Saturday. Head coach Guy Boucher would not say why, no matter how hard he was pressed.

"There's complex issues that don't need to be said out here," Boucher said when asked if there was a discipline issue.

Ryan is currently ninth in team scoring with seven goals and seven assists. He had the excuse of an injured hand earlier in the season, but his contract and slim production have turned him into a bit of a whipping boy on the sport talk shows.

Ryan was back in the lineup against the Oilers.

Some local fans had also been disgruntled by the style of play Boucher prefers - suffocating defence first at all times - and perhaps Ryan prefers a more wide-open style. Whatever, neither side was saying.

Whatever, the early fall attendance problems of the Senators seem to have largely vanished with the team's improved record - it might not be pretty, but it works - and the four-game run with the game's biggest stars coming to town can only help.

The Senators currently rank 23rd in attendance, averaging 15,810 fans a game.

This night had 17,724 in attendance, with Crosby and Matthews sure to pack Canadian Tire Centre later in the week.

Will the Senators be able to bring their new streak to two?

Three?

Follow me on Twitter: @RoyMacG

Associated Graphic

Jonas Gustavsson and Connor McDavid of the Edmonton Oilers defend against Erik Karlsson in Ottawa on Sunday.

JANA CHYTILOVA/FREESTYLE PHOTO/GETTY IMAGES

Both Calgary and Edmonton have redemption stories
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By ERIC DUHATSCHEK
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Monday, January 16, 2017 – Print Edition, Page S1


CALGARY -- Redemption stories can be constructed many different ways and, from Saturday's close encounter in the improving Battle of Alberta, two emerged.

The first involved the Calgary Flames' Brian Elliott, who was signed in the summer to provide the team with answers in goal, but started the season badly, thanks mostly to the Oilers and to Connor McDavid. Elliott lost twice to the Oilers in the first two nights of the season, by scores of 7-4 and 5-3, and McDavid contributed heavily to his misery, scoring six points in all.

It took Elliott months to get his season back on track, but it is now, and the improvements were evident during Calgary's 2-1 shootout loss, in which he made a series of timely, highlight-reel saves to preserve a single point in the standing for the Flames.

With Elliott playing well and partner Chad Johnson a model of night-to-night consistency, the Flames have two reliable goaltenders to choose from and have their best hope to make the playoffs after missing them for six of the past seven years.

Depth in goal is a luxury a dozen teams, including the Oilers, don't have, and it could seriously affect a tight playoff race in a year in which virtually every coach in the league is preoccupied with the tightly compressed schedule and all the back-to-back games they must play.

The other redemptive narrative involved the Oilers' emerging star Leon Draisaitl. He is easy to overlook because of the sheer fascination with McDavid, the NHL's leading scorer who celebrated his 20th birthday Friday.

At the start of last season, the Oilers sent Draisaitl to the minors, this after he'd played 37 games as an NHL rookie the year before. Draisaitl spent most of October, 2015, playing for Bakersfield in the AHL and, upon his return, immediately looked like a ready-for-prime-time player.

Draisaitl was good last year and has been great this year, the perfect complementary piece to McDavid.

Draisaitl is tough, skilled and able to elevate his play when it needs to be elevated.

He showed a glimpse of his promise during September's World Cup tournament, a young gun who didn't play for the official kids' team only because he is from Germany, and the 23-and-under team was chosen entirely from North Americans.

But he was excellent on a veteran Team Europe and the decision to take him third over all in 2014, behind Aaron Ekblad and Sam Reinhart and ahead of the Flames' Sam Bennett, looks prescient and sound now. The Oilers have made a lot of mistakes at the draft table in the past decade - the primary reason it has been 10 years since they made the NHL playoffs - but Draisaitl isn't one of them.

The Oiler rebuild was originally structured around Taylor Hall, Ryan Nugent-Hopkins and Jordan Eberle (and, presumably at one point, they thought they would get a contribution from Nail Yakupov, too).

Yakupov is gone, with virtually nothing coming back in return.

Hall was traded, too - replaced by a defensive defenceman, Adam Larsson.

Eberle is struggling to score, though he showed genuine signs of coming out of his slump Saturday, foiled mostly by Elliott. Eberle needs to find the offensive range again to balance the attack.

Nugent-Hopkins is evolving into something else, not a dominant offensive player but a responsible two-way guy and useful in his own way.

Unlike Calgary, the one area of concern remains goal, a position the Oilers are still trying to sort out. Last week, they waived Jonas Gustavsson, who failed to win the confidence of coach Todd McLellan, in favour of Laurent Brossoit.

In the meantime, they will rely on Cam Talbot as their defined No. 1 and hope that he stays healthy and doesn't burn out.

The Oilers have been winning the close ones of late. An overtime record of 7-4-1 includes the shootout win over Calgary and back-to-back OT wins over the New Jersey Devils in a five-day span. Skill can do that for you - the ability to win the three-onthree battle when the ice opens up in extra time, or to win the penalty-shot competition if the game remains deadlocked after 65 minutes.

In the playoffs, neither is an option.

The need to win close, lowscoring, tight games is paramount. That's what Saturday's game looked like, a tight-checking playoff game, with the goalies taking turns making big saves, with Talbot helpfully bailed out twice in the late going when shots by the Flames' Deryk Engelland and Johnny Gaudreau rang off the goal post and stayed out.

The Oilers' date with the Flames on Saturday was billed as the first meaningful game in the Battle of Alberta in 11 years.

It had been that long (April, 2006) since the teams played a post-Christmas match, where both teams were actually holding down a playoff spot. Calgary last made it to the Stanley Cup final back in 2004, Edmonton in 2006.

What followed was mostly a lost decade for both franchises.

But hope springs eternal and while neither team is quite ready to declare the turnaround complete, the signs are largely positive.

It makes the rematch - next Saturday in Calgary - all the more compelling.

U.S. TAKES GOLD IN SHOOTOUT THRILLER
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After a week and four days, seven games, three full periods and 20 minutes of overtime, Canada fought to the bitter end, falling to the United States in a shootout 5-4 in the world junior hockey championship, Sean Gordon writes
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By SEAN GORDON
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Friday, January 6, 2017 – Print Edition, Page S1


MONTREAL -- Star power is an actual, important thing in sports, but the dearth of same doesn't mean there can't still be a decent or even remarkable spectacle.

Each year the world junior championship must deal with the fact that many of the best 18and 19-year-old players on the planet will be otherwise occupied with their NHL teams.

The participants in the 2017 championship game, for instance, assembled their squads from talented, but mostly secondary prospects.

The result was a sensational, rollicking, closely-fought final that ended in a shoot-out with U.S. victorious on the strength of Troy Terry's fourth shootout goal of the competition.

It qualifies as a shame when a classic game of hockey is played that someone has to lose in a skills competition, but at least the shoot-out has the benefit of being categorical.

Canada's lineup featured 10 first-round NHL draft choices, but only two taken in the top-10; The U.S. team included one top-10 pick and six first-rounders - not every draft year can be studded with talent the likes of Connor McDavid or Auston Matthews.

But Canada and the United States has become the pre-eminent national rivalry in world hockey; not much is required for the bitterness to take hold.

Indeed, Canadian forward Julien Gauthier didn't even wait for the game to officially begin before getting into the face of gigantic American forward Jordan Greenway - giving him an introductory chirp and crosscheck as the teams lined up for the opening draw.

The Americans entered the contest with a pristine 6-0 record, including a fairly comfortable round-robin victory over a Canadian team that has only improved since the set-back.

This Team Canada may not overwhelm you with chances from the rush and dizzying displays of skill (although there is some of that).

As Canada coach Dominique Ducharme said after an emphatic display against Sweden in the semi-final round, "we played like Canadians play."

Well, Americans have a nicely effective way of doing things, too.

Canada scored twice in the first - defencemen Thomas Chabot and Jeremy Lauzon, on a peach of a snapshot.

The United States replied with a pair in the second - defenceman Charlie McAvoy, and Kiefer Bellows on a power-play deflection.

In the third, Canada scored twice (more Quebecois production from Nicolas Roy, on a power-play, and Mathieu Joseph, on a breakaway). The United States replied within 24 seconds (Bellows again) and again two minutes later (Colin White).

Then it was up to goaltenders Carter Hart of Canada - monumental in the semi-final - and Tyler Parsons to parry wave after wave of attacks (the United States edging the scoring chance count).

The game went to overtime, as these things must.

This year's world junior showcase has been blighted by low attendance figures - particularly in Montreal - but Bell Centre was close enough to solidly packed to forestall any quibbling over numbers, and loud.

Redemption may be too strong a word, let's just say it was an upbeat conclusion to the event.

Hockey Canada's Scott Smith allowed the overall attendance was a disappointment, and said the federation's aim is to strike the right balance between "legacy funds" (ie. profit) and accessible ticket prices.

"There are definitely some learnings," he said.

René Fasel, the Zurich dentist who heads the International Ice Hockey Federation, was blunt in his assessment: "the ticket prices were too expensive, we must call a spade a spade."

He also said Hockey Canada and its member federations and partners, including the IIHF, stand to make "a big profit."

Earlier, Russia outlasted Sweden to win the bronze medal game 2-1.

It was the seventh successive year Russia has claimed a spot on the world junior podium.

Even though the medal wasn't their preferred colour, a noisy celebration kicked off in the team's room.

Defenceman Mikhail Sergachev, a Montreal Canadiens draftee who has felt the NHL atmosphere in Bell Centre was plainly just content to have a medal around his neck.

"They cheered for me for the Canadiens, they cheered for me today, so I'm happy," he said.

Associated Graphic

Team USA's Clayton Keller, left, is levelled by Mitchell Stephens of Canada during the third period of the world junior hockey championships gold-medal game at Montreal's Bell Centre on Thursday.

RYAN REMIORZ/THE CANADIAN PRESS

BOARD GAMES
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Monday, November 28, 2016 – Print Edition, Page B8


Canadian National Railway: Flat fee changeover CN Rail adopted a new all-inclusive retainer in 2015, paying directors $35,000 (U.S.) a year in cash and $200,000 in share grants, but no longer paying meeting attendance fees. Under the new system, total pay averaged $378,363* (Canadian) a director in 2015, up 22 per cent from $311,303 in 2014. (CN pays directors in U.S. dollars but reports compensation in Canadian dollars, and said pay rose 6.5 per cent in constant U.S. dollars.)

CN said retainers were raised "given that they now apply regardless of the number of meetings attended by the directors." Royal Bank of Canada: Raising the retainer The bank adopted a flat-fee pay structure in 2010, paying a retainer of $185,000 in 2011 to cover all of a director's work during the year. There are no extra fees for attending meetings or sitting on committees, although committee chairmen get extra pay. The bank increased the retainer to $210,000 in 2014 and to $250,000 in 2016, for an increase of 35 per cent since 2011, citing growing responsibilities, greater time demands and the need to recruit internationally.

Goldcorp: Cutting director pay

In recent years, Goldcorp Inc. has made changes to temper its pay levels after total pay per director climbed 21 per cent to an average of $319,000* (U.S.) in 2015 from $264,000 in 2013. In 2015, the board introduced a cap on its annual grant of restricted share units, and in 2016 it switched from paying directors in U.S. dollars to paying the same face amount in Canadian dollars, representing a 28-per-cent pay cut based on the average exchange rate in 2015. The company said the changes align directors with shareholders.

Valeant Pharmaceuticals: Big fees but not for big shareholders

The troubled drug maker has never shied away from big pay packages, and pay for board members is no exception. Directors receive an annual cash retainer of $75,000 (U.S.), share units worth $375,000, and additional fees for sitting on board committees for total average pay of $490,000* per director in 2015. Total pay climbed significantly after Valeant merged with Biovail in 2010, with Biovail's premerger cash retainer set at $50,000 plus share units worth $110,000. Bill Ackman and Stephen Fraidin from Pershing Square Capital Management LP, Valeant's largest shareholder, opted to take no pay as directors after joining the board in 2016.

Open Text: Discretionary pay

Open Text Corp. pays its directors $50,000 (Canadian) a year in cash, but also provides a discretionary annual grant of share units. The company's shareholder proxy circular does not disclose the amount of the discretionary award in 2016. Instead, the compensation disclosure shows the total value of all equity awards, including cash fees that directors opted to take in share units. Total pay averaged $329,000* a director in fiscal 2016 ended June 30, up 12 per cent from $293,000 in 2015.

*Excluding board chairman, lead director and directors who didn't serve the full year.

Associated Graphic

BRENT LEWIN/BLOOMBERG

FRED LUM/THE GLOBE AND MAIL

GOLDCORP

LUCAS JACKSON/REUTERS

The new TD: CEO Bharat Masrani's quiet revolution
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By TIM KILADZE, JAMES BRADSHAW
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Saturday, January 14, 2017 – Print Edition, Page B1


In the summer of 2014, shortly before taking over at TorontoDominion Bank, Bharat Masrani was asked about his vision for Canada's second-most profitable company. For someone about to become chief executive officer, he had kept a low profile, and investors and analysts were hungry for clues about his plans. How would he change the bank?

Without a moment's hesitation, he answered by promising no revolution at all. "I feel like an equal partner of what this bank is today and hence, I don't feel compelled to change."

Mr. Masrani may have seemed bold in taking credit for building TD into a force, but he wasn't exaggerating. He worked closely with Ed Clark, TD's charismatic CEO, for more than a decade and together they made many major moves, including a decision to spend heavily to expand in the United States. With his fingerprints all over the bank's existing strategy, Mr. Masrani didn't see a reason to sell the board on a new one.

But the status quo he promised lasted less than one quarter.

In December, 2014, a month into Mr. Masrani's tenure, the new CEO laid out a new goal "to increase efficiency and streamline our cost base" - banking lingo for slashing expenses and jobs where possible.

The rationale was a sudden change in circumstances. Oil prices were crashing and Ottawa's warnings about onerous consumer-debt loads were growing louder. Ultralow interest rates had sparked a borrowing binge by consumers, and from 2009 to 2014, TD's total mortgage portfolio almost doubled in size to $199billion. But housing-driven prosperity can only go so far (and, as U.S. banks learned a decade ago, it comes with its own risk). All of this played out against a backdrop of stubbornly low economic growth and competitive threats from new startups.

Mr. Masrani's quick fix was to endure $686-million in restructuring charges over 12 months, to strip out as many expenses as he could.

That was only the beginning. In the two years since, Mr. Masrani unveiled a revamped wealthmanagement strategy, complete with the launch of in-house, lowcost exchange-traded funds; embarked on a capital-markets expansion, particularly in the United States; pulled the trigger on the $1.3-billion (U.S.) acquisition of the bank operations of Scottrade Financial Services Inc. and came close to buying Richardson GMP, a Canadian firm with $28-billion in assets under management.

Under Mr. Masrani's watch, TD has invested heavily in digital banking tools, a strategy that seems a modest departure from its long-standing focus on in-person branch banking and customer service.

Most recently, the bank announced the retirements of long-time leaders in multiple business units, including Mike Pedersen, the head of the U.S. personal and commercial bank - TD's main vehicle for long-term growth.

So much for not feeling compelled to change.

"One of the hallmarks of TD is its ability to adapt to the environment it finds itself in, rather than hoping, praying that the environment will go back to the good old days," Mr. Masrani said in a recent interview at TD's Toronto headquarters.

Asked whether he reversed course on his initial promise, the CEO practically scoffs. "I wouldn't put it in your words, that there's been some dramatic shift here, because there hasn't," he argues.

Mr. Masrani said TD's decadelong expansion resulted in duplication, which justified his early cost-cutting. Bay Street largely agrees with him. "They'd had a couple of false starts on getting stricter on expenses," said Robert Sedran, an analyst at CIBC World Markets. Then, just as the new CEO took over, the prospects for revenue growth began to look more daunting, partly because of the weakness of the Canadian economy. "In that environment, the cost control became something that was no longer optional."

Expanding TD's wealth-management arm seemed equally necessary. Because baby boomers are leaving the work force in droves - Canada has 250,000 new retirees every year, a figure that could approach 400,000 soon - demand for financial planning is rising fast. On this front, TD had to play catch-up.

The bank holds a 41-per-cent stake in TD Ameritrade Holding Corp., the largest discount brokerage in the United States, and also recently increased its wealth exposure by acquiring New York-based equity-asset manager Epoch Partners in 2012.

But something was still missing.

As the only large Canadian bank that hadn't acquired an independent dealer after Ottawa relaxed ownership rules in the 1980s, TD didn't have a robust retail advice platform - which is crucial to landing high-networth clients who seek tailored service.

TD's money-management arm also wasn't well integrated with its retail network. "Selling wealth through the branches is an area where perhaps TD has not been as strong," Mr. Sedran said.

Under Mr. Masrani, TD has implemented new rules, such as shuffling wealth clients with under $100,000 in assets to its branches, where it offers more basic products such as low-cost ETFs. A closer connection between wealth and the branches is expected to help the bank cross-sell products, so a client who has only mutual funds can be offered a credit card as well, for example.

The bank also rebranded its retail wealth business to TD Wealth Private Wealth Management, and pledged to add more than 130 investment advisers by 2020 - a rare move at a time when most rivals are trimming their adviser ranks. TD was working to make up ground, which helps explain why it was considering buying Richardson GMP for $600-million last fall; the firm specializes in high-networth clients. Because the deal died, TD is left building out its own network over the long haul.

What Mr. Masrani is doing with TD Canada Trust, the domestic retail bank that contributes 64 per cent of total profit, has been harder to decipher. He installed a new group head in 2015. The former leader, Tim Hockey, left in a surprise move to run TD Ameritrade, and the current leader, Teri Currie, is faced with translating TD's customer-service strength to a digital world. "We spend a lot of time and effort on how we make sure this particular [mobile] functionality you have is from TD, and on creating that emotional connection," Mr. Masrani said.

There's a lot to do. TD touts its "legendary" customer service, which includes longer hours at bank branches than its competitors offered, but "technology is working to make that advantage less important in a world where you have 24/7 banking on your mobile phone," said Cormark Securities analyst Meny Grauman. Plus, all the banks are building from scratch on a relatively level playing field. "You have a dynamic where the leader is more vulnerable than the laggards in this respect."

Getting the digital shift right is crucial. The retail division's profits were flat last year, which was rare to see in the postcrisis bull market for banks, and TD also lost its coveted J.D. Power award for overall customer satisfaction to rival Royal Bank of Canada.

Mr. Masrani argues what transpired last year was a temporary hiccup. Growth will return, he says, partly thanks to expansion plans that include beefing up TD's credit-card unit. The CEO also wants to build out the bank's insurance business, despite that industry's recent struggles, and to become a prominent commercial bank that lends to small and midsized companies.

Of all his changes, the strategy that stands out is Mr. Masrani's emphasis on capital markets.

This was a division that never got much attention under the old regime, so when he started talking more about it, some people wondered whether TD would expose itself to greater risk.

The short answer: Not on Mr. Masrani's watch. Rather than ramping up derivatives trading, TD aims to become a prominent corporate lender to big companies in the United States and then build products around that. The decision follows RBC's strategy to expand its U.S. corporate-lending book in the wake of the financial crisis, just as global banks were pulling back.

Nothing is risk-free, as TD knows well. The bank had major problems with its loans to telecom companies during the dot-com bubble, an era when it posted its first-ever quarterly loss. But it was Mr. Masrani who was assigned to clean up that portfolio of bad loans. From there, he became chief risk officer. "The bank's risk appetite is non-negotiable," Mr. Masrani explains. "We will not risk the whole enterprise with a strategy or a trade."

"A lot of what we're doing in the U.S. is actually the same as what we've done in Canada over the last 20 years ... We have a fairly large personal and commercial bank in the United States from Maine to Florida that has millions of customers.

A lot of them have what I would call investment-banking types of needs," he said, such as managing interest-rate risk, or vanilla derivatives. "Why would we not build those capabilities ... to recreate what we did in Canada?" To complement the capitalmarkets strategy, he wants to elevate the retail and commer...

cial-bank division's status south of the border, making it more, well, Canadian. "What we are trying to create is more of a universal banking model," he says.

Now is the ideal time to do this, he says. The U.S. arm is now a top-10 bank ranked by assets in the United States, thanks to a decade spent laying the groundwork by building scale, a brand and a culture. The market also has a much more positive tone than it did when he ran the U.S. bank from 2007 to 2013. When Mr. Masrani took over as CEO, U.S. returns were still weak as the economy made a slow recovery from the Great Recession, and TD's return on equity in the U.S. arm was just 8 per cent; in Canada, it was 43 per cent.

Today, there's more oxygen.

After keeping interest rates near zero per cent for nearly seven years, the Federal Reserve hiked them for a second time in 12 months in December, which boosts lending margins. "There is a sentiment change that is very positive," Mr. Masrani says.

To capitalize on that, he teamed up with TD Ameritrade on a proposal to buy discount brokerage Scottrade for $4-billion in October, absorbing Scottrade's U.S. banking assets. At a conference this week, Mr. Masrani also reiterated his desire to acquire a smaller traditional bank in the southeast United States.

There's also the Donald Trump factor. Since he was elected to be the next U.S. president, big American bank stocks have jumped an average of 24 per cent on the assumption that he will loosen regulations. It is debatable how much growth that will spur, but coupled with a plan to lower corporate taxes and boost infrastructure spending, the recovery could amp up as consumers borrow more.

"These three pillars are going to mean more growth," Mr. Masrani says.

For the first time, TD isn't shy to pound its chest about its U.S. arm. A lot of institutions - both Canadian and global - have had expansion plans to the south, where a tantalizingly large market awaits, "but there have not been many instances of success," Mr. Masrani said. "We're very proud."

And the new CEO is confident he has time on his side. "The few banks that are bigger than us had a 150-year head start."

Associated Graphic

CEO Bharat Masrani attends TD's annual meeting in Toronto in March, 2015. Mr. Masrani has redirected the bank's strategy in recent years to great effect.

CHRIS YOUNG/THE CANADIAN PRESS

Surging pay for directors draws criticism
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Companies paying more to attract top talent, but scrutiny of compensation lacking
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By JANET MCFARLAND
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Monday, November 28, 2016 – Print Edition, Page B1


There has never been a more lucrative time to be a corporate director in Canada.

Director compensation has soared over the past five years, outpacing the rate of chief executive officer pay growth. Yet unlike the intense focus on executive pay in recent years, director compensation has drawn almost no scrutiny during the same period.

Median pay for directors at 300 public companies in Canada climbed 30 per cent between 2010 and 2015, according to new data from Korn Ferry Canada and Patrick O'Callaghan and Associates. The rate of increase was highest at mid-sized and smaller companies, where median pay climbed by 98 per cent and 50 per cent, respectively, during the same period, while directors of large companies with over $10billion in assets saw a 24-per-cent raise.

Directors and board experts - even some major shareholders - say pay levels have risen to keep pace with growing workloads as directors face demands for tougher oversight in a growing array of areas.

But critics are starting to question whether the workload for the part-time jobs has grown enough over the five-year period to justify such large pay increases. Some worry board pay is being subjected to the same forces driving CEO compensation higher, including a desire to attract U.S. talent and a ratcheting up effect as companies compare pay with others and raise theirs to keep up.

"Part of the problem is companies are buying credibility through recruiting directors who have a certain pedigree," said Don Gray, chairman of the board of Peyto Exploration & Development Corp., who believes many large companies have raised pay levels too high.

"The problem is that pedigree typically means they are not big shareholders, and they are not terribly interested or capable in standing up to management."

More than 40 per cent of large Canadian companies have adopted a flat-fee pay model for director pay, most of them making the conversion over the past five years. In theory the model has the potential to limit payouts, but in practice many boards have seen pay rise under the system.

Under the flat-fee model, directors are paid a base retainer but are not given additional fees for each meeting they attend, which means pay is capped no matter how many meetings the board holds.

Canadian National Railway Co. introduced a new allinclusive retainer in 2015, paying a base of $235,000 (U.S.) in cash and shares, plus additional fees for sitting on committees. The railway company raised its base board and committee retainers in 2015 "given that they now apply regardless of the number of meetings attended by the directors."

The result is that total pay per director - excluding the board chair - rose 22 per cent in the first year under the new system, to an average of $378,363 (Canadian) a director in 2015 from $311,303 in 2014. CN said much of the increase was due to the falling Canadian dollar because it pays its directors in U.S. dollars, but reports compensation in Canadian dollars. In constant U.S. dollar terms, the company said pay rose 6.5 per cent.

CN corporate secretary Sean Finn said the new retainer was designed by an independent consultant after comparing compensation trends across North America.

"That review took into account our U.S. presence, the need to attract directors with extensive U.S. business experience, and trends in director pay in the U.S. and Canada," he said.

Mr. Finn said the flat-fee model streamlines and improves predictability of compensation while increasing transparency for shareholders.

Royal Bank of Canada introduced a flat-fee model in 2010, initially paying directors base compensation of $185,000 (Canadian) in 2011, then raising it to $210,000 in 2014 and to $250,000 in 2016 for a 35-per-cent increase between 2011 and 2016.

RBC board chair Kathleen Taylor said more than ever, board members have to be fully engaged, and said the flat-fee model simplifies compensation.

She said the model has worked well to reward the responsibilities of each director.

"Over the last decade, the workload, time commitment and expertise required of directors has definitely increased," Ms. Taylor said.

Canadian boards hold an average of nine meetings a year, according to Korn Ferry data, while directors on key audit and compensation committees meet an average of five times a year.

Committee meetings are often held in advance of board meetings so directors do not need to travel twice.

A 2014 survey of 120 corporate directors in Canada found they estimated they work an average of 304 hours a year, with most of the work coming outside of the boardroom in meeting preparation or in attending other functions.

With large Canadian companies paying a median of $180,000 a director in 2016, the pay works out to just under $600 an hour, assuming 304 hours are worked.

The amount is in line with pay for top board advisers such as senior lawyers, argues independent board consultant Patrick O'Callaghan.

"Directors are spending more time for sure, and they are definitely getting paid more, and as far as I'm concerned that's absolutely fair," Mr. O'Callaghan said.

"They're working much harder and I don't think it's out of whack at all."

Some major shareholders, including the Canada Pension Plan Investment Board, have pushed for higher pay levels for directors to professionalize the role.

Former CPPIB chief executive officer Mark Wiseman, who is now an executive at investment giant BlackRock Inc., has strongly advocated for current average pay levels to rise, saying shareholders should expect more from directors and should pay them more as a result.

"We keep saying people shouldn't be overboarded, that we should have people who are on fewer boards, not more boards," he recently told an audience of major investors at a Toronto event.

"Well guess what? We also have to pay them if we want high-quality directors and we want them to be aligned with our interests and we want them to make long-term decisions."

Other investors, however, are watching current trends with concern, warning that excessive pay can make directors fearful of rocking the boat and losing their coveted positions.

The Canadian Coalition for Good Governance, which represents most of Canada's largest institutional investors, has guidelines warning that director pay should not be so high "as to potentially compromise the independence of directors," said executive director Stephen Erlichman.

Mr. Erlichman said directors must be willing to resign on a matter of principle, and that freedom can be jeopardized when pay is too high or when pay programs contain retention provisions, such as share units that only vest if directors remain on the board for at least three years.

"What is reasonable depends on the circumstances," Mr. Erlichman said. "But it shouldn't be so high or structured in some way that it interferes with a director's ability to be independent and forthright and challenge management."

Pay levels have risen most rapidly at mid-sized and smaller firms over the past five years, and compensation consultant Ken Hugessen believes it is because they "are not so much on the radar screen," taking advantage of a lower profile to raise pay without garnering scrutiny from major activist investors.

Directors at "micro" companies (defined as having less than $1.5billion in assets) earned median pay of $110,500 in 2015, while directors of mid-sized companies earned $140,000 and directors at large companies with more than $10-billion in assets earned $180,000, according to Korn Ferry data.

The pay differences are not large considering there is often a major gap in workload, Mr. Hugessen argues.

"Smaller companies can have as few as four or five meetings a year, and there's a lot less work," he said. "It's probably a better deal to be a director on a smaller company than a big one."

Michelle de Cordova, director of corporate engagement and public policy at ethical mutual fund firm NEI Investments, said her firm does not typically invest in or monitor smaller companies, so pay trends at that level can be hard to spot. She believes there should be more discussion about creating say-on-pay votes specifically for director pay, giving shareholders an ability to protest unpopular practices.

The only other option, she said, is for shareholders to vote against board members themselves to protest inappropriate director pay decisions, a move she calls "the nuclear option."

"The issue with director pay is that they're actually paying themselves," she said. "There isn't really anybody beyond the shareholders who have oversight of directors pay."

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Director pay has surged across Canada in recent years without an attendant increase in scrutiny applied to board remuneration.

MARK BLINCH/THE GLOBE AND MAIL

Could Trump lead U.S. to recession?
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By IAN MCGUGAN, RACHELLE YOUNGLAI
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Friday, January 6, 2017 – Print Edition, Page B1


It sounds like the ultimate reality-TV challenge: Give an erratic, bombastic businessman the keys to the world's most powerful economy and see how long it takes him to crash it.

But economists who have studied the likely impact of Donald Trump say the outcome may be different than you expect.

While the orange-coiffed TV star could plunge the United States into recession if he follows through on his protectionist trade rhetoric, he could also preside over robust growth if he chooses to let his wall-building impulses fade into the background.

The surprisingly benign outlook around Trumponomics reflects the U.S. economy's current momentum. Unlike his predecessor, The Donald is taking over a country that is doing far better than its critics - including Mr. Trump himself - want to admit.

Joblessness, which hit 10 per cent during the financial crisis, has slid by more than half. It now hovers around 4.6 per cent - pretty close to full employment, by most estimates.

The economy, which was shrinking at an annual clip of 5.4 per cent when Barack Obama was inaugurated, is now expanding at a 2.9-per-cent pace, according to the Atlanta Federal Reserve Bank's GDPNow model.

"Under current policy, the expansion has a ways to run," Mark Zandi, chief economist of Moody's Analytics, says. "I don't see anything that should derail it in the foreseeable future."

Rather than a world financial crisis, Mr. Trump's biggest opponent is history. Experience shows that recoveries rarely endure as long as the current rally.

"Given the length of the U.S. recovery, the surprise would be if the U.S. did not face a recession during Trump's first four years in power," Douglas Porter, chief economist with Bank of Montreal, says.

"This cycle is already the fourthlongest expansion on record and if we even make it through the spring of next year, it will be second longest on record. If it can be sustained until the middle of 2019, it will be the longest on record."

If history is any guide, Mr. Trump will have to be nimble to avoid a downturn on his watch.

But what are the most likely prospects for this most unlikely of presidents? Here are three key scenarios.

Recession now

The U.S. economy faces a handful of big dangers from Mr. Trump's policies, according to Megan Greene, chief economist at Manulife Asset Management.

One is the possibility that his policies incite geopolitical conflict. Another is the prospect that his free-spending agenda will eventually cause the Federal Reserve to raise rates too fast, tipping the economy into recession.

However, the biggest single danger is more immediate. It's the possibility that Mr. Trump will rush to follow through on his protectionist trade agenda and begin his term by slapping massive tariffs on products made in China and Mexico.

The market is largely ignoring the possibility of a trade-induced downturn, but "I think the odds are underestimated," Ms. Greene says. She says Mr. Trump's recent appointments to key jobs suggest he is more wedded to a bareknuckles trade policy than many people want to believe.

The economic models she uses indicate that U.S. economic growth would drop to zero if Mr. Trump were to stick a 45-per-cent tariff on Chinese goods and a 35per-cent tariff on Mexican products - levies in line with what he vowed during the campaign.

Ms. Greene is not an alarmist.

Despite her concerns, she pegs the odds of a recession during the first two years of a Trump administration at roughly 20 per cent.

However, no one should be shocked if Mr. Trump decides to wage a trade war, she says. And if he follows through on other parts of his platform - such as deporting large numbers of illegal immigrants - the economic impact would be even more severe.

Recession later

A recession later in Mr. Trump's term depends on whether Congress gives him the green light to slash taxes, boost government spending and deregulate.

These measures would initially boost the U.S. economy. But eventually, the stimulus could cause the economy to overheat and trigger the Federal Reserve to raise interest rates at a faster clip to curb inflation.

"If you have deficit finance, tax cuts and spending increases [at] a time when the economy is operating at or beyond full employment, that generates inflation and higher interest rates and that generally leads to recession," Mr. Zandi said.

"Odds are pretty good that at some point in his term, likely toward the end of his term, the economy will struggle and the odds of a recession are pretty high," he said.

The Fed, which recently raised rates for the second time since the Great Recession, has signalled it may pick up the pace if Mr.

Trump follows through on all his plans.

"The committee might need to raise the federal funds rate more quickly than currently anticipated to limit the degree of undershooting and stem a potential buildup of inflationary pressure," according to minutes from the central bank's December meeting.

Good times

The current recovery may be long in the tooth, but recoveries don't die of old age. They usually end when the economy overheats, inflation soars and the central bank pushes interest rates into painful territory to quell the exuberance.

Paul Ashworth, chief U.S. economist at Capital Economics, sees no signs of that happening over the next couple of years.

Inflation remains low, wage growth is modest and "there are no obvious bubbles in asset prices."

The Federal Reserve is likely to hike rates four times this year, he says, but he believes monetary policy will remain loose in real terms because of rapidly rising inflation. At the same time, the Trump administration will be cutting taxes and increasing spending on everything from defence to infrastructure.

The combination of a freespending administration and easy money should support U.S. growth, Mr. Ashworth says. He predicts the economy will expand 2.7 per cent this year and 2.2 per cent in 2018.

"Over the next 12 months to two years, the risk of a recession is fairly low," he says. "It would be very unusual to have a significant downturn at a time when Washington is throwing money at the economy."

Of course, what happens after that is open to conjecture. But Mr. Ashworth notes that recessions typically occur during half of presidential terms, so a downturn late in Mr. Trump's four-year span doesn't necessarily amount to a judgment on Trumponomics.

"It doesn't matter who was elected," he says. "I would have said there was a 50-per-cent chance of a recession over the next four years based purely on historical statistics."

He suggests Canadians who are worried about the prospects for Mr. Trump might want to focus their attention closer to home, where a slowing real estate market is casting clouds over the domestic economy.

"If you ask me which economy is most likely to fall into recession first, the U.S. or Canada, I would put my money on Canada."

Associated Graphic

U.S. president-elect Donald Trump speaks in Orlando on Dec. 16, 2016. Some economists fear Mr. Trump's policies could cause the Federal Reserve to raise rates too fast, tipping the economy into recession.

EVAN VUCCI/AP

How Home Hardware is renovating its business strategy
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CEO Terry Davis is ready to take on U.S. rivals by throwing away convention and trying something new
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By MARINA STRAUSS
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Monday, January 16, 2017 – Print Edition, Page B1


Terry Davis is dipping into a new toolbox to reshape how Home Hardware Stores Ltd. operates in a fast-changing sector.

The chief executive officer of Home Hardware, based in tiny St. Jacobs, Ont., about an 80minute drive from Toronto, is racing to take on intensifying competition from U.S. titans. In the top spot at Home Hardware since 2014, Mr. Davis has quietly overseen a senior-management overhaul, the introduction of new mandatory operating rules for its store owners, such as updating their store design and rolling out e-commerce, and the naming of a spunky ad agency after 40-plus years with its former shop.

His new toolkit is helping him take on deep-pocketed Lowe's Cos., which this year bulked up in Canada by acquiring Quebecbased rival Rona Inc. for $3.2billion, as well as industry leader Home Depot Inc.

Already in the past year or so, Mr. Davis has ditched about 25 of Home Hardware's roughly 1,100 "dealers" (store owners), an unprecedented move for the 52year-old retailer. In the past, the company had threatened to cut off a couple of its store owners who wouldn't comply with headoffice initiatives, such as adding the latest store finishes and signs, but had never followed through until now.

"Yeah, you can say I'm shaking things up because I'm holding dealers accountable to a higher standard," said Mr. Davis, a 46year Home Hardware veteran who turned 65 this month as he starts drawing up the retailer's next five-year plan.

"I'm making sure they comply ... We had to send a very clear signal that we were serious about it."

In an increasingly tough, margin-thin home-improvement retail landscape, Home Hardware, the third-largest in the Canadian sector after U.S. powerhouses Home Depot and Lowe's, is working to streamline its operations and inject more uniformity, discipline and marketing pizzazz into the business. It's counting on its service-friendly and down-toearth small-store culture to draw customers from U.S.-owned rivals.

"Terry is a shakeup guy," said Michael McLarney, president of industry publication Hardlines and managing director of the North American Retail Hardware Association Canada. "He's looking to push Home Hardware into the 21st century ... He doesn't want it to be so quiet any more."

The need for a transformation is evident. Annual sales growth in the $45-billion home-improvement retail industry has slowed to about 3 per cent to 4 per cent from twice that pace more than a decade ago, Mr. McLarney's figures show.

Struggling with debt and rising house prices, many young consumers can't afford to buy homes while baby boomers are downsizing, resulting in fewer purchases at home-improvement merchants, Mr. Davis observes.

Even so, privately held Home Hardware expects its sales of about $6-billion to rise 7 per cent this year, the same as in 2015, partly from luring rival store owners to his chain from Lowe's and independent operators, and partly from adding new outlets and boosting sales at existing stores, Mr. Davis said.

At the same time, Home Depot, with an estimated $7.2-billion of sales here, has been making gains at existing stores while Lowe's now is a more formidable player after having acquired Rona, Mr.

McLarney said. Lowe's executives "are definitely going to give Home Hardware a run for their money if they manage it properly."

Sylvain Prud'homme, CEO of Lowe's Canada, said aside from converting 40 big-box Rona outlets to the Lowe's banner, the retailer is also putting a push on expanding and upgrading its midand small-sized stores.

Lowe's Canada is looking to double the number of its diminutive hardware stores to about 200 in three years, consolidating them under its Ace Hardware banner while updating Rona's mid-size outlets, he said. And Lowe's will aggressively focus on recruiting dealers from rivals, including Home Hardware, he said.

"We are going to put a pretty strong plan together," Mr. Prud'homme said in an interview. "It's a competitive market and it will be for quite a while."

Mr. Davis is borrowing a page from his big competitors' standardization playbook by forcing his store operators to adopt a range of Home Hardware programs, such as store branding efforts, digitized returns claims and e-commerce. By July, the chain plans to offer home delivery of online orders rather than just the current store pick-ups, he said.

"Our competitors coming up from the States have very deep pockets," he said. "These are finely tuned machines that we are fighting against. When we make investments to streamline and become more efficient and try to compete ... we can't afford to have dealers saying, 'I like the old way of doing things.' " In marketing as well, Mr. Davis is making changes. This year, Home Hardware hired as vicepresident of marketing Rick McNabb, a seasoned retail executive who in the past headed restaurant chains Swiss Chalet, Harvey's and Milestones at parent Cara Operations Ltd. and whose family for years has been in the Home Hardware business.

In a bold move this fall, Mr. McNabb replaced Home Hardware's long-time ad agency, run by veteran ad man Morris Saffer, with funkier John St. to help draw a younger, urban and more-diverse shopper with digital and social-media pitches.

Mr. Davis said he'd like Home Hardware's marketing to put even more of a spotlight on the store owners and their personal interests to help customers connect with them - and their stores.

"This is a nosy culture," Mr. Davis said. "People want to know the behind-the-scenes stuff."

The store owners are stocking more appliances and furniture to help benefit from the decline of Sears Canada Inc., but those categories also are becoming more crowded as Lowe's, Home Depot and others carry those products.

In a slow-growth period for the industry, "everybody is going to be out there jumping all over their competitors to steal their business," Mr. Davis said. "Retail is going to just get ever more vicious."

Associated Graphic

Home Hardware CEO Terry Davis is shaking things up for his chain by updating store design and focusing on e-commerce.

GLENN LOWSON/THE GLOBE AND MAIL

Why Saudi Arabia is betting the oil rebound is here to stay
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By ERIC REGULY
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Saturday, January 7, 2017 – Print Edition, Page B1


ROME -- What goes up fast must come down fast. That's the law in the world of commodities. So is oil doomed? Oil has climbed by two-thirds in the past year, suggesting a big, ugly downturn is coming.

Don't count on it.

Your first clue that prices are unlikely to plummet comes from Saudi Arabia, whose experiment in free-market economics is officially dead and buried in the sand. In late 2016, the Saudis decided that the gaping holes in their budget - the combined 2016 and 2015 deficits reached $175billion (U.S.) - were unsustainable. So it persuaded OPEC, where it calls the shots, to trim production - if only slightly.

While the cuts have yet to be fully implemented, or even measured with any accuracy, the OPEC agreement was enough to lift prices by a quarter since the end of November alone. On Friday, Brent crude traded at $57 (U.S.) a barrel; the low, almost exactly a year ago, was $37.

Your second clue comes from the Saudi budget. It's expanding in 2017 after last year's severe contraction, which met with public anger, as all austerity programs do. It seems unlikely the Saudi government would return to big-ticket fiscal policies if it feared an imminent price collapse.

RBC and other banks report that Saudi spending is to rise by 8 per cent this year, to $237-billion, ensuring that a hefty deficit, while smaller than last year's, will remain intact. The shopping list includes 38 new hospitals, two medical cities, several "sports" cities, plus ramped-up outlays on roads, railways, ports and airports.

The biggie is defence spending, which is the costliest item in the Saudi budget and has every chance of rising relentlessly as the government develops a fondness for foreign wars. Saudi Arabia, as RBC noted, overtook Russia in 2015 to become the world's third-largest spender on defence, after the United States and China. Before the Arab Spring, it was the eighth-largest.

The question is whether the oilprice rise - oil revenue is expected to rise by almost 50 per cent this year - is a blessing or a curse for the Saudis and their exceedingly ambitious new plan, known as Vision 2030, to overhaul the economy and end its overwhelming dependence on oil. Saudi Arabia is a one-product wonder.

When oil goes into the toilet, so does the economy - the price of a shocking lack of diversity.

We all know that free or cheap money can wreck economic-reform plans. It happened in Alberta, which also turned itself into a one-product, low-value-added wonder during the era of strong oil prices, which ended in 2014. It's happening now in the euro zone, where the European Central Bank's moneyprinting juggernaut, in the form of 80-billion a month in quantitative easing, has propped up the finances of national governments, removing almost all incentive to make their economies more competitive - or competitive at all. Why bother when the ECB will finance your sinning ways? Thanks to the ECB's generosity, the euro zone has let a good crisis go to waste.

Vision 2030 is under the stewardship of deputy crown prince Mohammed bin Salman Al Saud, who is also Defence Minister and chairman of the Council of Economic Development Affairs.

After King Salman bin Abdulaziz Al Saud, he is the most powerful man in the land.

The young prince - he is 31 - faces a formidable task over the next 13 years. The essential goal is to greatly expand the non-oil sector of the economy, which today is negligible. About 90 per cent of the economy is linked in some way to oil and chemical production and exports, and the easy money has financed a welfare state of mind-boggling proportions. About two-thirds of Saudis work in the public sector.

The plan, through reform and education, would create an entrepreneurial class, financed partly by a $2-trillion sovereign wealth fund. Some state companies would be privatized or partly privatized, including Saudi Aramco, the world's biggest oil company, whose potential market value would be three or four times that of Apple (the Aramco initial public offering, perhaps 5 per cent of the company, should happen in 2018 and will be the market event of the year).

The diversification and reform mission is crucial. In 2015, when oil prices were plunging, the International Monetary Fund said that burgeoning Saudi deficits, should they persist, could trigger outright economic collapse by 2020.

Prince Salman's job is all the more difficult because he has to keep Saudi civil society from falling apart while he turns the economy on its ear. In the wake of the Arab Spring, the government, afraid that the revolution would roll into Saudi Arabia, unleashed some $130-billion in social spending. The drug seemed to work.

The point being, the economic reform agenda, if taken seriously, is going to upset millions of Saudis. If the government resorts to its usual formula to buy peace - massive spending - it will require high oil prices. But high oil prices will reduce the incentive for reform. Prince Salman may have the world's toughest economic assignment, one that might extend well beyond 2030. But oil investors probably can bet that his effort will prevent another oil collapse any time soon.

Associated Graphic

A gas flame blazes at the top of a tower near the Khurais oil field, about 160 kilometres from Riyadh. Saudia Arabia is seeking to diversify its economy to become less reliant on oil.

ALI JAREKJI/REUTERS

BRACING FOR TRUMP
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Banks hope for boost from 'pro-growth' policy shift
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By JAMES BRADSHAW
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Wednesday, January 11, 2017 – Print Edition, Page B1


Chief executives at Canada's largest banks are voicing cautious optimism about their prospects for growth in the U.S. under a Donald Trump presidency, but are waiting for clearer signals from the incoming administration.

Promises of deregulation, largescale infrastructure spending and rising interest rates have driven a sharp run-up in bank stocks, and Canadian bank executives have eagerly anticipated a friendlier U.S. environment.

The uncertainty dogging Mr. Trump's transition to power comes at a moment when some of Canada's largest banks, including Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal and Canadian Imperial Bank of Commerce, are eager to grow south of the border. As Canadian operations face headwinds from a sluggish domestic economy, executives are eyeing a more favourable U.S. business climate as a catalyst for growth. Yet with few specifics to latch on to and inauguration day approaching, expressions of hope come with disclaimers about the wisdom of taking a wait-and-see approach to the president-elect's sometimes vague plans.

"We do anticipate pro-growth policy coming out of the new administration - the impact unknown, obviously. We're all trying to quantify that," RBC CEO Dave McKay said Tuesday at his bank's annual conference hosting fellow CEOs, held in Toronto.

"But that would be a boost, it would potentially lead to higher rates, which is very good for our franchise in the United States."

A December hike in U.S. interest rates was an early positive sign. If rates climb by 100 basis points, or one percentage point, CIBC would reap more than $100-million in net interest income. And a rise of just 25 basis points is worth $50-million in net income to RBC's U.S. wealth management franchise alone.

The president-elect's transition team has also pledged to "dismantle the Dodd-Frank Act" and replace it with new policies encouraging "economic growth and job creation," providing few specifics, even as some leading figures in U.S. banking urged the new administration to stop short of scrapping the rules entirely.

Perhaps no one has felt the rapid change in sentiment more acutely than CIBC, which announced a $4.9-billion deal to buy Chicago-based PrivateBancorp Inc. last July, only to have a shareholder vote on the deal postponed in December after regional bank share prices soared after the U.S. election.

On Tuesday, CEO Victor Dodig said "aberrations" in the market forced CIBC to take "a pause" and wait for markets to settle.

"What's happened with the new incoming administration is they've telegraphed certain policies. What actually gets implemented and how it'll look and what kind of economic benefit that will deliver is yet to be seen," he said. "I think that there's some inconsistencies in terms of some of the messaging."

Widespread uncertainty around trade rules threatens to dampen the prevailing optimism. Mr. Trump's threats to tear up the North American freetrade agreement and slap punitive tariffs on China and Mexico have spurred fears that a fullblown trade war could erupt.

"Obviously you build that into your risk strategy, into your thought process in the short term," Mr. McKay said. In late 2015, RBC completed its $5-billion (U.S.) acquisition of Los Angeles-based City National Corp., and is looking at geographic expansion in California and New York, Mr. McKay said.

But Mr. McKay expects to be "more cautious" about growing its commercial loan portfolio for now.

Bank of Nova Scotia is also watching trade developments closely given its large footprint in Mexico - one of Mr. Trump's favourite rhetorical targets.

"They're adapting to the rhetoric out of Washington, and we'll see what happens in terms of some revised negotiation on NAFTA, or whatever happens," CEO Brian Porter said. "But, look, the long-term economic prospects of Mexico remain intact."

TD, which recently tempered its outlook for overall profit growth, owns 40 per cent of TD Ameritrade Holding Corp., and the two institutions joined forces last fall to acquire discount brokerage Scottrade Financial Services Inc. for $4-billion. Bharat Masrani, the bank's CEO, would like TD to grow faster in the southeast United States, and raised the prospect of buying "a smallish type of bank" in the region.

Now, apparent "tailwinds" in the U.S. market offer TD's best hope to boost earnings faster. "If things do sustain themselves, then we have a fighting chance of hitting [a 7- to 10-per-cent] medium-term growth target," Mr. Masrani said.

At BMO - which has more than 600 U.S. bank branches under its BMO Harris Bank brand, mostly in Midwest cities such as Chicago and Milwaukee - CEO Bill Downe expects an uptick in U.S. business from the back half of 2016 will continue in the new year, as policy shifts to emphasize fiscal stimulus.

"Clearly, the new administration is creating an environment in which our clients are much more comfortable in talking about capital investment, about expanding their businesses," Mr. Downe said. "There's a lot of political noise, but underneath it I think there's some pretty clear thinking going on."

To the tune of 300%: streaming's big shiny year
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By JOSH O'KANE
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Tuesday, January 10, 2017 – Print Edition, Page B1


Canadians dove deeper into streaming music in 2016, signalling a growing public eagerness to pay for songs through services such as Spotify and Apple Music after two decades of the music industry's digital trialand-error.

In Canada, streams on subscription services last year rose 309 per cent from 2015, according to analytics firm BuzzAngle Music. In its first-ever Canadian annual report, to be released this week, BuzzAngle - which uses data from sales and streams across an ever-growing number of music platforms to paint a holistic picture of listening habits - found that Canadians streamed tracks 36 billion times on demand last year.

That's up 84 per cent over 2015, across audio services such as Spotify and Apple Music and video services such as YouTube.

The report offers an up-to-date Canadian view of the trend that listeners are abandoning download services such as iTunes to get music and embracing streaming services full-tilt.

According to BuzzAngle, Canadians streamed more songs on an average day - 98 million - than they downloaded from licensed services through the entirety of 2016, which totalled only 75 million.

Broken down by album-unit streams, BuzzAngle found Canadians consumed 8.5 per cent more music in 2016 than 2015. In the United States, it found overall consumption up more than 4 per cent there. "We can safely say this is solid growth," said Jim Lidestri, chief executive of Border City Media, which runs BuzzAngle and first launched in 2013.

As people flood into paid subscription services, he believes streaming might soon offset declines from dwindling sales.

"That's good news for the profitability and for the health of the business," he said in a phone interview.

The music industry's many stakeholders have spent the past few years adjusting to this trend, for better or for worse. Warner Music Group Corp., for instance, announced last year that streaming had officially become its main source of revenue.

The International Federation of the Phonographic Industry, a major-label lobby group, revealed last April that in 2015, streaming helped propel the first significant year-over-year revenue growth in recorded music in nearly two decades.

But the rapid growth in streaming does not mean the industry has recovered from its post-Napster-era losses. The IFPI said recorded music was a $15billion (U.S.) industry in 2015, less than half its value in 2000; even while celebrating their revenue growth, they used the opportunity to chastise services such as YouTube to more proactively license music content.

Toronto-bred global superstar Drake was BuzzAngle's "artist of the year," with more than 656,000 "album consumption units" in 2016, the year that his fourth studio album Views and singles including One Dance were inescapable.

Music measurement is not a perfect science. BuzzAngle defines 150 streams as the equivalent of one song download, and 1,500 an album-sale equivalent - a rough, oft-debated industrystandard conversion of streaming apples to purchased oranges.

Drake's Views, for instance, has 20 tracks, mucking up the math.

"I believe there'll be more granularity in the formula in the future," Mr. Lidestri said.

Last year, BuzzAngle found combined digital and physical album sales fell 18 per cent yearover-year to 21 million. For the first time, its report says, digitalalbum sales fell faster - down 25 per cent - than physical sales, down 13 per cent.

Vinyl remained a physicalmedia growth story, with sales up 58 per cent against a drop of 15 per cent for CDs. Still, vinyl's rebirth remains a niche. It only accounted for 5 per cent of all physical sales tracked by BuzzAngle, with more than twothirds of its sales driven by rock and its sub-genres such as metal and alternative.

BuzzAngle is relatively new to Canada, but its data are gradually gaining fans among the country's music establishments.

Last September, it partnered with the Canadian Independent Music Association to launch an independent music sales and streaming chart here. And Exclaim Magazine, Canada's largest music and pop-culture magazine, recently turned to BuzzAngle to build its own charts.

Nielsen is also expected to publish a 2016 report soon. Its Soundscan system has long been music's standard-bearer for consumption measurement, but Mr. Lidestri wanted to collect more, and more granular data. Soundscan is "a good reporting tool for charts," he says, but he wanted to sell a product to help artists and their record companies make business decisions such as routing tours specifically where their music is popular.

Subscription streaming services such as Spotify, Tidal and Apple Music are becoming the go-to destination for music fans. They hit 100 million paying subscribers in December, according to digital music and media analyst Mark Mulligan. BuzzAngle, meanwhile, reported that these kinds of services accounted for 72 per cent of all audio streams in 2016.

Despite this demand, monetizing these subscription services has been a struggle - while large companies such as Apple can afford to take the loss, independent players such as Spotify and Tidal have struggled to profit from the $10-a-month business model.

Kinder Morgan deal with B.C. sets payment precedent
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By KELLY CRYDERMAN
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Friday, January 13, 2017 – Print Edition, Page B1


CALGARY -- An agreement worth as much as $1-billion between British Columbia and Kinder Morgan Inc. removes a key hurdle for the company's plans to triple capacity on its Trans Mountain pipeline, and brings Alberta oil sands producers a step closer to accessing new global markets.

But the ad hoc deal announced by B.C. Premier Christy Clark this week also opens the door to payments being made to other provinces to win their support for controversial infrastructure projects, including TransCanada Corp.'s proposed Energy East and Keystone XL pipelines.

"It does set a precedent," said Werner Antweiler, an economics professor with the Sauder School of Business at the University of British Columbia. "We have not seen a situation in the past where a company actually pays a government for crossing through their territory to deliver goods to market."

Ms. Clark began her bold political gamble in 2012, when her government laid out five conditions regarding environmental, indigenous and economic concerns that needed to be addressed before B.C. gave its blessing to new heavy oil-pipeline projects. On Wednesday, she announced that all five conditions had been met for the Trans Mountain expansion, with the crowning achievement for her government being a deal with Kinder Morgan that will see her province paid $25-million to $50million a year - depending on how full the pipeline is - for the next 20 years.

Her government says the money will be dedicated to a new B.C.

Clean Communities Program that will fund small, local projects such as cleaning up beaches, creating recycling programs or establishing new parks. Kinder Morgan has also committed to a "British Columbians first" policy for hiring and contracting for pipeline-expansion work.

But the deal comes despite the fact the province has no formal claim to a direct payment from the pipeline firm. Municipalities along the pipeline route were already expecting higher property taxes, and the province as a whole was set to see more construction and energy-sector activity. If the project goes ahead, Kinder Morgan said agreements will give 41 B.C. indigenous communities more than $350-million.

Prof. Antweiler said he sees a number of problematic questions arise from the deal. Why exactly is B.C. getting these payments?

Will the rate rise in future if another project is more controversial?

"Is it political acquiescence we're paying for?" Ms. Clark is not the only politician with dollar-specific terms for new pipelines crossing her lands.

U.S. president-elect Donald Trump has said he supports TransCanada's $8-billion (U.S.) push to ship more oil to key U.S. markets through the yet-to-be built Keystone XL pipeline. However, he has said he will back the project only if the Calgary-based company is willing to share its profit.

And in 2014, Quebec laid out seven conditions that TransCanada must meet before the government supports the $15.7-billion Energy East project. Besides environmental, First Nation and social considerations, Quebec said the project must also give the province a clear economic boost.

"In an ideal world, I would not like to have payments," said Pierre-Olivier Pineau, chair of energy-sector management at the business school HEC Montréal.

"But given the kind of controversy that these kind of projects are creating, it's a good thing. ...It makes the project more acceptable for some people."

Prof. Pineau said there's no question that the provinces Energy East would cross - Quebec, as well as Saskatchewan, Manitoba, Ontario and New Brunswick - will be paying close attention to the B.C. deal.

Still, he noted that Quebec opposition to the cross-Canada project is strong and it remains unclear whether Energy East is still viable in an era of lower crude prices and demand.

There are few other details available on the deal that Kinder Morgan has struck with the B.C. government. But University of Calgary economist Trevor Tombe said a key question is whether the pipeline firm is able to pass the cost of the deal onto shippers - primarily oil sands producers.

Prof. Tombe said the payments are akin to B.C. placing an extra tax on the pipeline for crossing a provincial boundary and adds to what are already hefty interprovincial-trade barriers.

Given the political and environmental opposition to new oil pipelines, he said, this deal might be an exception. "But it could lead to substantial problems if provinces start doing this on other types of shipments - including rail and trucking."

Kinder Morgan said this week that its board still needs to make a final investment decision on the Trans Mountain expansion project but announced that construction is scheduled to begin this fall.

Associated Graphic

The Westeridge loading dock, centre, for Kinder Morgan's Trans Mountain expansion project is seen in Burnaby, B.C., in November, 2015.

JONATHAN HAYWARD/THE CANADIAN PRESS

Drug stocks slide as Trump targets pharma
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By CAROLINE HUMER, RODRIGO CAMPOS
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Reuters
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Thursday, January 12, 2017 – Print Edition, Page B1


NEW YORK -- U.S. president-elect Donald Trump on Wednesday said pharmaceutical companies are "getting away with murder" in what they charge the government for medicines, and promised that would change, sending drugs stocks tumbling.

The benchmark S&P 500 index slipped into negative territory after his remarks at a news conference spooked investors.

The Nasdaq Biotech Index lost 3 per cent, the biggest decline since Oct. 11.

"When the president-elect says we're going to negotiate drug pricing, you have to take that seriously, but at the same this is a complicated issue because there's not going to be clarity on drug-pricing reform any time soon," said Brad Loncar, manager of the Loncar Cancer Immunotherapy ETF.

"When somebody that high profile says something that negative, people do not want to invest in it."

Mr. Trump has blasted other industries for charging the government too much, particularly defence companies, but has made only a few public statements about drug pricing since being elected.

He briefly mentioned Lockheed Martin Corp. and Ford Motor Co. and United Technologies Corp. during the Wednesday news conference and promised a border tax for companies producing products for U.S. consumers outside the United States.

After his promise to bring down drug spending, the ARCA pharmaceutical index fell 2 per cent as Pfizer Inc. gave up 2.6 per cent and Johnson & Johnson fell 1 per cent. Gilead Sciences Inc. fell 2.3 per cent.

The drug industry has been on edge for two years about the potential for more government pressure on pricing after sharp increases in the costs of some lifesaving drugs drew scrutiny in the media and among lawmakers.

The government is investigating Medicaid and Medicare overspending on Mylan NV's allergy treatment EpiPen, for instance.

David Katz, chief investment officer at Matrix Asset Advisors in New York, said negative comments on drug pricing trigger selling both from algorithms and investors who suffered from share drops when Democrat Hillary Clinton campaigned against health-care cost increases.

Options traders' expectation for near-term volatility in shares of the Health Care Select Sector SPDR Fund jumped to a onemonth high.

Trading volume in the healthcare fund's options jumped to 52,000 contracts, more than twice the average daily volume, with bearish/defensive bets dominating, according to options analytics firm Trade Alert data.

Mr. Trump's campaign platform included allowing the Medicare health-care program to negotiate with pharmaceutical companies, which the law currently prohibits.

He has also discussed making it easier to import drugs at cheaper prices. "We are going to start bidding. We are going to save billions of dollars over time," Mr. Trump said.

Medicare, which covers more than 55 million elderly or disabled Americans, spent $325-billion (U.S.) on medicines in 2015.

Industry trade group Pharmaceutical Research and Manufacturers of America, or PhRMA, president Stephen Ubl said "Medicines are purchased in a competitive marketplace where large, sophisticated purchasers aggressively negotiate lower prices."

He said the industry is "committed to working with presidentelect Trump and Congress to improve American competitiveness and protect American jobs."

Daniel O'Day, chief executive officer of Roche Pharmaceuticals, a division of Roche Holding AG, said in an interview on the sidelines of the JP Morgan conference that the company focuses on innovation and investing in research. Price increases over the past several years have been "responsible" and in the range of low- to mid-single digits, he said.

Mylan CEO Heather Bresch said it was premature to respond to Mr. Trump's comments, when she was asked during an investor presentation at the JPMorgan Healthcare conference in San Francisco.

She said the industry should take another look at how health care is set up as the government repeals the Affordable Care Act.

Mr. Trump said he plans to repeal the Affordable Care Act, or Obamacare, and replace it at about the same time. The news helped shares of hospitals, which are nervous about losing government payments for medical services. It hurt some health insurers,

like Anthem Inc., which sell plans on the government-run health insurance exchanges.

Healthcare ETFs including the Health Care Select Sector SPDR Fund and the iShares Nasdaq Biotechnology ETF drew their highest trading volume since Nov. 10, after the election.

The health-care sector was the largest drag on the S&P 500 and the Nasdaq 100 while all major U.S. stock indexes were lower in mid-afternoon trading on Wall Street.

Pfizer (PFE)

Close: $32.83 (U.S.), down 61¢

Johnson & Johnson (JNJ)

Close: $114.73 (U.S.), down $1.43

Gilead Sciences (GILD)

Close: $73.77 (U.S.), down $1.24

Associated Graphic

THE GLOBE AND MAIL, SOURCE: BLOOMBERG

Decoding Obama's West Wing, from Chicago's South Side
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By ADAM RADWANSKI
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Saturday, January 7, 2017 – Print Edition, Page F2


The first time he laid eyes on Barack Obama, Alvin Love thought he was an addict coming to ask for a handout.

As a young pastor in a rough corner of Chicago's South Side, back in 1985, Rev. Love had already grown accustomed to a steady parade of such visitors. "So when I saw this guy come by with his sleeves rolled up, all gangly," he recalled recently, pointing out the same window of the Lilydale Baptist Church where he saw Mr. Obama approaching, "I thought, 'Oh no, here comes another one.' "

Only, once he opened his door, and his guest started talking - delivering a spiel about his funny name and non-local accent - did Rev. Love realize he was looking at his neighbourhood's new community organizer.

From that point on, as they became friends working together in common cause, Rev. Love formed more accurate impressions of the man who would serve as his country's 44th president - as did others who worked alongside Mr. Obama back then.

This past fall, as Americans prepared to vote for President Obama's successor, I tracked down some of the people who knew him in his formative years in Chicago, to ask what they made of his presidency and how it squared with their observations of him after he had arrived in their city fresh from a graduate degree at Columbia.

What emerged was a picture of Barack Obama that serves as a useful lens for making sense of his time in office - its successes, its shortcomings, and perhaps even the peculiar way it is ending, with an ostensibly popular president about to be replaced by his polar opposite.

No, Mr. Obama is not exactly the same man he was back then. In the near quarter-century between his appearance on that church's doorstep and his move into the White House, he broadened his intellectual horizons with a law degree at Harvard; learned the political ropes during six years in Illinois's state senate and a brief stint in the U.S. one; became a family man.

But in those early years on the South Side, Mr. Obama both developed and displayed a view of public life that helps explain why his presidency has been so different - more rational and pragmatic, less ideological and romantic - than many people had expected at its outset.

In 2008, when voters were projecting whatever they wanted onto a candidate with little national track record, Mr. Obama's background in community organizing was used to fill in ideological blanks. To supporters on the left, his fight for social causes in impoverished, overwhelmingly African-American neighbourhoods fit into a narrative of civil-rights activism and spoke to a deep passion about issues they cared about. To a suspicious right, modern community organizing's roots with the rabble-rousing Saul Alinsky - author of Rules for Radicals, which promised to teach "Have-nots" how to seize power from those who hold it - proved that Mr. Obama was a dangerous socialist.

If he had actually wanted to be an ideological warrior, the circumstances over the past eight years - a Great Recession fuelling public anger at financial elites; mounting political polarization coupled with shifting demographics that favour his Democrats - could hardly have been more ideal. From a certain perspective, maybe an ideological warrior is what his country needed. Had he run a little more hot - channelled Americans' anger rather than seeking to calm them - perhaps Donald Trump would not be about to assume the presidency.

But that was never who Mr. Obama was.

"He wasn't ideological," said Jerry Kellman, the veteran activist who recruited Mr. Obama to Chicago in order to run the Developing Communities Project, and who mentored him, "and he still isn't."

As an organizer, Mr. Obama did not push big, predetermined ideas. His job was to help achieve incremental change by learning about local residents' practical needs - job training, say, or environmental cleanup around a specific housing development - and help them make their case to people in positions of power.

While often describing him as "progressive," those who worked alongside Mr. Obama say that he wasn't overly emotional, anti-establishment, or inclined toward confrontation - putting him at odds with those more dogmatic about Alinskyism, which is very much about making life uncomfortable for elites.

What he was: a cool-headed realist, mindful that the perfect can be the enemy of the good and that trying to fix all the world's problems is a fool's errand; but optimistic about his ability to bring all sides together to behave like rational adults and achieve mutually beneficial consensus, even if that consensus fell short of their respective ideals.

Generally patient, he could also display something else that would echo later: annoyance with those who, in his view, didn't see things as rationally as he did. Johnnie Owens, whom Mr. Obama trained as his replacement after the two became friends working alongside each other, recalled Mr. Obama's expressing dislike for more grievance-based African-American leaders such as Jesse Jackson, a Chicago icon. And even as he tried to build relationships with local politicians, he was privately disdainful of their transactional self-interest.

Maybe Mr. Obama decided during his time as an organizer, which inevitably involved a few victories and many frustrations, that if he couldn't beat those politicians, he would join them. Or maybe, as Mr. Owens and others suspect, he was eyeing an entry into politics all along.

Either way, there was no mystery within his circle about his long-term plans when, after three years of organizing, he decamped for Harvard; his message, upon announcing his departure, was that he would be able to do more good on the other side of the table, with the politicians.

But neither was he animated by a particular policy mission; he seems to have believed he would bend the universe's moral arc toward justice - as he would later quote Martin Luther King Jr. - by tackling issues as they arose.

As his time in the White House reaches its end, it's obvious that in many ways, Mr. Obama exceeded the grandest expectations, from back then, of how he might employ his problem-solving skills. As President, he inherited an economy on the brink of collapse, and calmly navigated it to solid ground. He improved his country's image around much of the globe, lifting it from an alltime low. Convinced that health-care reform was the single biggest way to shrink inequality, he achieved reforms that dramatically reduced the number of uninsured Americans. He launched the first serious U.S. effort to tackle climate change. He did all that, and much else, while maintaining an even keel and an integrity that is already prompting nostalgia (and the highest approval ratings since his earliest days in office).

At the same time, it is impossible to ignore what the election of Mr. Trump says about his record, or at least what a large segment of his country thinks about it. The economic recovery has not been balanced; millions of Americans feel cast aside. The neighbourhoods where Mr. Obama once organized are going through some of their toughest - and most violent - times in decades. The world hardly seems a safer place than it was eight years ago, recent horrors in Syria serving as a stark reminder of how his caution and reserve sometimes come off as indifference. And for all his potential to bring people together, the 2016 election showcased a country as divided as ever - along partisan, racial and socioeconomic lines - and deeply pessimistic about its general direction.

Maybe none of this - the legacy of a conspicuously rational president in times that seem to border on the irrational - should be surprising. Especially not when you consider that the signs were all there for how Mr. Obama would address the biggest challenges of his era.

As the economy teetered, a cool aversion to class warfare

"He was so even-tempered," said Loretta Augustine-Herron, a teacher whom Mr. Obama trained as a volunteer back in his organizing days, and who in turn became something of a mother figure to him at the time. "I would be like 'Zing! Boom!' and he would take that second breath and start over."

Sitting in her living room in Calumet City, a predominantly African-American suburb not far from the South Side area where she then lived and pounded the pavement, she spoke with admiration of how Mr. Obama kept his emotions in check, no matter how unfair the world seemed. Others, like Jerry Kellman and Johnnie Owens, suggested that that calm went hand-in-hand with an aversion to class warfare, even when established power structures offered the most cause for frustration.

To hear their accounts was to better understand the economic-recovery strategy that, more than anything else, would define Mr. Obama's presidency - a response to the spectacular and infuriating mess he inherited in 2009, when a lot of Americans wanted blood.

If he had more populism in him, that metaphorical blood might have flowed: The worst financial meltdown since the Great Depression came with easily identifiable villains - bankers from whom he could have claimed many pounds of flesh for the subprime crisis.

If he were more ideological, he would have done everything he could to score victories for the left - dramatically curtailing capitalism's excesses, or massively expanding government - at a time when such victories might have felt earned.

Instead, he did what he had always done - living up to Mr. Owens's description of him as someone who, more than anyone else he had ever encountered, was adept at maintaining a public face. Privately, by Mr. Obama's own subsequent account, he was appalled and infuriated by daily briefings that showed the consequences of Wall Street's excesses. But he wasn't about to let such feelings get in the way of how he conducted himself as President.

Showing a long-standing preference for trying to get the best out of people on the inside, rather than aggressively challenging them as a relative outsider, he surrounded himself with officials who arguably bore some responsibility for the economic mess - most notably Tim Geithner, the Wall Street-friendly former regulator he chose as treasury secretary; and Larry Summers, named director of Mr. Obama's National Economic Council, even though he had had a strong hand in Bill Clinton's financial deregulation.

Among the swiftest decisions Mr. Obama made, despite knowing it would cause white-hot anger among people who felt they were being left to fend for themselves as they lost homes or savings, was to bail out banks. It was something he "hated" doing, he later conceded, but believed was more responsible than letting those banks collapse under the weight of their own mistakes.

While shepherding in new rules that curbed risktaking and that improved consumer protection, he declined to make the banks pay with the scale of regulatory reform for which there was widespread demand.

To Mr. Kellman, it was consistent with an imperative that Mr. Obama had learned and embraced when he trained as an organizer: When "working with folks who have the decks stacked against them" - in this case, arguably, much of the population that had just elected him - the objective is to "accomplish something specific that has an immediate impact," even if it requires compromise. Economic stability trumped deeper Wall Street reform, as a matter of short-term practicality.

Partly in hope of appeasing Republicans (and conservative Democrats, who held the balance of power in Congress), and because he was trying to reserve political capital for health-care reform, he settled for a stimulus package of about $800billion - less than half what his more-left-ofcentre advisers advocated. And toward the end of his first term, as many in his party clamoured for another round of stimulus to speed up the recovery, he embraced deficit reduction, in another attempt at consensus with Republicans, who by then controlled the House.

Even though he appeared then to succeed in pleasing almost no one, Mr. Obama's economic strategy - which also included such then-controversial moves as bailing out auto companies - looks much better in retrospect. The recovery was slow, but much stronger than what's been managed by other nations (including much of Europe) that suffered similar consequences from the financial crisis. Mr. Obama can boast of presiding over the longest-ever U.S. streak of consecutive months with job growth. Census data suggests acceleration in the growth of household income toward the end of his tenure. The deficit, meanwhile, went from nearly half the federal budget in 2009 to 12.5 per cent of it. Consumer confidence, as he leaves office, is soaring.

There is data, too, to back up his pursuit of Obamacare at the expense of other potential initiatives (notwithstanding the fact that Republicans are already working to repeal it). Despite continuing middle-class anger about rising premiums, the Affordable Care Act made for about 20 million fewer uninsured Americans - which, among other benefits, dramatically reduced their risk of personal financial crisis.

But among the dangers for any president living that job's isolated existence, and especially an individual who embarks on that journey as a rationalist, is the temptation to view people as numbers. That's especially the case if those numbers are broadly positive, because they can cloak harsh realities on the ground.

The recovery may have been steady, month-tomonth and year-to-year, but it was not consistent either demographically or geographically. Welleducated people heavily concentrated in large cities have prospered; large swaths of the heartland, where traditional manufacturing jobs are not coming back, feel left behind. So, too, do many Americans living in inner-city communities like the South Chicago ones in which Mr. Obama once toiled.

The President's defenders note that the income-inequality gap would have grown faster if not for measures he has taken - including, in addition to Obamacare, an extension of tax cuts for most Americans, coupled with hikes for those in the top bracket.

But there will always be room to wonder what might have been had he been a little less pragmatic. Maybe, tougher financial reforms would have caused more benefits to flow downward.

Maybe, a more robust stimulus package could have invested further in such things as skills training, to give people on the margins a better shot at being closer to the new economy's heart.

And maybe it would have helped the mood had Mr. Obama communicated during the crisis and its aftermath with more urgency and empathy.

Dating back to his organizer days, he had some expectation that others would detach emotion from reason the way he can. When campaigning for re-election in 2012, he at times seemed to expect any thinking person to coolly recognize how much worse things would have been if not for his policies, and to share his confidence in the slow but steady march of progress, no matter what they were seeing firsthand.

That wasn't enough to cost him a second term.

But it may help explain a common perception, in troubled corners of the Rust Belt that turned their backs on Hillary Clinton in 2016, that the Democrats were indifferent to their struggles.

And it may also explain why he was among the many world leaders caught off-guard by a public backlash against globalization, making a limited effort to ensure that Americans were sold on trade liberalization when his administration was negotiating the Trans-Pacific Partnership late in his second mandate. To Mr. Obama, the world was marching toward an ever-more global economy whether all Americans liked it or not. So, true to form, when he did make the public case for the trade deal that would have been one of his last legacy pieces, it was with a realist's argument that the TPP included practical measures - such as labour and environmental protections - that would better serve the U.S. than would trying to fight the inevitable.

Now, the TPP is dead in the water. And Americans have a president-elect who tells them he can make the world bend to his will, and who encourages supporters to rail against outside forces. Zing, boom.

A commitment to global engagement, but not at the price of entanglement

"Often, there are no good choices," Jerry Kellman said, when asked how the President's approach to global security lined up with his organizational philosophy. "Only ones that are relatively better."

The man who had once mentored the future president seemed to be drawing somewhat from one of Saul Alinsky's best-known rules for wouldbe radicals: "As an organizer I start from where the world is, as it is, not as I would like it to be."

For those who had romantic expectations of Mr. Obama as a global healer, which he did little to discourage on a grandiose international tour during the campaign that first brought him to power, it must be jarring that such realism more accurately came to reflect the way he subsequently governed.

Behind the scenes, Mr. Obama had his own, even more blunt way of describing his approach to foreign policy: "Don't do stupid shit."

No less than Ms. Clinton has implied that such a mantra indicates too little serious thought about America's place in the world. "Great nations need organizing principles," she said in 2014, "and 'Don't do stupid stuff' is not an organizing principle."

In fact, it very much did prove an organizing principle - albeit one entailing a sort of hyperpragmatism that, because it involved all but turning a blind eye to horrors like those that unfolded in Syria this past fall, produced probably the biggest stains on Mr. Obama's record.

He was not an isolationist president, of the sort his successor has intermittently threatened to be.

On the contrary, at the diplomatic level, he favoured engagement whenever possible. The old community-organizer mentality very much had an echo in his inclination to extend a hand to people or entities that others would prefer to confront or avoid - literally (if symbolically) in his willingness to exchange pleasantries publicly with the likes of Venezuela's Hugo Chavez; much more consequentially in his controversial nuclear agreement with Iran and in the opening of relations with Cuba. On some of the biggest challenges facing the planet, such as climate change, he clearly believed the U.S. could lead.

But his foreign policy will largely be defined by his use of force, or lack thereof - especially in the Middle East and in South and Central Asia, where he inherited a pair of mismanaged wars and was confronted with escalating turmoil that carried security risks terrifying to many in his own country.

At a time when the excesses of the George W. Bush era had bequeathed lingering international bad will and domestic fatigue toward American interventionism, Mr. Obama was first and foremost wary of actions that could make incipient or ongoing problems worse. And when he did opt to engage, his search for the least-bad ("relatively better," per Mr. Kellman) choices usually led him to decisions that limited U.S. entanglement.

Sometimes, that required a steely willingness to take non-American lives, which complicated any humanitarian points he might get for ending the rendition and torture practices that existed under his predecessor. Under Mr. Obama's watch, the U.S. dramatically ramped up its reliance on counterterrorism drone strikes to take out human targets, most heavily in Pakistan; watchdog groups have put the civilian count from such strikes, each of which he is said to have personally approved, in at least the high hundreds.

Other times, it meant a willingness to engage in only a bare minimum of military engagement.

When he sent American troops into Libya as part of an international coalition, convinced by more hawkish members of his administration - Ms. Clinton among them - that it was better than letting that country descend into civil war, he displayed little interest in nation-building. (Mr. Obama has since called the lack of planning for the day after Moammar Gadhafi was overthrown his "worst mistake.") And in at least one disastrous case, it meant refusing to intervene in any meaningful way at all, even as a Syrian uprising to which he had lent rhetorical support during the 2011 Arab Spring culminated in the massacre of hundreds of thousands of people.

In Syria, there truly were no good choices. Given President Bashar Assad's Russian and Iranian backing, and the uncertainty of what might replace him, the uprising there had the makings, from the outset, of a quagmire. When Mr. Obama infamously backed away from his threat of military action if Mr. Assad crossed a "red line" by using chemical weapons - a climb-down facilitated by Russian intervention with Mr. Assad, which strengthened Vladimir Putin's hand across the region - the Islamic State was strong enough there to make it fraught to pick any side in what had become civil war. By the time Aleppo collapsed at the end of 2016, with civilians dying or fleeing as the once-great city was destroyed by Russian-backed Assad forces, even critics of Western inaction lacked much specific advice for a practical alternative to American passivity.

But the humanitarian disaster in Mr. Obama's final weeks on the job made the world, as it is, look truly ugly.

And while the best defence for his inaction is that the fallout might have been even worse had the President moved more ambitiously and aggressively, his determination to avoid greater destabilization outside Syria's borders did not seem to resonate domestically. Neither, for that matter, did the fact that fewer Americans died with him as commander-in-chief than likely would have been the case under a president more inclined toward trying to solve the world's problems - or reshape the world as he or she saw fit - by flexing military muscle.

His usual tendency to put everything in perspective, and his expectation that others were capable of doing likewise, again didn't help. In at least one instance, when he publicly referred to the Islamic State as a "jayvee team" - effectively dismissing it as a pale imitator (or junior-varsity version) of al-Qaeda - it reflected an underestimation of an enemy. Meanwhile, in an expansive examination of Mr. Obama's foreign-policy mindset earlier this year, The Atlantic's Jeffrey Goldberg reported that the President was fond of reminding staff that terrorism "takes far fewer lives in America than handguns, car accidents and falls in bathtubs." The facts bear that out, but to the extent that such cool rationalism slipped into public view, it no doubt convinced some Americans that he was indifferent to their fears.

Such fears were especially pervasive in his final year on the job, even though the Islamic State's terrorization of the United States during Mr. Obama's tenure amounted to a few lone-wolf actors that the group may have inspired. And his successor tapped into those fears, claiming that Americans had been insufficiently protected from the very clash of civilizations that many of Mr. Obama's relatively better decisions were aimed at avoiding.

As it turned out, America's citizens lacked an appetite for military adventurism, but struggled to abide the perceived global weakness stemming from its absence. No good choices.

Bridges built, bridges burned

"I didn't know whether he was confident," Alvin Love said recently, "or naive."

He was referring to 1985, and to what he made of the young community organizer wandering a dangerous neighbourhood a long way from where he had grown up, counting on his limited street smarts and powers of persuasion to keep him safe and to get locals to band together in their common interest. But Rev. Love could just as well have been talking about 2009, when Mr. Obama came to power in another town in which he lacked much experience, steadfast in his belief that he was capable of bridging divides by appealing to enlightened self-interest.

For all his clear-eyed realism on policy matters domestic and foreign, Mr. Obama was plainly too optimistic about making Washington a more harmonious place. His inability to do so makes for a grim dichotomy: A president who seemed to have unique potential to bring Americans together leaves office following a brutally polarizing election that replaces Mr. Obama with the most divisive candidate in the country's history.

In the speech that brought him into the national spotlight, at the 2004 Democratic National Convention, Mr. Obama famously pronounced, "There is not a liberal America and a conservative America; there is the United States of America!"

During his final State of the Union address last year, reflecting on two terms of congressional votes along strictly partisan lines, Mr. Obama publicly lamented his own role in proving that wrong. "It's one of the few regrets of my presidency - that the rancour and suspicion between the parties has gotten worse instead of better," he said. "There's no doubt a president with the gifts of Lincoln or Roosevelt might have better bridged the divide."

Some of his old friends in Chicago offer a different take. If they have a criticism of how Mr. Obama wielded power, it's that he characteristically put too much trust early on in those on the other side of the aisle. From this perspective, he failed to make full use of the congressional majority he enjoyed in his first two years in office - compromising on economic plans and failing to aggressively move on social issues, such as gun control, that he would later identify as deeply important to him.

"I looked at him through that first term, and the fact that he didn't ram things through was typical Barack," says Loretta Augustine-Herron, recalling that when she volunteered for him with the Developing Communities Project, she sometimes grew impatient with his attempts at consensus. "My thing is, that's not always going to happen."

It would be tough to argue that Mr. Obama had willing dance partners in Washington. From the get-go, Republicans were loath to give him victories, voting as a bloc against any significant legislation he put forward; compromises he inserted into bills were dismissed as cover for socialist intentions. Pressure from the Tea Party, a populist protest group that came into being in the months after he took office, added to GOP legislators' fears of being seen by supporters as too open to him. After the 2010 midterm elections, the Republicans were armed with a congressional majority that included a new contingent of hardliners who would make their leadership pay for the slightest hint of softness.

As he is about to be succeeded by a man who spent much of Mr. Obama's presidency propagating a conspiracy theory that he is not an American citizen, there is no overlooking the role that bigotry played in some of the most vitriolic opposition to him. Much of the most vicious rhetoric during the Obama years played to perceptions of otherness; the uprising of the "white working class" that swung decisive battleground states in 2016 was tinged with nostalgia for a time when people who looked like him were kept further from positions of power.

Underlying all that were polarizing factors against which any president might have been powerless. Among them were a new media landscape that allows voters to exist in informational silos in which they consume only news coverage that reinforces their views, and congressional maps so gerrymandered to protect incumbents that those seeking re-election have to worry more about true believers who vote in parties' primaries than they do about general-election voters.

But there were also persistent suggestions that, faced with opposition less pliant than he had hoped for, Mr. Obama threw up his hands faster than he should have.

He did not take to D.C.'s culture of after-hours schmoozing and deal-brokering the way other presidents had, although friends point to that as a matter of prioritizing his young family, after growing up with an absent father himself. "He was not out slapping backs at night - he was at home helping his daughters with their homework," Arne Duncan, who served as Mr. Obama's education secretary after going back a long ways with him in Chicago, told me.

Others, not just Republicans but a fair number of Democrats, have accused Mr. Obama of thinking he was above it all - his long-held suspicions that most politicians are creatures of self-interest manifesting itself in a disinclination to stroke the egos of people unprepared, in his view, to act for the common good.

If the level of effort Mr. Obama put into postpartisanship in his first term is debatable, it's clearer that he had almost completely given up on it by his second. Starting even before he was re-elected and ramping up thereafter, he tried less to persuade Republicans to go along with his agenda, and more to find ways to work around them - relying on executive power more unabashedly than many of his predecessors, with a "We can't wait" public-relations campaign touting efforts to bypass an obstructionist Congress.

A few high-profile executive orders - on CubaU.S. relations, the Iran nuclear deal, the shielding of millions of undocumented immigrants from deportation (blocked by a Supreme Court evenly divided because Republicans denied Mr. Obama his right to appoint a replacement for the late Antonin Scalia) - garnered the most attention.

But more unusual was the extent of the President's reliance on comparatively under-the-radar regulations - 560 significant ones, by The New York Times's pre-election count. In keeping with his usual taste for incrementalism, he quietly beefed up everything from environmental standards to human-rights provisions, labour rules to consumer protections.

The downside was twofold: Not only will Mr. Trump be able to quickly reverse many of Mr. Obama's policies using the same mechanisms, but he will be able to point to precedent if he overuses executive power himself.

It's also fair to wonder, now, if a sort of siege mentality conspired with the realities of the information age to lead Mr. Obama to sometimes distance his administration from the public in a way that contributed to mistrust. To put it mildly, he failed to make good on his promise, made on his first day in office, to create "an unprecedented level of openness in government."

Last year, the Associated Press reported that, under his watch, the government set a new record for rejecting Freedom of Information requests - censoring or rejecting requests for government records in 77 per cent of cases. In response to the disclosure of sensitive information by the likes of Edward Snowden and Chelsea Manning, Mr. Obama launched, by executive order, an Insider Threat Program that aimed to stop leaks by asking federal employees to report suspicious activities on the part of co-workers, and to base such reports on dubious behaviouralprofiling techniques.

Meanwhile, even as he lamented how media silos perpetuate political polarization, Mr. Obama limited his press availability, giving primary access to sympathetic outlets. That's much different from what he was like when he first entered politics. Todd Spivak, who as a Chicago reporter covered Mr. Obama more closely than any other journalist during his Illinois senate days, and who was often critical of him, recalled him being unusually accessible even for a state politician. "I think, as journalists, we were all let down by this pledge to transparency," Mr. Spivak said by phone from Pittsburgh, where he now lives. "And certainly that stood in contrast to my experience covering him, when I thought he was very accessible to the press."

Not that any of this necessarily bothered people otherwise inclined to support Mr. Obama.

While continuing to be loathed by the Republican base, his approval ratings as he leaves office are well above 50 per cent, higher than those through most of his presidency.

Perhaps he was naive to think bridge-building was what even many of his own backers wanted.

Though those high approval scores no doubt also have something to do with an appreciation - especially given the majority of voters' apprehensions about what is coming down the pike - that, even if he didn't deliver on his postpartisan promise, Mr. Obama nonetheless conducted himself more gracefully and with much less scandal than have most other modern presidents.

That matters as much to some of his old friends as do any specific policy achievements or failings, because it was important for communities like theirs that he led by example and proved his doubters wrong.

A leader by example, but a legacy in doubt

Johnnie Owens, who still works as a local organizer in Chicago, was nervous back when his old friend took office.

For his country's first African-American president, there was so little room for error. Appearing to be in over his head early on, looking overwhelmed by whatever was thrown his way, getting mired in scandal - any of the things that have befallen far more experienced and nationally tested politicians who have taken the office - would have provided fodder to the "I told you so" skeptics.

Eight years later, whatever criticisms can be thrown at Mr. Obama, nobody who was ever willing to give him a chance in the White House can reasonably say he looked or acted as though he didn't belong there.

Whether responding to economic meltdown or terror attacks or to a level of partisan vitriol few other presidents have faced, he was cool and collected. There was not a whiff of personal impropriety, and his administration was relatively free of the hangers-on that have brought others into disrepute. He boasted what could only be described as a model family, with a spouse who went from a reluctant to a beloved First Lady.

Unlike his immediate predecessors, the bumbling Mr. Bush and scandal-plagued Mr. Clinton, he elevated his office simply by the manner in which he conducted himself.

To listen to people who were around him when it all started on the South Side's much smaller stage, the way that he led by example on the national one was far from a trivial or purely aesthetic matter. Rather, it was part of Mr. Obama's meeting his promise to fellow organizers those many years ago that he would be able to do more for their community if he were sitting on the other side of the table.

By more tangible measurements, his fulfilment of that promise is tenuous. Neighbourhoods where he organized in the eighties, and which he later represented as a state-level politician, had a brutal 2016 - contributing to jaw-dropping Chicago crime numbers, including more than 750 homicides, that speak to everything from bad schools to broken families to terrible citizen-police relations. Talk to young community activists now working the same streets he once did, and you will hear complaints that, while pursuing lofty national and international goals, President Obama failed to move with urgency to address crises in his former back yard.

And although defenders counter that the South Side (along with other impoverished areas of the country) stood to reap long-term benefit from Mr. Obama's social policies, many of those policies have been imperilled by November's surprising election result. As recently as the fall, someone like John Bouman - who heads the Chicago-based Sargent Shriver Center on National Poverty Law, which takes on legal-aid cases that might force policy changes to help the poor, and who considered Mr. Obama a strong ally during his state-senate days - could confidently describe the Affordable Care Act as "probably the biggest single thing to address poverty in America since the 1960s." Now, with a Republican stranglehold on power, nobody knows if Obamacare will survive 2017, or in what form.

It's a similar story with other ways that Mr. Obama tried to create opportunity for those who historically have lacked it. Take criminal-justice reform: The record-breaking number of commutations and pardons he has granted in his final months in office (mostly to those serving exceedingly long sentences for non-violent drug offences), which Mr. Owens cites as an example of the President's "not having lost his way too much," will hold up, and may retain a symbolic value.

But more far-reaching efforts, such as a shift away from private prisons and an attempt to lead nationally on police accountability, stand to be reversed or abandoned by a successor fond of dividing the world into law-abiding citizens and "bad dudes."

Mr. Obama himself has visibly struggled with how to reconcile Mr. Trump's victory with his own usual optimism about slow and steady progress, and not just in the realm of social policy.

Since the election, the President has offered many of his characteristic public assurances about the arc of history. At the same time, a lastminute flurry of executive action - restrictions on Arctic drilling for oil and gas; a final round of prisoner transfers out of Guantanamo Bay; those criminal-sentence commutations - belies a realization that many of his preferred policy paths are about to hit dead ends.

But once upon a time, when he was trying to build from the ground up, the journey mattered more than the destination. The few small victories won by organizers, and the many defeats they faced when they ran into seemingly immovable forces, were less important than the experience gained as community members learned to stand up for themselves in ways that would eventually make for brighter futures.

It would be absurd to apply exactly the same criteria to eight years as the most powerful person in the Western word. And yet even when it looked as though Mr. Obama's preferred successor would replace him - when they could have cited any number of policy accomplishments - Mr. Owens and others once close to the President zeroed in on his influence on younger AfricanAmericans, when discussing what made them proudest of his time in office.

"His presidency has been a boon for our children," Ms. Augustine-Herron said, "because it lets them know they can be who they want to be."

Rev. Love qualified that notion a bit. Some of the young adults in his parish are jaded, he said, by unmet expectations. ("I don't know if anybody could've lived up to the expectations that the African-American community had for Barack Obama - you'd have had to be Jesus, almost.") But the preteens adore him, and the teenagers respect him. And that can change how they see themselves - or, never having grown up in a world in which someone like him couldn't be president, has spared them some of the barriers that previous generations grew up with.

As last year's frequently nasty election demonstrated, Mr. Obama didn't make everyone in his reach their best selves; not even close. But maybe first by winning the White House, then by retaining moral authority through his time there, he did empower people - not just African-Americans, but others who might have felt marginalized by their skin colour or sexual orientation or social status - to carry on fighting to advance issues they care about, beyond where he was able to take them.

Even that sort of legacy, of course, is complicated by Mr. Trump, who boasts almost none of Mr. Obama's equanimity and who appealed in a significant measure to those who believe visible minorities already have too many advantages.

But it is possible that Mr. Obama will soon be elevated further, in perception, by what follows him.

And if the impending ascension of Mr. Trump shakes Mr. Obama's own optimism a bit, it might cause him to double down on his faith in himself to defy the pessimists by bringing others together in common purpose, rather than moving on.

In a follow-up e-mail exchange after the election, Jerry Kellman suggested that the President - like Mr. Kellman himself, and others "committed to justice" - had underestimated "a deep underbelly of greed, narcissism and hatred."

"Because of this," he predicted, "Barack will choose a far different retirement than he otherwise might have."

Based on Mr. Obama's recent hints, that likely will involve remaining in the political arena more than have most ex-presidents - challenging Mr. Trump where he sees fit, and leading a pushback against the gerrymandering of congressional districts that has both benefited Republicans and contributed to the polarization of the electorate.

It will also likely see him being more hands-on, in Chicago's South Side and places like it, than he has been in a long time. One vehicle for him to do so, which he has already indicated he will make use of, is My Brother's Keeper - a primarily privately funded initiative launched by the White House in 2014 to help direct resources toward young men of colour.

Even after eight years running the country, there will be no shortage of work in its communities and on its streets.

On the day I visited Rev. Love, a voice called out as I approached the church's door. It was a young man looking for a handout, the kind of guy the President was mistaken for 30-odd years ago.

The neighbourhood, the pastor said, really has improved. But nobody, least of all Barack Obama, ever promised it would be quick or easy or smooth. Deep breath. Start over.

Adam Radwanski is the political feature writer at The Globe and Mail.

Associated Graphic

After working and organizing on the streets of Chicago, where he also endeavoured to build relationships with local politicians, Mr. Obama enrolled at Harvard University in the fall of 1988.

AP

Mr. Obama's community organizing included work at Altgeld Gardens, a public-housing complex.

JOSHUA LOTT FOR THE GLOBE AND MAIL

Volunteer Loretta Augustine-Herron could grow impatient with young Mr. Obama's attempts at consensus.

JOSHUA LOTT FOR THE GLOBE AND MAIL

In his Democratic National Convention speech in 2004, Mr. Obama famously pronounced, 'There is not a liberal America and a conservative America; there is the United States of America.'

REUTERS

Mr. Obama greets U.S. troops at Bagram Air Field in Afghanistan in 2012; is interviewed by Steve Kroft of 60 Minutes at the White House; and boards Air Force One in Myanmar in 2014.

PETE SOUZA/THE WHITE HOUSE; CHUCK KENNEDY/THE WHITE HOUSE

Top: Mr. Obama with his wife, Michelle, and daughters Malia and Sasha in 2009. Above: On the campaign trail, alongside Hillary Clinton, in 2008.

AFP/GETTY IMAGES/REUTERS

Appetite for risk
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Mark Machin has made a career out of making bold bets that have paid off. As head of CPPIB, he's leading the fund into an era of global expansion and chasing bigger returns
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By JACQUELINE NELSON
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Saturday, January 14, 2017 – Print Edition, Page B6


NEW YORK -- Mark Machin is sitting in a bustling midtown-Manhattan restaurant not long after sunrise, showing off the first of, as he puts it, "55,000" cellphone photos of his grinning daughters, when he's interrupted by a sharp rap on the window.

Behind the glass is a familiar face: Mark Wiseman, the man Mr. Machin replaced last summer as head of the Canada Pension Plan Investment Board. A moment later, the other Mark is spinning through the revolving door, exuberantly shaking hands over the table and chiding us for being laggards at daybreak. "You know, this place only opens at 7:30 - I've already had breakfast!" Mr. Wiseman boasts.

It's a chance encounter that makes a bistro in New York feel like a small-town diner. But it also serves to highlight some key differences between the old and new Marks.

Mark Wiseman, who led CPPIB for four years, is loquacious, warm and can get carried away when discussing a topic he's passionate about - and he's passionate about a lot of topics.

Mark Machin, on the other hand, does not seem like the kind of man to introduce himself by way of a knock on the window. He is more understated when he speaks, and seems perfectly content conducting business out of the spotlight. In the seven months since taking over as the first foreign-born chief executive officer of Canada's largest and most important pension fund, his public appearances and interviews with media have been few.

For Mr. Machin, one of the three biggest surprises of 2016 came from his chatty colleague: Mr. Wiseman somehow managed to keep secret his plan to leave CPPIB for a senior position at asset manager BlackRock Inc.

"The second surprise to me was that the board selected me as the successor," he says between bites of bagel with salmon, pickles and English cucumber. "I understand lots of other things, but I don't understand Canada and I thought that was pretty important for the role. So that was a big surprise."

The third surprise, he says, was that his wife embraced the idea of uprooting their lives in Asia, where they had lived for the past two decades.

The British-born Mr. Machin is no stranger to unfamiliar situations, nor to risk. CPPIB's new boss is a man who has built a career - and a life - on a series of bold bets that have a way of paying off. From medical school at Cambridge to a less-formal education in finance at the school of Goldman Sachs. From London to Hong Kong. And Hong Kong to Toronto, where he's settling into his first Canadian winter.

He arrived at a critical moment. In the past five years, CPPIB's managed assets doubled to $300.5-billion as the fund weathered challenges posed by unexpected geopolitical events, low interest rates and volatile equity markets. Amid that growth and uncertainty, CPPIB put its investment strategy under the microscope.

The goal? Build a more resilient pension fund that will score even higher returns in the future. Out of that intensive review came a plan to gradually, but significantly, overhaul the fund's approach to investment risk by 2020. Seeing it through is Mr. Machin's job.

About 19 million Canadians are counting on him to get it right. While he concedes that many particulars of the path forward have not yet crystallized, one thing is clear: The time has come to be bold.

CPPIB has set its sights on expanding further globally, building new investment specialties and putting more money into private companies and assets such as infrastructure. It's a plan built on taking on more risk, with the expectation of higher returns in the long run.

But it's likely to lead to some bumpy years.

Navigating through it? "That's not going to be easy," says pension-policy advocate and consultant Keith Ambachtsheer. The strategy may be laid out in broad strokes "but Mark No. 2's challenge is to actually execute it. In my view, it's a peoplemanagement thing. It's a talent management thing." The doctor is out The first time he heard about the Canada Pension Plan Investment Board, Mr. Machin was less than enthralled. He was in Beijing serving as vice-chairman of Asia, excluding Japan, at Goldman Sachs when a recruiter dangled a job.

"She called me and said, 'Well, it's not the Bill & Melinda Gates Foundation, but you can wake up every morning and know you're doing something good for 19 million people.' And I said, 'What is it?' She said, 'It's a pension fund.' " His initial thought? It sounded "quite boring."

His decision to take the job stands out as something of an anomaly in a life that has largely been spent avoiding boredom at all costs.

"As with most of us, we don't change that much," says Stephen Peel, who has been friends with Mr. Machin since they met at a bus stop at the age of 11 and who also pursued a career in high finance. "Mark, as he is now, walked through walls because it was sort of intellectually challenging, fun, hard and the right thing to do. And that's sort of where he still goes."

The biggest bet of Mr. Machin's professional life began with a bout of his trademark curiosity. Back in 1990, he was Dr. Machin, interning at a district hospital near the University of Cambridge, where he studied medicine after getting a degree from the University of Oxford.

Tall and trim from years of rowing and running, Mr. Machin would be a reassuring presence in a crisp white lab coat. His bedside manner might at first seem astringent; that is until a typical deadpan, self-deprecating remark betrays his British wit.

While he was studying the human body, he had become increasingly fascinated by a different kind of anatomy: the intricacies of financial markets and how capital moved about the world. He didn't understand it. But he wanted to.

"I had to make a call," he remembers. "Do I continue on in medicine for as far as the eye can see, or should I take a leap and try something different?" What he didn't want was to go back to school. Getting paid to learn was a more attractive prospect, so he applied for trainee jobs at banks that were targeting new business graduates and finance greenhorns from other fields. He settled on an offer from New York-based investment bank Goldman Sachs's London office where he was the only new analyst from the medical field.

"It was curiosity. It wasn't 'I'm going to pursue a career for the rest of my life in finance.' I didn't even think that was an option," he says. "I thought it was something I could probably afford to do - take time out of the medical career and go and do it for a couple of years."

But a few years later, Mr. Machin was on the move - sent to Hong Kong as one of a handful of people on the equity team at Goldman's first Asian outpost.

Mr. Machin, who'd never even been to the continent, faced a steep learning curve. And not just his own.

"I had to correct people, you know, explain to people what Goldman Sachs was. People had never heard of it. They got the name wrong, thought it was Golden Socks, or Golden Sacks - S-A-C-K-S," he says. "And then they had no idea what an investment bank was. A lot of it was just going around explaining."

Mr. Machin's entrepreneurial attitude and his ability to speak to all kinds of stakeholders - from government officials to corporate clients and public market investors - set him apart, says Frank Tang, who worked with him at Goldman in the 1990s and now heads FountainVest Partners, a Chinafocused private equity fund that was backed in 2008 by CPPIB and Ontario Teachers' Pension Plan, among others.

Mr. Tang, who worked on the floor above Mr. Machin at Goldman in Hong Kong, recalls hearing stories about his unusual way of relaxing when the work became intense. "People worked really, really late, and at 11 p.m. when everyone started to order food and call their girlfriends, he'd pick up a medical journal and study those organs," he says with a laugh.

Mr. Machin didn't intend to linger overseas, either. But he was fascinated by economic development in Asia and drawn to the chance to build the Goldman business and compete with the region's stalwart British financial firms, such as Jardine Matheson, HSBC Bank and Barings Bank, which later collapsed.

"I mean, in Asia, you can never get bored," Mr. Machin says of his years at Goldman in Asia.

"It was phenomenal change all the time."

Mr. Machin's Australian wife, Melissa Mowbray-D'Arbela, isn't afraid of change either. Her career has spanned architecture, law, banking, private equity and entrepreneurship. "She's much more interesting and talented than I am," Mr. Machin says, with a mixture of pride and admiration.

Ms. Mowbray-D'Arbela was so moved by the struggles of Hong Kong's distressed migrant women and children, that she cofounded a charity to assist them.

The experience of meeting one pregnant woman in particular would change their family of three forever. After a complicated legal battle, they adopted the baby girl - their second daughter.

Professionally, Mr. Machin's 20year career at Goldman saw him lead capital markets, financing and investment banking businesses in Asia. The team went from unknown to leading multibillion-dollar bond issuances for companies such as China Mobile, and the privatizations of massive state-owned firms such as PetroChina.

"It was not a straight line. It was a huge, huge, huge amount of hard work by hundreds, and thousands, of people. But it was terrific to be part of that," Mr. Machin says. Goldman became the top-ranked investment bank in China during his time there, although it has since been surpassed by other lenders.

Still, Mr. Machin felt there was potential to do more. That's when the recruiter called with the CPPIB offer. There was something about the idea of working for a good cause, doing a job "more worthwhile in the world," that stuck with him.

Plus, his would-be boss, Mr. Wiseman, came with good recommendations from trusted associates.

So, in 2012, Mr. Machin came aboard as senior managing director and president of CPPIB Asia Inc., running the pension fund's first international office, which was ramping up with a small real estate presence and some other fund investments.

There were about 20 CPPIB staff on the ground, compared with the hundreds at Goldman.

At the time, about 60 per cent of the fund's assets were invested outside of Canada. Just over a year later, Mr. Machin gained oversight over CPPIB's international investment activities and its global advisory relationships, as well as the Asian operations.

The promotion meant a gruelling new travel schedule. When he wasn't in the air, the phone beckoned. "Calls would start 8 p.m. through midnight, four nights a week. Friday nights at 1 a.m. - that's where my concentration is really fading. But I was pretty diligent with this stuff," he says.

Today, less than 20 per cent of the pension fund's assets are in Canada, and that figure is set to decrease even further in the coming years. China, in particular, will likely be a hotbed for new investments, thanks to its rising middle class and economic-growth projections. Based on those projections, the pension fund bought a series of Chinese malls for its real estate portfolio last year.

"We've gone from [being unknown], to now being understood and recognized and being, you know, very high on the call list for major situations in Asia and internationally, as well as also in our home North American markets," Mr. Machin says.

"That's not important just to make us feel good. ... It's important that we're high on that list so we get to see the best investment opportunities so we can create the best value for our 19 million people."

Charting a new course There's a lot of work ahead.

With almost 1,300 employees in seven offices across the world, CPPIB is among the top-10 pension funds globally. It strikes a deal or makes a transaction practically every other day, with 180 in its fiscal 2016 year.

The fund is now invested through more than 25 different investment strategies, up from just six a decade ago. Still, Mr. Machin foresees adding a few more specialties as the fund grows. A report from Canada's chief actuary projects assets will climb to $476-billion by 2025.

To keep track of the moving parts and missing pieces, he has "The Chart."

"Literally, one of my favourite charts is a big Gantt chart with everything that's happening and how it's fixed to go," he says, referencing the type of horizontal bar graph often used to show the timelines and status of a large project's components.

"There's some things we might think of as a perfect platform that might not come around for five-plus years. We just want to watch it and move when the opportunity arises. We're determining that sort of strategic long-term lens of where we want to be."

It must be a big chart. "It's printed in very small font," Mr. Machin says dryly.

In the 2014 fiscal year, CPPIB's board and management team, including Mr. Machin, drew up the broad strokes of an investment strategy for the next decade. The plan was based on an idea that the fund could stomach more volatility and risk in its investment portfolio because of its size, the certainty of contributions from working Canadians and the long-term nature of the CPP fund.

Moving along the spectrum of risk might cause financial results to see-saw in the short term, CPPIB reasoned, but in the long run the fund should earn higher returns for pensioners. That would allow the fund's stewards to decrease contribution rates, increase paid benefits or just safeguard the plan against future unknown forces.

This direction was hashed out while Mr. Machin was overseeing the international business, but his promotion to CEO now puts him in control of how to shape the finer details. Right now, the targets and plans are "very short statements, but we end up with a huge number of knock-on consequences," Mr. Machin says.

"All the plumbing that goes on behind that, and how do you actually do that? We're just in the thick of it. It's going to take a couple of years to get that done properly," he says, his dulcet accent straining slightly over the din of the dining room. "I need 22 screens working away on our new investment framework. That's the type of thing I'm spending all my time on."

He thinks of the task as having two parts. The first, is to develop a better way to see the results of investment decisions and adjust accordingly. "We're a long-term investment organization, but we need to be able to decide, okay we structured the portfolio this way, is it working well? What were the consequences of those decisions?" The second goal is making sure all the investment teams are working together when the pension fund takes a position on a movement in the market, something Mr. Machin refers to as "strategic tilting." That means when a top-of-house view is made that European credit is cheap, or that U.S. equities are expensive, the whole fund is working together in a cost-effective, systematic way to invest along those themes.

In the last decade, CPPIB has dramatically extended its range of investments, from far-flung businesses to buildings. In the past few months alone, CPPIB has spent hundreds of millions of dollars on office space in New Zealand, shopping malls in China, a solid-waste disposal firm and a vacation cruise company with ships sailing to 44 countries. This expanded range comes with some complications.

Infrastructure, real estate and private investments are tougher to buy and sell quickly. These assets are valued less frequently than the instant ups and downs of the public markets, and require making some assumptions.

"As they move into more private equity - and this is true for everybody - you increase the operational risk of misestimating the performance of those assets," says Jason Mercer, an analyst with Moody's Investors Service who rates the pension fund's financing arm, CPPIB Capital Inc. He has noted in reports that CPPIB doesn't have a dedicated chief risk officer, unlike financial-sector peers.

Navigating by Mr. Machin's road map will require filling in some holes where the fund could invest more, as well as reorganizing staff and finding a new chief financial officer. Benita Warmbold, who also oversees investment risk, said this week that she plans to retire in June.

The pension fund also recently put its infrastructure, real estate and agriculture-investment groups together after the departure of a third Mark - Mark Jenkins - who left the role of global head of private investments.

All of this change comes at a time when the spotlight seems to be intensifying, forcing Mr. Machin into a more public role than he's used to. In early November, the CEO was called before the House of Commons finance committee - the first such request of a CPPIB leader in 14 years - to explain the fund's investment strategy, its need for independence and evolving approach to risk. Just two weeks later, he was sitting alongside Prime Minister Justin Trudeau and other federal ministers discussing the potential to create an infrastructure bank in Canada.

And the public toll will only rise as the fund adjusts its approach to risk, says Malcolm Hamilton, a pensions expert and senior fellow of the C.D. Howe Institute.

"The hard thing here is that as right as the new solution is, it will make them look less like all of the pension funds to which we now compare them," he said, adding that CPPIB has probably been unduly conservative and should never have been compared to the investment approach of other more mature or fully funded pension plans.

"There will come a year when they're going to have a year with dramatically worse or dramatically better returns than the other plans ... and everyone should get their head around why that makes perfectly good sense."

The pension plan has faced more scrutiny from Canadians and lawmakers ahead of the planned increase to the Canada Pension Plan contributions that workers and employers will make to fund their retirement years, in order to boost the benefits they will receive. That is set to begin in 2019 - around the time Mr. Machin's retool of the fund's current investment approach is set to wrap up. This separate pool of contributions will require its own investmentmanagement strategy.

Mr. Ambachtsheer is in favour of bringing the thinking of the Goldman Sachs "profit machine" to the world of public service.

But there are operational challenges that come with such a transition, he says. There's the control question that comes with managing so many different investment lines: "Are you getting the diversification that you think you're getting?" he says. "And then you've got a motivation question, an incentives question, around can you get the kind of people that you need to run this kind of an organization - will they stick around long enough to actually make a difference? You have to have a strong-enough culture that people have to buy into."

As he considers the changes CPPIB needs to make, Mr. Machin pictures a decathlete that's still developing his abilities. "I think of us as fairly grown up. We have a lot of muscle and a lot of ability to do different things, but we're an athlete with a good long period of development ahead," he says.

Moving from passive to active asset management, and local to global investing, CPPIB's evolution has been rapid and expansive. Mr. Machin is the coach now charged with making the fund a tougher, more disciplined competitor.

"There's not going to be explosive growth from here," he warns. "This is about applying the strength we have in lots of intelligent ways and making sure we do so more and more effectively."

Associated Graphic

Mark Machin, the CEO of CPPIB who wants a less conservative investment strategy, walks in its offices in Toronto on Thursday.

MARK BLINCH/GLOBE AND MAIL

Mr. Machin is optimistic about his investment plan but warns that 'there's not going to be explosive growth from here,' but rather an intelligent application of resources to better serve the pension fund.

MARK BLINCH/GLOBE AND MAIL

THE GLOBE AND MAIL SOURCE: CPP INVESTMENT BOARD, 2016 ANNUAL REPORT

Auto sector nervously awaits the Trump card
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Why the U.S. president-elect's promise to rip up NAFTA has shaken head offices from Ontario to Detroit to Japan
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By GREG KEENAN
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Saturday, January 7, 2017 – Print Edition, Page B6


PULASKI, TENN. -- Canadian auto executive Keith Henry was enjoying a vacation in Florida this week, when Donald Trump's Twitter feed caught his immediate attention.

Mr. Henry is president of Windsor Mold Group, a parts maker with three factories in and near Windsor, Ont., five in the United States and one in Queretaro, Mexico. Prior to the U.S. election in November, the executive had been contemplating whether to expand the Mexican operation.

Then Mr. Trump won a surprise victory on Nov. 8, partly on a promise to rip up the North American free-trade agreement and make U.S. manufacturing great again.

If anyone doubted the president-elect's resolve to do just that, those doubts are gone now.

Before he is even inaugurated, Mr. Trump seems determined to try to rewrite the rules governing the North American automotive business, 140 characters at a time.

This week, he turned up the heat, using Twitter to threaten to impose border taxes on vehicles General Motors Co. and Toyota Motor Corp. ship to the United States from Mexico.

His tweet warning to GM had barely been digested when Ford Motor Co. cancelled plans to build a new $1.6-billion (U.S.) assembly plant in Mexico, which had drawn fierce criticism from Mr. Trump during the election campaign.

"I was cautious then and I'm even more cautious now" about building a larger business in Mexico, Mr. Henry said in a telephone interview as he was driving back to Windsor. "The events of the past week have given me even more pause to think."

The hectoring of three global giants in the world's largest manufacturing industry by the most powerful politician sent shudders through head offices from Japan to Detroit to Ontario. The threat of tearing up NAFTA or imposing big tariffs on vehicle exports into the United States is a serious one as Mr. Trump seeks to force companies selling in the U.S. market to keep jobs in the country.

Auto makers and parts suppliers in Canada have so far escaped - at least publicly - Mr. Trump's Twitter wrath.

But a quarter of a century of continental free trade has transformed the auto industry - so much so that almost all global auto makers from Audi to Toyota have created intricate supply and distribution chains that stretch across the two borders. The end of the trade agreement would disrupt all of that, creating chaos in auto logistics and investment. As Mr. Henry's comments show, the mere threat of it is likely to cause at least a temporary freeze in new investment in some places.

For Canada, the consequences of Mr. Trump's anti-trade crusade are massive. At stake is the country's position as a nation that punches above its weight in the global auto sector. Although there is no homegrown auto maker, car makers as a group build more vehicles in Canada than they sell. That, in turn, has spawned a successful domestic auto parts sector; companies such as Magna International Inc., Martinrea International Inc. and Linamar Corp. are among the handful of large Canadian manufacturers that can be described as global champions.

If Mr. Trump follows through and creates a tariff wall protecting the U.S. industry, several thousand direct jobs at Canadian parts companies are in jeopardy and potentially more than $60billion (Canadian) worth of finished vehicles that are made in assembly plants in the auto heartland of Southern Ontario and delivered to Americans. For Canadian parts makers that now are now lean, efficient and competitive after having survived the original shock of NAFTA, the threat to Mexico is also a menace to them. Any actions that would halt the expansion of vehicle assembly in that country would choke off one of their key growth markets. Mr. Henry said any parts maker would be apprehensive about growing in Mexico until the new administration makes its North American trade strategy clear.

"I would even extend that into Canada," he said. "If you're a U.S. supplier or a European supplier looking to expand into North America, would you consider establishing or increasing your production capacity in Canada?" The potential ramifications to Windsor Mold aren't confined to its Mexican operations, he said in an interview in the boardroom at the company's Tenneplas plant in Pulaski, Tenn., a few weeks after the election. Tenneplas, which sits about a 90-minute drive south of Nashville in a town that has the dubious distinction of being the original home of the Ku Klux Klan, ships plastic parts to Mexico as well as assembly plants in Mississippi, Michigan, Missouri, Kentucky and Indiana.

As country music plays over the plant's intercom, seven-metre long moulding machines pop out plastic radiator shields, door trim and parts called cowl vents that sit at the base of a vehicle's windshield. The Windsor Mold operation is a prime example of the auto sector in the NAFTA era: A Canadian company that adroitly expanded in the United States and Mexico as the auto assembly industry moved south from the Great Lakes region and is now making parts in all three countries that are snapped into vehicles sold in all three countries.

Mr. Trump may want to turn back the clock to an era when a made-in-America sticker on a car meant precisely that. But at what cost?

Canada was originally a reluctant partner in the negotiations for a continental trade agreement.

Ottawa's decision to join the talks was in part defensive - to make sure we stayed on the same path as our largest trading partner - but also to correct some of the defects in the 1989 Canada-U.S. free-trade deal.

The United States wanted to help bring stability to its troubled southern neighbour and open a new market to U.S. companies.

But the NAFTA deal was not without controversy - especially when maverick presidential candidate Ross Perot got some traction with his campaign against it. "If you're paying $12, $13, $14 an hour for factory workers and you can move your factory south of the border, pay a dollar an hour for labour ... and you don't care about anything but making money, there will be a giant sucking sound going south," he said in one presidential debate.

"Giant sucking sound" became one of the most memorable phrases of the election. But Bill Clinton won and NAFTA became a reality on Jan. 1, 1994.

In the early years of the deal, investment by auto makers poured into the southern United States, not Mexico. Since 2010, however, vehicle companies have pumped about $21-billion (U.S.) into new and existing factories in Mexico. That's about one-third of the $63-billion global auto makers invested in U.S. facilities. All that investment has shifted the centre of gravity of vehicle manufacturing southward from the days when the Great Lakes basin dominated. The operating system for auto makers and their parts suppliers in Canada, the United States and Mexico is now based on the trade agreement and dutyfree access of vehicles and parts among the three countries.

Vehicles built in any one of the countries are sold in all three.

Components manufactured in one of the countries are assembled into vehicles made in that country or one of the other NAFTA members, sometimes all three. Finished vehicles and the parts that go into them cross borders seamlessly - although the perpetual mess at the WindsorDetroit border is one nagging reminder that transportation is not as smooth as auto makers and their suppliers would like.

"It's like an ecosystem," Mr. Henry said. "It's very interconnected and it's very related." The creatures in that ecosystem are on high alert given Mr. Trump's hostility toward NAFTA and his threats to impose tariffs of as much as 35 per cent on vehicles made in Mexico.

NAFTA is "one of the worst deals ever made of any kind, signed by anybody," he declared during a September debate with Democratic candidate Hillary Clinton in the presidential campaign. Executives of Canadian auto parts makers beg to differ.

"We've spent a ton of time making the most efficient logistical supply chain in the history of the world," said Rob Wildeboer, executive chairman of Martinrea International Inc., the third-largest Canadian auto parts supplier as measured by annual revenue.

"That supply chain means we get incredibly high-technology, stateof-the-art vehicles at a very decent price." Tariffs on Mexicanmade vehicles will raise prices for U.S. consumers as well as Canadians, he said.

"Ultimately, the customers are going to say 'Dear Donald, some of this stuff doesn't make sense,' " because they won't like the price increases, Mr. Wildeboer said.

A tour of Martinrea's Caledon Tubing plant in St. Marys, Ont., illustrates how the company - and the entire industry - has come to rely on NAFTA as a guiding system. Copper-coated low carbon steel that is used in brake fluid lines arrives at Caledon Tubing from Ohio, where it is roll formed into a double-walled tube about five millimetres in width.

Then it's coated for corrosion protection, coiled and put into boxes that hold about 11,000 metres of tubing.

The brake tubing is then transported to Martinrea plants in Mexico, which in turn ship some of it back across the Mexico-U.S. border to General Motors Co. assembly plants in Arlington, Tex., and Fort Wayne, Ind. The tubing is installed on GM sport utility vehicles and trucks that are sold in the United States, but also cross the U.S.-Mexico and Canada-U.S. borders to be sold to consumers.

"It's amazing to follow that material from its infancy stage right to the end product, right to the end user, which could be us at the end of the day," said Peppi Rotella, assistant plant manager of Caledon Tubing.

Caledon Tubing ships 244,000 metres of brake tubing a week to Mexico, out of a total of 1.23 million metres sent to auto makers in the NAFTA countries.

Parts flowing out of Mexico have helped Magna International Inc. remain competitive in the automotive seating business, chief executive officer Don Walker said. Seat covers are cut and sewn in Mexico because it's highly detailed, manual labour and it's hard to find people in Canada or the United States who want to do that work, he said. If costs were too high in Mexico to do that work and it had to be done in China, for example, transportation charges would increase the costs of the fabric that is shipped to a seating plant to be assembled into seats.

"The costs of the cut and sew would be higher, which means that the seat cost is higher, which means the vehicle cost is higher, which means the vehicle makers are less competitive," Mr. Walker said.

Mr. Trump has threatened to impose tariffs of 45 per cent on goods from China, but it's not clear if he would slap tariffs on vehicles imported from Europe or South Korea and whether that would lead to a World Trade Organization battle or whether he would adhere to a WTO rule requiring the United States to remove such tariffs. Mr. Walker pointed out that other industries such as electronics, the high-tech sector, transportation and materials suppliers have a stake in the debate because they depend on a competitive auto industry.

"If anything happens to make [auto] less competitive ... jobs will go down," he says.

Magna was operating in Mexico before NAFTA came into force, but now has 30 plants in the country and 27,100 employees, more than it has in Canada or the United States. "I think it's been good for Canada and I think it's been good for the States," Mr. Walker says. "If it wasn't for NAFTA, I think we would have fewer employees in both countries."

In 1999, five years after NAFTA came into force, Magna had 17,000 employees in Canada and 11,500 U.S. workers. Today, the parts maker employs 22,400 Canadians and 24,100 Americans.

That's not entirely a result of NAFTA, but includes acquisitions made in the past two decades and a structural change in the industry as auto makers outsourced almost all of the parts manufacturing they once did themselves.

By several measures, Mexico has made the biggest gains as the auto industry in North America restructured itself to adjust to the trade deal. Mexico's share of North American vehicle production has almost tripled to 21.7 per cent from 7.6 per cent; vehicle production itself has more than doubled to 3.675 million annually and is projected to grow to five million by the end of the decade.

The country's trade surplus with Canada soared to $11.5-billion (Canadian) last year from a preNAFTA level of $2.1-billion.

U.S. data released earlier this month show that the massive growth in auto production in Mexico will enable it to surpass Canada this year for the first time as an exporter to the United States. By those same numbers, Canada has been the biggest loser since 1994. Canada's share of North American production has fallen more than the U.S. share on a percentage basis, while employment in the parts and assembly sectors in Canada and vehicle output has plunged since hitting a post-NAFTA peak in the late 1990s.

NAFTA is not the sole cause of the drop in Canada's vehicle production and employment. The trade deal coincided with a massive swing in consumer demand in North America away from the Detroit Three and to Asia and Europe-based auto makers. That shift led to the closing of several Detroit Three assembly and parts plants in Canada.

The lower employment numbers on the vehicle assembly side of the ledger are actually a positive indicator, argues industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. Canada is now producing about the same number of vehicles it did in 1993 with 13,000 fewer workers, a signal that productivity has improved.

NAFTA has also forced Canadian auto parts makers to become more competitive, Mr. DesRosiers adds.

One noticeable trend, however, is that Canada has not been obtaining its proportionate share of new automotive investment in North America. Between 2000 and 2010, auto makers invested about the same amount of money in Canada as they did in Mexico - $7.4-billion (U.S.). But the $21-billion spent in Mexico since then dwarfs the $4.2-billion spent on existing or new Canadian operations, data in a report done earlier this year by the Center for Automotive Research (CAR), an industry think-tank based in Ann Arbor, Mich., show. The CAR report notes, however, that this is not a result of closing U.S. plants and reopening them in Mexico.

"Much of the reduction in U.S. share [of output] is due to new production coming online in Mexico rather than shuttering and moving current U.S. production capacity out of the country," says the report, entitled The Growing Role of Mexico in the North American Automotive Industry. While Windsor Group, Magna, Martinrea, Linamar Corp., Exco Technologies Inc. and other Canadian parts makers have invested heavily in Mexico, the value of auto products imported into Canada from Mexico far exceeds Canadian exports to Mexico, as the trade data show.

The auto trade deficit with Mexico represents almost two-thirds of Canada's overall auto trade deficit of $18.5-billion (Canadian), said Jim Stanford, former economist for Unifor, which represents workers at the Detroit Three's Canadian plants. "That's far larger and more damaging than anything we ever had with Japan, even in the peak years," said Mr. Stanford, who is now a professor at McMaster University in Hamilton and director of the Centre for Future Work in Australia.

The bilateral trade deficit corresponds to the loss of 16,000 of the 40,000 jobs in the vehicle assembly and parts sector since 2001, he said. What Canada could seek in a renegotiation of NAFTA would be limits on such trade imbalances, he added.

But the jobs aren't likely to return to Canada - or to the United States for matter, which is Mr. Trump's goal in seeking to open up the agreement. The job market in Pulaski, a town of about 8,000 people, provides one explanation of why that is the case - it's hard to find people to fill existing openings.

At SaarGummi Tennessee Inc., two doors down from Tenneplas in an industrial park on the south side of Pulaski, a sign on the outside of the factory proclaims: "We're hiring. Walk-ins welcome."

SaarGummi employs about 240 people making automotive sealing systems. In the north end of town, Magneti Marelli SpA is looking for people to work in its automotive lighting plant.

Employment websites in the area say the auto parts company is offering $10.50 (U.S.) an hour to start, but will boost that with a $1 an hour bonus for anyone with perfect attendance in the first month. Hamburger chain Hardee's is running advertisements on a local country and western radio station seeking people to start at $8.50 an hour.

The unemployment rate in Giles County, where Pulaski is located, was 4.5 per cent at the end of September, just under both the state and national jobless rates of 4.6 per cent. Even such states as Michigan, Ohio and Indiana, whose manufacturing sectors have taken some of the big hits in the southward shift of jobs, don't appear to have huge pools of excess labour. Indiana's rate of 4.2 per cent is lower than the national rate, while Michigan and Ohio are slightly above the national average at 4.9 per cent.

Mr. Henry said Tenneplas pays competitive wages, but the pay scale was not the reason for locating in Tennessee or for opening Mexiplas, the company's plant in Queretaro, which opened in 2011.

"We've never chased the dollar in terms of wages," he said. "I'm not in Mexico to take advantage of cheap labour. I'm in Mexico because our customers are building vehicles in Mexico and they need us close to them."

He and other senior executives at Canadian parts makers point out that opening production facilities outside Canada also creates jobs at home in sales, engineering, design and other highly skilled functions. "Our IT department - we've got 30 people in that and all of that is in Windsor," Mr. Henry said. "That's all supporting all of our different manufacturing operations."

Associated Graphic

Ford and Lincoln vehicles are parked outside Ford Motor Co.'s assembly plant in Oakville, Ont., in November, 2016. Ford has cancelled plans to build a $1.6-billion assembly plant in Mexico after the proposal drew criticism from president-elect Donald Trump during the election campaign.

CHRIS HELGREN/REUTERS

Above left, Liz Samms inspects brake lines destined for the United States made by Caledon Tubing in St. Marys, Ont. Above right, Peppi Rotella, right, assistant manager at Caledon Tubing, helps Marcello Pacia load a coil of brake lines into a crate to be shipped to Mexico.

GLENN LOWSON/THE GLOBE AND MAIL

Vehicle components made by Linamar Corp.'s 43 manufacturing plants worldwide are tested in Guelph, Ont.

GLENN LOWSON/THE GLOBE AND MAIL

PLAN BEE
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Sharp, influential and smutty, Canadian Samantha Bee may be liberal America's best weapon in the war against Donald Trump's lying, equally dirty mouth. Ellen Vanstone reports from New York
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By ELLEN VANSTONE
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Special to The Globe and Mail
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Saturday, January 7, 2017 – Print Edition, Page R1


It was a funny segment about rape kits that really made me sit up and take notice of Full Frontal with Samantha Bee.

The show had already garnered a lot of press when Samantha Bee debuted last year as the "only woman in late-night," bouncing around the stage in a colourful blazer instead of sitting behind a desk and lacing her rapid-fire commentaries with breathtaking profanity. When Donald Trump boasted about groping women and newscasters groped for P-word euphemisms, Bee cheerfully rattled off 25 synonyms for female genitalia that rivalled Carol Shields's poetical penis paragraph in Larry's Party.

But the rape-kit segment was a particular highlight. It opens with news clips about untested kits across the United States, including more than 20,000 in Texas ("Omigod, we get it, Texas, everything's bigger there"), then shows untested kits being tossed to save space ("You guys are taking the Marie Kondo method a little too far"), followed by news of a bill requiring rape-kit testing that passed unanimously in Georgia - only to be blocked by Republican Senator Renee Unterman. Bee consults a Feminist Rule Book ("No rape jokes. And don't be mean to other women"). She tosses the book ("Thank you for your service") and addresses Unterman directly: "Woman, have you lost your [effing] mind? If the Confederate clown car that is the Georgia House can come together on this bill, who are you to block it?" By the end of the segment, both Bee and her audience are slightly breathless, but many rewatch online for the novelty of what Full Frontal offers: authoritative reporting on important issues, delivered with unapologetic emotion, overlaid with the kind of sharp comedy that obviates disempowering female victimhood. Bonus gift: The rape-kit segment had an impact, inciting so much media backlash that political insiders credited Full Frontal for helping the requirement finally pass, folded into a different bill that squeaked into law one minute before a midnight deadline.

As Full Frontal went from strength to strength - ratings to rival The Daily Show, where Bee, 47, had been a correspondent for 12 years; U.S. cable channel TBS ordering a second season (it returns Jan. 11 on the Comedy Network in Canada); multiple awards and an Emmy nomination - and as Bee, along with the rest of us, excitedly anticipated a Hillary Clinton presidency, a lot seemed right in the world of comedy and politics.

Then Trump happened. And things weren't so funny any more.

Whatever the reason for the election upset - e-mails, xenophobia, Jimmy Fallon and the Donald practically braiding each other's hair on NBC - he won, the reality paradigm shifted, and suddenly comedy felt different, too.

For liberals raised on the feel-good (or at least superior) political satire of Saturday Night Live's Weekend Update, Jon Stewart, Stephen Colbert, John Oliver, Bill Maher et al., the clever jokes of late-night suddenly felt beside the point, verging on tasteless in an uncertain world. Yes, Full Frontal's approach was qualitatively different.

But would her weekly show hold up in a Trump presidency?

Could Samantha Bee's smart, dirty, non-patriarchal mouth save us from a man who will soon be the most powerful, lying, race-baiting misogynist in the world?

Reinventing late-night on her own terms

Samantha Bee is sitting in her corner office on West 57th in Manhattan, across the street from the CBS studios where her show is taped. The room is tastefully appointed, except maybe for the large framed photo of Burt Reynolds. Bee exhibits that combination of friendly openness and polite reserve which, since she's from Toronto, I'll describe as typically Canadian (she also has U.S. citizenship).

She has a calmness that's at odds with her onstage persona.

In performance mode, she never stops moving - swaying, bobbing, with an intense, unconscious facial expression, even when she's off-camera, that reminds me of a pro athlete in the zone.

She laughs when I tell her this.

"I'm the most unathletic person in the world."

But she takes the "what now with Trump?" question very seriously.

"I've been thinking about that since he won. On the night of the election, we were all here until the middle of the night, watching the results come in and slowly retreating into our blankets. All I could think was: What is this going to mean for the show?" She laughs. "'Fuck the world!' No, I mean, I care about the world, too. But that's a separate conversation."

The question, she says, is "how to give the office some level of respect, because it is the highest office in the land. Do we have to? Or do we go in harder?

"The main thing we have," she says, "is that we are very honest." From the second TBS offered her a late-night slot, she says, she knew she wanted to do a show that came from a visceral, instinctual place: "I call it my 'inner swamp,' which is what we called it in theatre school, which sounds really disgusting, but I really like it."

Bee wasn't asked to replace Jon Stewart when he left The Daily Show, and whatever she may have felt at the time, she's grateful to have created her own show. In the world of late-night, following in Stewart's footsteps would have locked her into a traditional format: the desk, the guest interviews, the inevitable comparisons with hosts who preceded her. With Full Frontal, Bee has been able to reinvent the genre on her own terms. The closest any other host comes to her passionate, rabble-rousing style is John Oliver, but Bee takes the profanity beyond his mere A-holes and F-bombs.

In a patriarchy that has conditioned all of us to struggle with sexist preconceptions, it may appear as a contradiction - how can this respectably married (to former Daily Show correspondent, Full Frontal executive producer and fellow Canuck Jason Jones), cake-baking, erstwhile mommy-blogger with three children under 12 go off to work and shamelessly turn the air blue on national TV? It tends not to be the kind of question that John Oliver, also married (to a war vet), also a parent, also fond of spluttering expletives, gets asked. It helps if you realize that, by using language traditionally meant to demean and intimidate women, Bee is co-opting and neutralizing its destructive power.

When I ask Bee how she'd define the difference between other late-night shows and Full Frontal, she offers an example: "On The Daily Show, I did a piece about rape victims who have to fight for custody if a child was born. Even if their rapist was in prison, he could make a case for custody and visitation. I thought it was 100-per-cent worth telling, but there were a lot of goofy jokes in it to lighten the mood, and in the end, I think we pulled it back from the edge in a way I wouldn't choose to do on my own show. I don't fault Jon - it was his sensibility and his show, and he cared deeply about the story. But it was a really great lesson in what you can do when you're not telling the story through someone else's editorial point of view."

With her own show, she gets to dictate tone and content. "I will say, I think it's really refreshing to talk about abortion. It's actually more challenging for people than anyone would think."

As for whether Full Frontal with Samantha Bee can save the world from Trumpism, it's the kind of question she's possibly tired of answering. The night before, when an audience member asked, "Do you feel your show has a responsibility to the world, and not just to make funny jokes?" Bee got a laugh with her one-word answer - "no." Asked to elaborate, she says, "I'll never, never, never go there. There's a really fine line between the comedy we do and activism. If you step over that line for 'good,' your comedy show is dead."

And yet, you can see where viewers might get confused. For one thing, she exhorts. At the end of the rape-kit piece, she wishes someone would run against "ding-dongs" like Unterman. She buys a "shit ton" of Girl Scout cookies after the Archbishop of St. Louis, Mo., asks parishes to cut ties with the Girl Scouts, citing conflicts over contraception and abortion. Her website provides donor info for refugee causes and Syria's White Helmets, and she raises money for Planned Parenthood by selling T-shirts featuring an obscene epithet taken from one of the misogynistic tweets that she, like all opinionated women, must endure in this business. After the mass shooting in Orlando in June, Bee and her staff revamped the entire show overnight to address gun violence.

Bee, her voice shaking with anger, began with: "Hey, is it okay if instead of making jokes, I just scream for seven minutes?" The sense of mission is felt behind the scenes as well. Full Frontal's diverse staff is setting a new standard for late-night, and even crew members see Bee as a crusader. Head utility technician Kevin Whitfield tells me he's been at CBS for 43 years, his uncle was the first black cameraman at CBS, and his feminist wife is appalled at his postelection optimism. But he's confident Full Frontal will make a difference: "This show is one of the vehicles that's going to help people get together."

In the Full Frontal offices, serious political discussions are constant. Supervising producer Pat King is mulling over an idea about how the word "conservative" has lost all meaning. "You go back to the birth of conservatism with Edmund Burke and he supported the American Revolution because, yeah, these people aren't being represented well but they basically want to keep the structure of government they have in place. But he didn't support the French Revolution because those people just wanted to burn everything to the ground. You look at conservativism now, and it's burn everything to the ground - privatize Medicare, get rid of Obamacare.

These things are radical. They're not conservative in any way."

In the next office, showrunner Jo Miller, who worked with Bee at The Daily Show (and was the first person Bee called when she got her own late-night slot), rails about the left: "We are just completely fed up with the term 'identity politics' being thrown around and the panicked Democratic response to loss being to throw black people under the bus and everybody move to Wisconsin and hold hands with a farmer."

But there's no mistaking this is a workplace also committed to having fun. On Miller's wall is a poster of Woodrow Wilson labelled with the same epithet Bee gets called on Twitter, overlooking 50 bottles of bourbon Miller received from fellow producer Tony Hernandez for her 50th birthday.

As we're talking, executive producer Miles Kahn sticks his head in the door to discuss a cartoon for that night's show: the Statue of Liberty setting New York Harbor on fire in 1939 to block an incoming boat of Jewish refugees fleeing the Third Reich. But the fact-checkers are saying their boat didn't actually enter the harbour. Miller says she doesn't think there was actual fire in the torch either. It's a metaphor.

Kahn dryly answers, "Look, I wasn't there. That was a prepost-truth society, so we don't know what happened."

Over two days of formal interviews and many casual conversations with Bee's staff, no one would agree with me that Full Frontal leans more toward journalism and advocacy than humour.

"My job is to make a comedy show," writer and correspondent Ashley Nicole Black says. "If I focus too much on the changingthe-world aspect, the comedy suffers." If anything, the show has changed her, she says. As a black person trying to get white Republicans to say "black lives matter" in one segment, she says, "I had so many people put their arms around me and very kindly say some of the most racist things I've ever heard in my life. My conclusion is they're good people, but they've been fed a steady, non-stop Fox News diet of hateful information, and they're trying to square off in their head, 'How can I love this person who's in front of my face, because I'm a loving person, when I have all this information about how terrible black people are?' " Getting out to meet those people, "and connect with them and talk to them," she says, "has just really expanded my idea of what America is." Kahn, whose 92-year-old grandmother appears in a samanthabee.com video wearing a T-shirt with - yep - the everpopular obscene epithet ("My grandson Miles tricked me into wearing this T-shirt on his fakakta show!"), says they're always "striving to come up with new ways to tell complex stories, and then somehow make them funny. We really want to hear people out - have good arguments and then make a dumb joke too."

Miller will go so far as to say, "I think being funny is a necessary part of changing the world." She cites the Kabarettists of 1930s Germany. "I was reading the first-person account of a man who went to see Werner Finck" - an anti-Nazi comedian - "with his girlfriend, and they emerged with the feeling of courage for the first time. Now, we are not living under Chancellor Hitler, and free expression has not been outlawed, and I'm not making an equivalence. But the role of laughing, of showing people how to laugh, not just in the darkness, but at the darkness, I think is helpful to people."

Ultimately though, "comedy and satire has very little effect on the world," she says. "If that was our aim, we'd probably all kill ourselves."

'It's all of us against Trumpism'

Bee's final show of 2016 was classic Full Frontal: a focus on local politics, exhortations to action and small encounters between unlikely characters.

The local politics are in North Carolina. After chastising whiny liberals who wanted to subvert the U.S. Electoral College, Bee shows how state Republicans gerrymandered districts to gain power, then abused that power to kneecap an incoming Democratic governor.

Bee delivers a Rick Mercerstyle rant: "While Democrats are busy signing petitions and frantically googling the word 'emoluments,' savvy Republicans get elected to the state house, shut the door and go hog-wild, until one day you wake up and wonder, 'Hey where'd the Planned Parenthood go?' and 'Why is my tap water so thick?' So if you're looking for a place to put your energies, stop trying to overturn a national election and start working on a local election. They matter."

The unlikely combination of characters are Veterans for American Ideals and Syrian refugees. Full Frontal correspondent (and Bee's long-time friend and fellow Torontonian) Allana Harkin cites charges that refugees are draining resources from homeless vets. Then, animated love hearts float around her head as former marine Phil Klay explains media are falsely pitting the two groups against each other: "It's absolutely important to take care of veterans. It's also pretty important to take care of refugees."

The capper is a segment with Bee interviewing Glenn Beck at his radio studio in Dallas. After years of hateful right-wing rhetoric, the talk-radio host has apologized for dividing America and helping Trump get elected; he's also contributed clothes, toys and $2-million (U.S.) in food to undocumented immigrants on the U.S. southern border. But Beck's still an arch-conservative, so it's funny but tense as he and Bee warily eye each other and trade a few insults. Then he asks why she invited him on her show. "I think our future is going to require a broad coalition of non-partisan decency. It's not just individual people against Donald Trump. It's all of us against Trumpism," Bee says.

"I agree," Beck says.

Later, I ask Bee how having Beck on her show is different from Jimmy Fallon messing up Trump's hair on his show during the election campaign - which Full Frontal attacked as the endorsement of a "race-baiting demagogue."

"I absolutely think there's a difference," she says. "Glenn Beck has something to say. He's apologetic for the damage he did. He's putting goodness back in the world."

The idea first came up, she says, when they thought Clinton would win. "I'm not even kidding. And because we're such amazing people, we wanted to make this magnanimous gesture to the 'losing' side, reach across the aisle and find a way to heal the country."

After the election, they decided to pursue Beck anyway. "I think it was us kind of desperately reaching out to someone we thought we might have a similarity with. He owns the role that he played in dividing the country, in a way that is so refreshing and that I really respected. He's done more for humanity at this point than I have ever done, so I take a lesson from that."

Samantha Bee is not going to save the world. It's the kind of silly proposition one uses to frame an article such as this, while trying to figure out what exactly she is doing.

Which now seems obvious: She's making a comedy show with a strong point of view that suggests we save ourselves. Get involved in local politics. Start building bridges with unlikely one-on-one connections. Stop seeing aggressive, opinionated women as a contradiction in terms.

As I leave the building, Bee walks out with me, and we chat about non-late-night stuff. She and Jones have another show on TBS, a half-hour sitcom called The Detour (season two returns on the Comedy Network in February), which Jones also stars in, and is the kind of show Bee would be happy to go to if the late-night thing blows up.

As she walks down West 57th, unrecognizable inside a giant down parka, she talks about keeping things in perspective. "I don't take all of it too seriously, maybe because I'm Canadian," she says. "I have a life outside of this. I have my kids. I was a waiter before. I can go back to it."

Associated Graphic

ERIC RAY DAVIDSON

By using language traditionally meant to demean and intimidate women, Samantha Bee is co-opting and neutralizing its power.

ERIC RAY DAVIDSON

SCALIA, BEFORE THE COURT
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As Donald Trump mulls a Supreme Court successor to the conservative firebrand, Sean Fine examines how a young, decidedly evenhanded Antonin Scalia once helped the Canadian government get a grip on domestic spy services that had begun to spin out of control
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By SEAN FINE
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Saturday, January 14, 2017 – Print Edition, Page F1


He was the most outspoken conservative judge of his era. And Antonin Scalia's death last February at age 79 kicked off an epic battle for the soul of the United States Supreme Court, on which he'd served for 30 years. Now the Republicans, after blocking President Barack Obama's bid to choose a judicially moderate successor, will reap the benefits of their stonewalling, because soon-to-be president Donald Trump is free to search for a judge exactly like Mr. Scalia. As if he could ever find one.

But before the inimitable Antonin Scalia joined the Supreme Court, he was a law professor with a wife and eight children, soon to be nine. And then Canada came calling, with a freelance job: consultant to a royal commission aimed at revamping nationalsecurity agencies.

It was the 1970s - a time when this country was reeling from revelations about out-of-control spy services. The RCMP had burned down a barn in Quebec to prevent a meeting between Quebec separatists and U.S. radicals, broken into journalists' offices, infiltrated legitimate protest groups, stolen political-party membership lists.

In 1977, the Pierre Trudeau government had set up the Royal Commission into Certain Activities of the RCMP, to be led by Justice David McDonald of Alberta. The commission offered Mr. Scalia a contract to write a report describing how the United States had confronted the notorious excesses of its own intelligence agencies, including the attempt a decade earlier to push civil-rights leader Martin Luther King Jr. to take his own life by sending him a threatening letter and an audiotape of extramarital sexual activities.

And Mr. Scalia, then in his early 40s, accepted - for the respectable, but not princely, sum of $7,500 U.S. (then worth $8,750 Canadian), based on 30 days' work at $250 a day. The job wound up being much more onerous than he had expected: He was more than a year late delivering his report, though still in plenty of time to be useful.

The report's scrupulously impartial (for the most part) author was not the larger-than-life figure he would one day become: a man obsessed with his own fame, and prone to scandalizing the court with his ridicule of its liberal members. ("What really astounds," he wrote, dissenting from the 5-to-4 ruling legalizing gay marriage two years ago, "is the hubris reflected in today's judicial Putsch.") Here was the dispassionate, sober jurist of unmistakable power - the one who might have been. That's the view of one of his biographers, Bruce Allen Murphy, a law professor at Lafayette College in Pennsylvania, who read the report at The Globe and Mail's request.

"Historians will look back and say, 'He was as brilliant as anybody who has ever served on the Supreme Court - William O. Douglas, Oliver Wendell Holmes, John Marshall.' Of the 112 justices, we're only talking about a handful of people who were really, really smart. But the way he did his job late in his career probably will diminish his legacy. He could have achieved so much more. Had he done his job the way he did that report for the commission, his legacy, I think, would be entirely different."

The story of Mr. Scalia's report to Canada at a pivotal time in its security-intelligence history has never been told. "Scalia's gift to Canada," is how Peter Russell, the research director who hired him, characterizes the report today. The Globe obtained the 200-pluspage document (which included 100 pages of detailed footnotes and appendixes) by making a request under the federal access-toinformation law to the National Library and Archives. Why the work remained secret, and was kept in a sealed area of the National Library and Archives all these years, remains unclear.

Its influence, though difficult to pin down, exceeded anything that could have been envisioned when Mr. Scalia took on the assignment: So impressed were the Canadians who read it that it wound up in the hands of a renowned deputy attorneygeneral at the Canadian Justice Department, Roger Tassé, who was helping at that very moment to draft the Charter of Rights and Freedoms, which would take effect in 1982.

Ironically, the man hired by the committee whose job was to clean up Canadian security services would, years later, express support for torture in some circumstances. A provocateur with his finger on the pulse of his times, Mr. Scalia used an often brutal, terrorist-fighting secret agent from the TV show 24 to make the point: "Jack Bauer saved Los Angeles," he said in a speech in Ottawa in 2007. "He saved hundreds of thousands of lives. Are you going to convict Jack Bauer? ... Is any jury going to convict Jack Bauer?" But no pro-torture viewpoint is visible in his neutrally titled report, United States Intelligence Law. Its theme: Countries need powerful state investigative resources to protect security, but they also need to keep those powers in check and to protect personal privacy.

A hefty price tag for hands-on experience The 1960s and seventies were a time when security services in both Canada and the United States were widely criticized for dirty tricks applied to people those services deemed "subversive." Even Prof. Russell, now 84, had attracted the attention of the country's spies as a politicalscience professor at the University of Toronto. "If you weren't on the security service's list of possible subversives - certainly I was - what the hell were you doing with your life?" he jokes now. When he needed a topsecurity clearance to work with the commission, the RCMP investigation went down a blind alley typical of the time. "One of my friends called me afterward and said, 'They asked me if I knew if Russell had any strange sexual habits.' " For the McDonald Commission, learning from the U.S. experience was critical. "Here's the one Western democracy that has a constitutional bill of rights - which its courts take very seriously," Prof. Russell recalled.

"How do they draw the line?

How do they balance freedom and security?" Networking led the commission to Mr. Scalia. John Edwards, a University of Toronto law professor who was serving as special research adviser to the McDonald Commission, asked for recommendations from former U.S. attorney-general Edward Levi and top U.S. legal scholar Herbert Wechsler, both of whom he knew personally. Both named Mr. Scalia as their first choice.

Prof. Russell went on to become an éminence grise among political scientists in Canada, a professor emeritus at the U of T, and a leading analyst of our own Supreme Court. The man who hired Mr. Scalia for the commission would also later be appalled by the justice's support of originalism - a judicial philosophy in which constitutional rights do not evolve over time, but stay rooted in the vision of the Founding Fathers of the United States. "Originalism is absolute nonsense," Prof. Russell says. "It's part of the idea that there is a correct and authentic way to read the bible. The U.S. Constitution has biblical importance and value. You know what bibles are like. They know what the word of God is. That's what Scalia's originalism fostered: that kind of biblical debate."

By the McDonald Commission's standards, Mr. Scalia's expertise came at a hefty price; his report cost more than similar reports from experts in Australia and New Zealand. "Much more than we paid for our Commonwealth reports," Prof. Russell acknowledged in a note to the commissioners, "but then the U.S. experience is more complex, and the U.S. market for academic legal services is much pricier."

Mr. Scalia had more experience of deep intelligence matters than Prof. Russell knew about at the time. Richard Nixon had hired him as his legal adviser in the last days of his administration, and he stayed on as assistant attorney-general when Gerald Ford succeeded Mr. Nixon as president in 1974. At that time, the CIA, under an onslaught of media exposés about its dirty tricks (such as the 1960 plan to poison Congolese leader Patrice Lumumba, or the massive, illegal surveillance of U.S citizens), agreed that any covert operations abroad - the so-called "black-ops" - should be approved by the justice department. The task fell to Mr. Scalia; before he became a University of Chicago law professor, he had been attorney-general Edward Levi's trusted adviser.

"So, believe it or not, for a brief period of time, all covert actions had to be approved by me," he said in his 2007 Ottawa speech.

"Needless to say, I did not feel that this was an area in which I possessed a whole lot of expertise."

Clearly, though, he developed some; in correspondence with Prof. Russell as he started the work, he asked if Canada would be interested in how the U.S. government maintained oversight of covert offensive or disruptive actions abroad. Prof.

Russell thought the U.S. experience was too different from Canada's to be of much use.

However, he believes Mr. Scalia's hands-on experience dealing with intelligence matters served Canada well. "If you read his report carefully, he knows in the real world what these agencies get up to - the bad things they get up to and the acceptable things they get up to - and it's important to have that kind of realism."

A densely argued report, graded 'A-plus' Mr. Scalia began his report by dampening expectations. "It is impossible, in a paper of the size here contemplated, to do justice to the entire subject of intelligence activities by the United States government." He then mentions "the areas that will be slighted," including the documenting of the many abuses of power by security agencies that were already well-known from the "popular press"; if the commission wanted to know more, he said "it is exhaustively (and perhaps somewhat exaggeratedly) set forth" in a 1975 review by a Senate committee (the Church report, named for Sen. Frank Church).

He then set out the difficulties inherent in his "modest subject": U.S. intelligence law "is an amalgam of constitutional restrictions, developed in a case-by-case fashion by the courts; legislative prescriptions of unusually vague and ambiguous character; and administrative directives, many of which are not publicly known." And the laws were at that moment undergoing massive change.

The paper was densely argued and by no means an easy read. It covered everything from the opening of mail to the infiltration of organizations by informants, from the supervision of security services by government to the role of judges in granting warrants.

"He wrote it almost as if he was writing a judicial decision," Mr. Russell said, after The Globe sent him a copy to refresh his memory of it. "Did you notice the precision of his way of handling very complex legal issues?

Quite impressive. I didn't know he was going to be a judge at the time - but I might have guessed."

"I think he opened our eyes to a lot of issues we needed to pay attention to," Don Rickerd, who served as a commissioner, said in an interview. "I don't think we could have found a better person to do an analysis of the American situation than Scalia."

The commission's other surviving member, Guy Gilbert, also gave a rave review. "The Scalia report is A-plus for me, except for the fact that it came late," he said in an interview. (The tardiness was an irritant; Prof. Russell, in a memo in January, 1979, told the commissioners he was "very disappointed" that Mr. Scalia "has failed to meet all previous deadlines," and that Mr. Scalia "now informs me" the remainder of the report would be ready at the end of the month.

When it finally arrived in the middle of summer, Prof. Russell wrote to Mr.Scalia: "You should not feel badly about the delay.") Occasionally, Mr. Scalia's characteristic wit makes itself known - though much more subtly than in his often withering Supreme Court judgments. For instance, explaining why legal constraints on intelligence agents are necessary, he writes: "But even if (as is hoped) these individuals are of an integrity well above the run of mankind, they are not entirely lacking in human frailty; and the work they pursue involves special temptations to an abuse of power, or even to a mere excess of righteous zeal." In his 2007 speech, he was more the suspicious-of-too-many-legal-protections conservative: "I think we must beware of overlawyering the national security and intelligence process. To subject these actions to rules is one thing, but to subject them to prior lawyer or judicial approval is something else. These areas often require prompt and bold action. ... The army that hits the beaches with a cadre of legal advisers is asking for trouble.") On why he supported, in the McDonald Commission report, the warrantless break-ins known as "black-bag jobs" (which Canadians called "rummaging around," according to Prof. Russell): "It is surely absurd to think of being able to bug Col. Abel's room - and even to enter the room for the purpose of implanting the bug - but not being able to slip in and copy his codebook." (Rudolf Abel was a Soviet spy arrested in New York in a famous 1957 episode.) Mr. Scalia liked the line so much that he used it again in his Ottawa speech more than a quarter-century later.

On CoIntelPro, the FBI's counterintelligence program that dogged Dr. King, among others: "Nothing prevents a private citizen from systematically disseminating derogatory, but true, information about a prominent political figure; but the same activity by the government would raise serious constitutional problems. The vice of the shocking CoIntelPro operation, therefore, consists not entirely (though it may in part) of the mere character of the activities conducted, but rather of the purposes for which they were employed."

Prof. Murphy said he found the report fascinating to read.

"It's like a time capsule.

Because Scalia is now out of government [at the time]. He thinks he's going to get back into government, but he doesn't know for sure. He no doubt thinks he will get into the judiciary, but at that moment he's a law professor who has seen a lot of these issues. He's also watching in the news the CIA, the FBI and all of our defence agencies, investigation agencies, be ripped apart by the post-Watergate Church committee and Rockefeller committee investigations [into intelligence activities]. Scalia is able to get beyond that and give a very clear and high-level intellectual discussion of the issues. But the way he's choosing his issues and hypotheticals, you can see he's personally aggrieved by what has happened ... that the worst possible disaster that could have happened to the people that he respects in the intelligence community [has happened] - that all their secrets are now being revealed on a monthly basis in magazines and newspapers. This is what can happen if you do this badly."

Prof. Murphy said he was deeply impressed by Mr. Scalia's approach. "He's creating a book, he's creating a course that will educate the commissioners as to what the issues are for them to decide."

And educate them he did. The McDonald Commission took aim at the Canadian government's failure to supervise the RCMP while the force committed illegal or improper acts: "The supposed political masters of the Service were ignorant of its misdeeds," analyst Philip Rosen wrote in a report for the Library of Parliament in 2000, summarizing the McDonald Commission findings.

"But this exoneration was also an inherent criticism, in that the structure of control and accountability was so weak as to allow these things to happen." The report recommended an end to spying on legal protest and dissent, but it gave the thumbs-up to the spy techniques discussed so ably by Mr. Scalia: electronic surveillance, surreptitious entry, and mail-opening. As long as the spies received a judicial warrant first.

Prof. Russell says that what the commission learned from Mr. Scalia's report is that a country with a bill of rights puts limits on its secret services "but it doesn't snuff them out. It tries to strike a balance. While that's obvious now, in those pre-Charter years that wasn't so obvious.

There were not real limits in Canada on our spooks, our collectors of covert intelligence. We learned that in the U.S., there are real limits. Some critics would say not strong enough limits, but there were certainly limits and they had to observe them. That was quite a revelation for most of the people involved with the royal commission."

Sean Fine is The Globe and Mail's justice writer.

Associated Graphic

Mr. Scalia's report to the Royal Commission into Certain Activities of the RCMP outlined and analyzed the U.S. experience in confronting the excesses of its own intelligence agencies, including an attempt to push Martin Luther King Jr. to take his own life.

PHOTO COURTESY UNIVERSITY OF CHICAGO/ PHOTO ILLUSTRATION BY THE GLOBE AND MAIL

Antonin Scalia's cover letter for the first part of his report to the McDonald Commission in August, 1978, in which he professes embarrassment that he hasn't met his deadline; the letter would go on to outline the work Mr. Scalia had yet to complete. Right: a 1979 memo to the commission, in which research director Peter Russell outlines Mr. Scalia's work on the nitty-gritty of investigative techniques.

Above, Prof. Russell, now 84, says that what the McDonald Commission learned from Mr. Scalia's report is that a country with a bill of rights puts limits on its secret services 'but it doesn't snuff them out. It tries to strike a balance. While that's obvious now, in those pre-Charter years that wasn't so obvious.'

FRED LUM/THE GLOBE AND MAIL

ONTARIO POWER PLAY
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Ontarians pay steeper rates for their power than any other province as a result of a decade's worth of policy choices. Adrian Morro ow and Tom Cardoso address the key questions about how we got here and what the province could do to fix it
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By ADRIAN MORROW, TOM CARDOSO
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Monday, January 9, 2017 – Print Edition, Page A8


Electricity prices in Ontario have soared in the past decade. Since 2006, the top rate for power has risen four times as fast as inflation.

The problem has aggravated voters, piled on costs for business - particularly factories and other industrial enterprises - and remained one of the most persistent hot buttons for the province's politicians.

Facing record-low approval ratings, Premier Kathleen Wynne last September announced an 8-per-cent subsidy for residential and small-business bills, which took effect Jan. 1.

How did we get here?

How high are electricity prices exactly? How does Ontario compare with other jurisdictions? And what can we do to drive rates down?

The short answer is that a series of policy decisions - most significantly, upgrading infrastructure and signing fixed 20-year deals with private companies to produce electricity - have increased prices over the past decade.

It hasn't helped the government that a series of controversial decisions, such as cancelling two gas-fired power plants for political reasons and privatizing Hydro One, have intersected with electricity policy and attracted blame for the high prices. While the cancellation of the plants has driven up rates, it's a relatively small part of the overall increase; the Hydro One privatization, meanwhile, has not yet had an effect.

Ontario's electricity prices are far higher than those in the rest of the country.

Quebec, for example, enjoys rates less than half of those in Ontario. The international picture is more complicated. Ontario rates are generally significantly lower than those across the border in New York and about half what Germans, Danes or Italians pay.

The bad news, for consumers and the government, is that rates likely will not be coming down any time soon.

How high are electricity prices exactly?

In November, 2006, when the Ontario Energy Board set the first new rates after a four-year freeze, off-peak electricity cost 3.5 cents a kilowatt hour, mid-peak power cost 7.5 cents a kilowatt hour and on-peak, when juice is most in demand, was 10.5 cents a kilowatt hour. The current rates, set in November, 2016, are 8.7 cents, 13.2 cents and 18 cents.

That means the price of off-peak power has rocketed up 149 per cent over a decade, mid-peak power has shot up 76 per cent and on-peak is up 71 per cent. By way of comparison, inflation in Ontario over the same period was about 18 per cent.

Where does Ontario's power come from?

Despite the colloquial use of the term "hydro" as a synonym for electricity in Ontario, the province actually uses a mix of sources - not just hydroelectric dams - to get its power.

By far, the largest source of electricity in Ontario is nuclear, accounting for about 60 per cent of the electricity produced in 2015. The province has three nuclear plants: the government-run Darlington and Pickering nuclear generating stations, east of Toronto, and the Bruce Nuclear Generating Station, on Lake Huron, which is run by the private company Bruce Power. The second-largest source is hydroelectricity, which accounted for 24 per cent of generation in 2015, followed by natural-gas plants (10 per cent) and wind power (6 per cent). Biofuel (which essentially means burning wood pellets) and solar power each provided less than 1 per cent of the province's power supply.

Generally speaking, the power supply can be divided between "baseload" and "peaking" power.

The baseload generation is typically running all the time to provide a steady supply that the province always needs. Peaking power is only switched on when needed. This difference is what accounts for the gap between installed capacity and actual production. For example, nuclear power (which is part of the baseload) accounts for just 36 per cent of the province's installed capacity (i.e., the province's total generating power) but actually produces 60 per cent of the supply. Natural gas, which is mostly used for peaking, accounts for 28 per cent of installed capacity but produces just 10 per cent of the supply.

How is the system organized? Who sets the rates?

Ontario's electricity system is a tangle of public, private and semi-private companies. Roughly speaking, you can break it into three major components: generation (producing the power), transmission (getting the power across the province through high-voltage lines) and distribution (piping the power into homes and businesses.)

Generation includes more than 200 power plants ranging from the massive Bruce Nuclear Generating Station - an eight-reactor station that pumps out almost a third of the province's power supply - to tiny solar operations consisting of a few panels. Some generation is handled by government-owned Ontario Power Generation, which runs the Darlington and Pickering nuclear power plants and a slew of hydroelectric facilities. Other generation is done by private companies, including most of the province's gas plants and wind farms. The Bruce plant is also private, run by Bruce Power, a company co-owned by TransCanada Corp., a municipal employees' pension plan and two unions.

Transmission is primarily handled by Hydro One, a government company that is in the process of being privatized. Hydro One's job is to take the power from the various plants and get it to where it's needed. In 2015, Ms.

Wynne unveiled a plan to sell 60 per cent of Hydro One in a bid to raise $4-billion to fund her transit plans and $5-billion to pay down debt. So far, the government has sold 30 per cent of the company on the stock market.

In some places, Hydro One handles distribution itself. In others, this task is done by a local utility, such as Toronto Hydro, Horizon Utilities or Hydro Ottawa. Utilities are typically owned by municipal governments, but sometimes have private shareholders as well.

The entire system is overseen by the Independent Electricity System Operator, a government agency that roughly acts as the co-ordinating body to make sure enough power is getting produced and shipped around to meet demand.

The Ontario Energy Board sets rates for electricity twice a year, based on submissions from the various companies and agencies.

The province's Ministry of Energy, meanwhile, makes big-picture decisions about the system and sets overall policy.

What about Ontario Hydro? Isn't that still a thing?

For much of the 20th century, most of the province's electricity generation and transmission were overseen by a single government agency with the snappy name of Hydro-Electric Power Commission of Ontario (better known by its 1970s rebranding as Ontario Hydro). In 1999, the Progressive Conservative government of Mike Harris broke Ontario Hydro into Ontario Power Generation, Hydro One and various other agencies as part of a plan to privatize most of the system. The Tories eventually abandoned their privatization plan, but the new structure remained.

Why is electricity so expensive?

Today's high prices are largely the result of provincial policy decisions made during the 2000s.

When the Ontario Liberal Party came to power in 2003, the province's electricity grid was aging and creaky, and Ontario had to import power to meet its needs. The province was also haunted by the memory of Ontario Hydro's disastrously overbudget nuclear construction projects in the 1980s and 90s. What's more, the Liberals had been elected in part on a promise to close down the province's coal-fired power plants.

So the government went on a building spree, upgrading aging infrastructure and commissioning new natural gas, wind and solar plants to replace the coal plants.

But, wary of the previous cost overruns at Ontario Hydro, the government decided to outsource the work of building and running the new power plants to the private sector. The private sector would be responsible for cost overruns and other construction problems in exchange for 20-year contracts from the province. The contracts essentially guaranteed that the companies would receive a certain amount of revenue - no matter how much electricity their plants produced (though they would be paid more if the province used their electricity).

The first major wave of private power plants was fuelled with natural gas. Later plants were tied to the Green Energy Act, which provided lucrative terms for wind and solar plants in a bid to build a renewable-power industry in the province. One of the most famous deals was a sole-source contract with a Samsung-led consortium, which included locating factories building green-energy equipment in the province.

The cost of all this is passed on to ratepayers in the form of higher electricity bills. Auditor-General Bonnie Lysyk estimates that the "global adjustment charge" - the government's term for the costs in the system above the market rate for electricity - accounts for some 70 per cent of the average electricity bill.

Ultimately, the province built more plants than it actually needed. In 2014, according to the Auditor-General, Ontario had the capacity to produce 30,203 megawatts of power - but only needed 15,959 on an average day. (Even on the busiest day of the year, the province only required 22,774 megawatts.)

At the same time, demand for electricity in the province fell, partly because of the recession and the long-term upheaval in the manufacturing sector and partly because of government efforts to encourage Ontarians to conserve power.

So the province has a massive surplus of generating capacity, but because much of it is tied up in private, 20-year contracts, Ontarians have to pay for all that electricity - whether they need it or not.

In some cases, the province also made the situation worse with political meddling. Ahead of the 2011 election, for instance, then-premier Dalton McGuinty cancelled two unpopular natural-gas plants in Liberal-held ridings in Toronto suburbs and gave the companies new contracts to build plants in other locations - farther from the areas that would need the electricity. As a result, ratepayers ended up on the hook for another $1.1-billion.

And Ontarians are still paying for the nuclear plants Ontario Hydro built in the eighties and nineties. When Ontario Hydro was broken up, its debt was hived off into an item called the "stranded debt," which is being paid down by electricity users.

In 2015, Ms. Lysyk calculated that Ontarians had paid $37billion more than market price for electricity from 2006 to 2014 and would pay another $133-billion extra by 2032.

Some of this cost was unavoidable: The province has to pay for fixed contracts that guarantee Ontarians have access to a steady supply of power. But there is no doubt, given the vast amount of surplus generating capacity, that the province has overpaid unnecessarily.

What about the privatization of Hydro One? Is that going to make electricity more expensive too?

The short answer: Maybe, but it's debatable.

The long answer: Hydro One hasn't been (semi-)privatized long enough to see what the effect on rates will be.

Opponents of privatization argue that it will ultimately drive up prices because a private company, eager to satisfy shareholders, will be more aggressive than a government agency when it comes to pressuring the Ontario Energy Board into granting rate increases. For example, they argue, a privatized Hydro One could be tempted to defer major infrastructure repairs (replacing aging transmission lines, for instance) in a bid to wring more money out of the company for shareholders, then offer to make the repairs in exchange for a rate increase. A government-owned agency would have a much harder time doing this because of the political backlash from angry consumers. Supporters of privatization, meanwhile, contend that private owners will be more motivated to push for efficiencies within the company, which could then be passed on to consumers.

Either scenario is possible, and it's hard to know which will play out until the company has been privatized for a few years.

In the short term, however, the privatization has become a political problem for the Liberals. Polls show the vast majority of Ontarians believe Hydro One should remain publicly owned, and Liberal insiders concede their opponents, particularly the NDP and the unions, have done an effective job of blaming the privatization for high hydro prices - even though there is currently no connection.

What will happen to prices over time?

Under the government's current projections, electricity prices will keep going up for the foreseeable future. The most recent projection, the 2013 Long-Term Energy Plan, estimated that the average monthly household bill would rise to $210 in 2032 from $138 in 2013 - a 52-per-cent increase. The province is in the middle of preparing the next Long-Term Energy Plan, which will contain an updated projection.

There are a few reasons (besides inflation) electricity prices won't likely be coming down any time soon. For one, there are all those long-term contracts; 20-year deals with private power companies add costs to the system.

What's more, the province's nuclear plants are being refurbished over the next 15 years, which will add longterm costs as well.

How does Ontario compare with other jurisdictions?

By Canadian standards, Ontario's electricity is ridiculously expensive.

By international standards, it's not so bad.

The province's two Canadian neighbours - Quebec and Manitoba - enjoy electricity prices that are about half what Ontario pays. The main reason: geography. Both Quebec and Manitoba have abundant hydroelectric power, which allows them to generate more than 98 per cent of their electricity from water (compared with 24 per cent in Ontario). This has allowed those provinces to (mostly) avoid both the costly and complicated process of building nuclear plants, which Ontario undertook from the 1960s to the 90s, and the phase-out of coal-fired powered plants that dominated the 2000s.

Other provinces also generally have cheaper electricity than Ontario for a variety of reasons. For one, no other province has ever undertaken a nuclear build on the scale Ontario has (New Brunswick is the only other province that uses nuclear power; Quebec once had a single, relatively small nuclear plant, which shut down in 2012).

Some other provinces, notably Alberta and Saskatchewan, get most of their electricity from coal-fired power plants (although Alberta is looking to replace coal with natural gas, wind and solar).

Internationally, however, Ontario's price situation looks a lot better. Electricity in New York is more expensive, despite a fairly similar supply mix - the state uses nuclear power, though somewhat less of it; natural gas, though somewhat more of it; and continues to burn coal. In Europe, prices are even higher, with France and Britain both paying more than Ontario; and in the case of Germany, Italy and Denmark, prices are double or more what they are in Ontario.

What is the government doing about it? What can be done?

In the past four years, Ms. Wynne's government has made several changes to the system in a bid to ease price increases.

The most significant was a decision in 2013 to stop building more nuclear reactors. The same year, the province also renegotiated the deal for wind and solar power from the consortium led by Samsung, which took $3.7billion in costs out of the system by scaling back the amount of electricity the consortium would produce.

The government has also taken smaller actions, including buying hydroelectric power from Quebec at a lower price than it would have cost to generate the same power from natural-gas plants, saving about $70-million over seven years.

Most recently, Ms. Wynne went for the quicker fix of slashing bills by 8 per cent with a taxpayer subsidy. But the subsidy is controversial. For one thing, because taxpayers and ratepayers largely overlap, it effectively asks most Ontarians to subsidize their own power bills - to the tune of about $1-billion a year; for another, it's regressive, as it disproportionately helps wealthier people with larger homes that use a lot of electricity.

There is relatively little the government can do to lower rates through more lasting, structural means, mostly because the Liberals have tied up so much of the system in 20-year contracts. Progressive Conservative Leader Patrick Brown, however, has promised to take a closer look at the deals to see if any can be renegotiated if and when he becomes premier.

Other possible solutions face problems of their own.

While some politicians, particularly in the NDP, advocate buying more hydroelectricity from Quebec instead of refurbishing the province's nuclear plants, doing so would require a lot of money to upgrade the transmission infrastructure.

What are the political ramifications here?

Electricity prices seem to have reached a tipping point in the public's consciousness over the past couple of years.

A poll last month by Nanos Research showed that, astonishingly, more voters named electricity as their top issue, unprompted, than any other public-policy concern - beating out perennial favourites health care, jobs and taxes.

The governing Liberals have trailed the opposition PCs in the polls for two years, and Ms. Wynne's approval rating has sunk to record lows (as far down as 13 per cent, according to one Forum poll). There may be multiple reasons for that - a string of ethics scandals certainly hasn't helped - but the Liberals themselves are convinced that electricity prices are killing them at the polls.

SOURCES:

Statistics Canada, Canadian Electricity Association, IESO, Office of the Auditor General of Ontario, Ontario Ministry of Energy, Ontario Energy Board, Nanos Research

A DELICATE BALANCE
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With the arrival of Donald Trump and his talk of tearing up the North American free-trade agreement and imposing border tariffs, everything has changed for Justin Trudeau. He must cajole the U.S. behemoth, while courting a rising, assertive China,as the two key trade partners for Canada jockey as rivals for global power.
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By CAMPBELL CLARK, NATHAN VANDERKLIPPE, MARK MACKINNON
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Saturday, January 14, 2017 – Print Edition, Page A10


OTTAWA, BEIJING, LONDON -- By the end of last October, Justin Trudeau could smile at the world. One big part of his foreignpolicy platform was rekindling the big relationships that mattered to Canada's economy: with the United States and Mexico, and with China.

He had turned Stephen Harper's chilly relationship with Barack Obama into bromance. Mr. Trudeau buried Mexico's seven-yearold visa grievance when he met President Enrique Pena Nieto at a Three Amigos summit in Ottawa.

He was received with a warm welcome in China, and agreed to exploratory talks on free trade.

And on Oct. 30, after a late psychodrama of Wallonian reluctance, he signed a free-trade agreement with the European Union.

A week later, Mr. Trudeau was walloped with a blast of uncertainty named Donald Trump.

There can be little doubt now that Mr. Trump's arrival has rocked Mr. Trudeau's approach to the world. On Tuesday, the Prime Minister reshaped his cabinet to deal with it: Stéphane Dion was replaced as foreign affairs minister by Chrystia Freeland, who moves from the trade portfolio.

But in a sense, Ms. Freeland is now the uber-trade-minister.

Trade and jobs are the centre of Mr. Trudeau's foreign policy, because they are the centre of Mr. Trump's.

"One of the things that we've seen from president-elect Trump is that he very much takes a trade and job lens to his engagements with the world in international diplomacy," Mr. Trudeau told reporters after the shuffle.

Suddenly, it's a new world.

There are new priorities. There's Mr. Trump's America-first talk of tearing up the North American free-trade agreement and imposing steep border tariffs, and the devastating impact that could potentially have on Canada's economy. Nothing is bigger for a Canadian prime minister.

But Mr. Trudeau's shuffle also signalled another priority, in the world's second-largest economy, China, by moving his immigration minister, John McCallum, to be ambassador in Beijing, with a direct line to the Prime Minister's Office. That's doubly important amid fears of a protectionist United States. But it won't be as simple as sending a political appointee to draft a free-trade agreement. Mr. Trudeau's team has seen China's leaders can be tough. And with Mr. Trump sparking new U.S. tensions with China, it could hard to please one without offending the other.

Things have changed. Liberal foreign policy has stressed multilateralism and re-engaging with the world, from Africa to Iran to Russia. Now, Canada's economic interests mean Mr. Trudeau's foreign policy must deal, first and foremost, with a G2 world of Donald Trump's America and a rising, assertive China. It's cajoling Mr. Trump's U.S. behemoth, but also courting a prickly Asian power, while both jockey as rivals. Mr. Trudeau's foreign-policy imperative is navigating between a rock and a hard place.

The arrival of Mr. Trump is immediate and all-consuming.

Mr. Trudeau's team has reached out to business leaders and across party lines for help, and got it from Derek Burney, a former Canadian ambassador to the United States and chief of staff to Conservative prime minister Brian Mulroney, and especially Mr. Mulroney himself. Mr. Mulroney has personal contacts with Mr.

Trump, and a friendship with his incoming secretary of commerce, Wilbur Ross, and has given advice both to the PMO and Canada's ambassador in Washington, David MacNaughton. Mr. Trudeau's entourage wants it to be an allhands operation. The stakes are high.

On Jan. 3, Mr. MacNaughton and Mr. Trudeau's two senior aides, Katie Telford and Gerald Butts, went to the 666 Fifth Ave. offices of Mr. Trump's son-in-law, Jared Kushner, for more than five hours of talks with him and Mr. Trump's strategic adviser, Stephen Bannon. They came away thinking that that Mr. Trump's campaign rhetoric about China's unfair trade practices and how trade agreements such as NAFTA had taken jobs was no bluster. It's the Trump administration's starting point.

Mr. Trudeau's key advisers decided there's no point passing judgment; it had to be dealt with pragmatically to protect Canadian interests. "Our goal isn't to save world trade," one aide said.

Just what Mr. Trump's trade rhetoric means - and what it means to Canada - isn't so clear, however. Mr. Trump tweeted warnings to companies, such as General Motors that if they moved a plant to Mexico and tried to sell the vehicles back into the United States, they would face a big border tax. But is that only for companies that move factories? For all plants in Mexico or China? Or for all goods entering the United States - such as vehicles from a Ford plant in Ontario?

Mr. Trump's advisers have focused on countries with whom the United States has a major trade deficit. Economist Peter Navarro, head of Mr. Trump's new trade council, wrote a book called Death By China. Mr. Trump has railed about Mexico. Neither mentioned Canada. Do NAFTA complaints about Mexico leave Canada out?

"We shouldn't see ourselves as a northern Mexico. Because we're not," Mr. Burney said in an interview. "I don't see a lot of American companies flooding into Canada the way they are into Mexico and China."

Ottawa has to work to ensure the Trump administration doesn't see Canada that way, and must talk to the 33 states for whom Canada is the biggest export customer, Mr. Burney said.

And it has to avoid sanctimony.

"They elected him. We didn't," Mr. Burney said. "We have to deal with them. We have to make the most of it."

That means signalling co-operation, and quickly preparing "an agenda of common interests" in areas such as infrastructure, trade, and security.

Much of Mr. Burney's prescription is part of the Trudeau government's strategy. In public, Mr. MacNaughton has spoken about Canada's willingness to talk about NAFTA. In private, with Mr. Bannon and Mr. Kushner, they talked about Canada being a top customer for U.S. states. They apparently surprised Mr. Trump's team when they noted the United States has a trade surplus with Canada, not a deficit as with Mexico. They came away thinking Mr. Trump's advisers grasped the importance of the intertwined Canada-U.S. auto business.

But there is still enormous potential for Canadian trade to be sideswiped by measures, such as border taxes, aimed elsewhere.

Even if Mr. Trump's administration is willing to make a Canadian exception, it's difficult to craft an arrangement that would hit Mexico, a NAFTA partner, without affecting Canada.

Developing a common agenda, as Mr. Burney suggests, is key to Ottawa's approach. Infrastructure is one area: Mr. Ross and Mr.

Navarro, two key trade players on Mr. Trump's team, wrote a paper last year on the need for major infrastructure investments to drive the economy, which in some ways echoed Mr. Trudeau's central campaign theme. And despite the apparent ideological gulf, Mr.

Trump's team is said to see some similarity in campaign themes - the notion that the middle class is getting screwed.

"For our government, the most important question is the middle class and working for the middle class," new Foreign Affairs Minister Chrystia Freeland said after she was appointed Tuesday. "I think president-elect Donald Trump also spoke of Americans for whom the economy wasn't working."

Ms. Freeland, it's worth noting, also called that the "central argument" of her 2012 book, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. It's an irony that Ms. Freeland's ability to walk in the billionaires' world, one she covered for years as a journalist, is one of the reasons she was made Foreign Affairs Minister. Mr. Trump has named CEOs and tycoons to his team; Ms. Freeland, according to a Liberal government figure, has deep contacts in that world, to people such as Blackstone Group CEO Stephen Schwarzman, chair of Mr. Trump's Strategic and Policy Forum.

Ms. Freeland's new mandate is far more and varied than her trade portfolio, but Mr. Trump's America is at the top. She is seen as a more sophisticated deal-maker than Mr. Dion, and credited with closing the Canada-European Union trade deal, initiated by Mr. Harper.

"I think what she really did was she brought the centre-left on board in Europe," said Jason Langrish, executive director of the Canada Europe Roundtable for Business. Left-leaning parties in Germany and elsewhere felt qualms with an agreement seen as a stalking horse for a bigger trade deal with the United States.

"She helped sort of push their opposition to trade aside and make them understand that this was an agreement between Canada and Europe, two progressive entities," Mr. Langrish said. "She was good at taking that embedded discomfort with trade and minimizing that, and maximizing what Canada and Europe had in common to this key constituency."

Now, it's Ms. Freeland's overriding task to leverage common ground - security ties, infrastructure, middle-class politics - to influence the Trump administration.

It's clearly not her only task. The Foreign Affairs Minister can't ignore global hot spots such as Syria or neglect the campaign for a United Nations Security Council seat. But priorities have changed.

Mr. Trudeau planned to renew Canadian multilateralism, and re-establish diplomatic channels with countries frozen out by Mr. Harper, such as Iran or Russia. Ms. Freeland's appointment demonstrates a reset with Russia isn't top priority.

She remains barred from Russia under tit-for-tat sanctions imposed after Russia's annexation of Crimea in 2014, when Ms. Freeland was an opposition MP.

She was apparently singled by Moscow for her Ukrainian heritage and ties, and her 2014 appearance in central Kiev to applaud the country's pro-Western revolution. Her appointment this week was hailed in a headline on Ukraine's state-run Ukrinform website: "Our woman in the Canadian government."

She has also been an ardent critic of Russian President Vladimir Putin. She spent four years in Russia as a Financial Times correspondent, and has called Mr. Putin "dangerous" and a kleptocrat.

Diplomats on both sides of the Canada-Russia relationship say Mr. Dion was the main proponent of re-engagement efforts, while Ms. Freeland, in her trade portfolio, resisted.

The Russia impact may be overblown. Old Russia hands say they expect Russia to see her appointment as an inconvenience, not a deliberate signal. But her appointment still shows Canada's big economic relationships matter more.

It is not only about Donald Trump's America. The presidentelect's potential threat to the exports to the United States that equalled 16.4 per cent of GDP in 2015 has raised the importance of trade ties elsewhere. Mr. Trudeau's cabinet shuffle symbolized that, too.

The Prime Minister had hoped to announce Mr. Dion would take a major ambassador's post in Europe, a symbol of the desire to reap the fruits of the EU free-trade deal.

The appointment of John McCallum, a sitting immigration minister, as ambassador to Beijing, was an even bigger signal - it ranks the Canada-China relationship as important. Mr. Trudeau's predecessor, Mr. Harper, had tried to recruit a high-profile political appointee, offering the post to former trade minister David Emerson. When Mr. Trudeau appointed a close associate, Mr. MacNaughton, to Washington, Chinese ambassador Luo Zhaohui told Mr. Trudeau's principal secretary, Gerald Butts, that China now expected the same thing. With Mr. McCallum, China has it.

Ms. Freeland's appointment also puts a China-trade enthusiast in charge of diplomacy. Mr. Dion, who doesn't easily bend principle or cede to group plans, was wary.

"Dion understood that the Chinese were tough, that the humanrights situation was very difficult, that they were always operating with their own interests in mind," said one person privy to some of the debate. "I think the Prime Minister also understands that, but he feels that it's possible to have a good relationship and that there will be ways to raise our concerns and also promote our interests."

There's also a feeling that it's economic necessity.

Trade with China won't quickly replace trade with the United States if something dramatic happens there, said Dominic Barton, the Asia-business guru who is managing director of global consulting giant McKinsey & Co. But Mr. Barton, a Canadian who heads the Trudeau government's advisory council on economic growth - and was first choice for the Beijing ambassador's job - argues the potential can't be ignored.

"These are the two biggest economies of the world. We've got to get deep in there," he said. "So we need both."

"Given how their economy is transforming into much more of a consumption and investmentdriven economy, the rapidlygrowing middle-class, and the size of it - those trends are just completely in our favour, or our interest," he said.

But sending Mr. McCallum to Beijing won't suddenly open all doors in Beijing. Access to top Chinese leaders is scarce even for well-connected envoys.

The Chinese want a free-trade deal with Canada, but until September, just before the visit of Premier Li Keqiang, they refused to discuss four key areas - environment, labour standards, stateowned enterprises or procurement. Exploratory talks might indicate if the Chinese will really give, and allow safeguards. Australia struck a free-trade agreement that eliminated coal tariffs - but Australian coal producers complained Beijing then adopted new environment and quality regulations that hurt sales.

Mr. Trudeau's team has already seen Chinese officials can be hard-nosed - one source said they grasped that when Chinese foreign minister Wang Yi visited Ottawa and berated a Canadian reporter for "arrogance" when she asked about China's jailing of Canadian missionary Kevin Garratt.

When Mr. Trudeau went to China in late August, Beijing touted a new "golden era" in CanadaChina relations. But the Chinese were also surprised Mr. Trudeau insisted Mr. Garratt's case was critical; they didn't expect a golden era to come with such irritation or criticism. One veteran China hand said the warming will be refrozen if a high-profile human-rights case forces Mr. Trudeau to criticize Beijing.

That's probably especially true in 2017. Chinese president Xi Jinping is seeking to consolidate control as most of the standing committee of the Politburo is slated to be replaced. He's likely to deepen the crackdown on criticism. And he'll want to look tough when confronted from abroad.

That seems likely to fuel tensions between China and the United States, which are already crackling because Mr. Trump questioned the United States' one-China policy, warned of its expansionism, and threatened trade measures.

Uncertainty over Mr. Trump's agenda will drive Chinese attention to other parts of the world - and Canada might benefit if it is willing to swallow criticisms. But Beijing will also increasingly demand to be treated with the deference once reserved for Washington. Warming ties with China could prove prickly in Washington. Will the Americans object to Canada-China trade talks? Will Canada send frigates to U.S. naval exercises in the South China Sea?

China has already begun to sketch its response to Mr. Trump, which involves placating, skirting and directly challenging the United States and its incoming leader.

Placating may be simplest: This week, Chinese e-commerce billionaire Jack Ma flew to New York to meet with Mr. Trump, promising his powerful Alibaba companies would support a million U.S. jobs over the next half-decade.

China-watchers saw it as an olive branch from Beijing. "What did I say about China finding a way to bribe [Trump]? This is the start," Anne Stevenson-Yang, a prominent China researcher, wrote on Twitter. And China has accelerated its bid to skirt and challenge Washington, an ambitious effort to elevate itself at U.S. expense.

Next week, Mr. Xi will become the first Chinese president to attend the World Economic Forum at Davos, to cast himself as globalization's new champion.

China's aspiration to seize that title from the United States is both defensive - to protects its own gains from global trade - and opportunistic.

In Mr. Trump's isolationist rhetoric, China has spied a chance to leap ahead. China's UN ambassador, Ma Zhaoxu, billed Mr. Xi's trip to Switzerland, where he'll also meet leaders of the United Nations, World Health Organization and International Olympic Committee, as a chance to show China as "one of the leaders of the international community."

"The world today is at a turning point in history," Mr. Ma told state media.

It might seem that way in Mr. Trudeau's world, too. The country's economic health depends on cajoling the newly unpredictable superpower to the south into doing Canada no harm. Its economic future depends on courting a prickly, difficult rival power.

Mr. Trudeau's task is figuring out how to court two key trade partners that are engaging in increasingly naked rivalry for global power.

In 2017, that imperative is at the centre of Justin Trudeau's world.

Associated Graphic

PHOTO ILLUSTRATION BY BEN BARRETT-FORREST /THE GLOBE AND MAIL

TV AND THE TRUMP CHALLENGE
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Television programmers face a unique dilemma in this new political era, John Doyle reports from Pasadena, Calif. Either they perpetuate liberal Hollywood stereotypes or build a bigger tent
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By JOHN DOYLE
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Saturday, January 14, 2017 – Print Edition, Page R1


Early on the morning after Meryl Streep unleashed her scolding of Donald Trump at the Golden Globes, and then Trump, aided by his supporters, hit back at "liberal" Hollywood, the fight continued.

CBS came here to the TV Critics Association press tour and introduced The Good Fight, a drama that will, it seems, pivot on themes arising from Trump's election as president.

That is, Trump's election symbolizes changes that impact a major character in a very bad way.

The Good Fight is a spinoff series taking characters from The Good Wife forward, and it is mainly about lawyer Diane Lockhart (Christine Baranski) and her descent into a hellish existence. She retires and then learns that she's lost all her retirement savings in a Ponzi scheme. And that's just the start.

The husband-and-wife team of Robert and Michelle King, cocreators of The Good Wife, also created The Good Fight.

And Robert King made it crystal clear at the press tour that the new show is firmly rooted in new, Trump-era America.

"The election gives us a spine," King said. "The Good Wife was always a little bit about the Obama years. I think this election gives shape to a new show which is, well, a matter of 'this is all gonna change.' Some people say for the better, some say for the worse."

You could posit that U.S. television offers U.S. society a mirror to itself. Network TV programs, aired within weeks or days of being written, reflect the mood and contemporary tensions with an intuitive accuracy.

In a country where every president is a magnetic centre of attention, the president becomes an instant archetype.

The thing us, when you posit that TV is a mirror to society, you're thinking old-school. In this age of what's called "Peak TV," there is a staggering amount of great TV being made and aired across multiple platforms.

The rote explanation for the explosion in quality content is the expanding number of cable channels and the arrival of multiple streaming services. Like the United States itself, politically and culturally, the TV landscape has fragmented. The mass audience, such as it exists, is much smaller.

Free of the restrictions placed on network TV, cable and streaming services deliver sophisticated, adult content. Much of it is challenging and some of it challenges the status quo and tradition. And audiences are drawn to it. While conventional network TV remains a vital force in the arena, and sometimes achieves a remarkable degree of urbanity and finesse, it has diminishing significance.

What the entire TV industry, but especially conventional TV, faces now is stark choices. Does it continue to create content that might arouse the anger and derision of Trump supporters and the right-wing media that helped get Trump elected? Or does it somehow seem to support Trump by celebrating figures like him and reflecting the views of pro-Trump viewers?

Or does it veer toward escapism that cannot be interpreted as having any political context or meaning?

Trump and his supporters have accused the news media and Hollywood of drooling over Barack Obama. And it's certainly true that the content of much television presented here is a snapshot of the Obama years, especially in matters of race.

Go back to the Bill Clinton years and remember that he was perceived as smart but immature, selfish yet sensitive and, most of all, unwilling to fit into the straitjacket of age and responsibility. It's no coincidence that on Seinfeld, Jerry and his callow friends George and Kramer became iconic figures just as Clinton became president. The typical male figure on U.S. television during the Clinton presidency was a boy in a grown-up's body.

But that was in a different TV era. So now what? The various networks and cable channels presented their wares to critics just days before Trump's inauguration. As the producers, execs and actors put on their sales pitches, simultaneously the country was changing the guard - there were cabinet-confirmation hearings in Washington, Obama gave his farewell address, there were salacious, unproven allegations against Trump and, of course, his train-wreck press conference.

The talk at the critics' press tour, an event about entertainment content, was Trump and then more Trump. At times it reached a point of absurdity. CBS introduced a new sitcom, Superior Donuts, set in a doughnut shop (based on the play by Pulitzer Prize-winner Tracy Letts), and the shadow of Trump loomed briefly over the presentation.

See, Superior Donuts is a comedy that's vaguely topical, with current-affairs issues turning up in the plot and dialogue.

Judd Hirsch plays a rueful former sixties radical who now owns a doughnut shop in a Chicago neighbourhood; Katey Sagal plays a regular customer who is a cop. Jermaine Fowler is a new black employee. Jokes about cop shootings and racial profiling abound. One critic asked if Trump supporters might be put off by the anti-establishment jokes.

Hirsch bristled: "What comedy would not take advantage of the fact that this is a funny thing that happened to us in this country? Any administration is funny.

Everything that's present tense is up for grabs in this country, and that's what makes great comedy.

I mean, if you don't do it, it looks like you're hiding. That would be crazy."

Then producer Bob Daily explained: "The pilot was written a year ago, and I think a lot of these issues, sadly, are evergreen, like gun control and racial profiling. So I don't think that the change in the administration will change what we're doing. I think it will just continue on that same path."

This, note you, was part of a discussion about a pretty innocuous CBS sitcom. CBS is not in the business of being political, of disturbing anyone's views. It's the No. 1 network because it offers a lot of harmless escapism.

But in the tense, pre-Trump period everything seems weirdly and intensely political. And here's the key thing - like Superior Donuts, most of what mainstream television will offer this year comes directly out of the Obama era. It will reflect Obamaesque issues and topics. Some might see that as a kind of resistance movement. Especially Trump himself, since he pays close attention to the entertainment world and seems to get a lot of information from TV.

All of this will make American TV at the start of the Trump era especially charged, laden with meaning. Do viewers make their TV choices based on real political events in the world, by political affiliation, or do they even care about political context and subtext? That's the taxing question that television is dealing with.

Like the United States itself, the creators and producers are divided. Some see their shows as a kind of resistance to Trumpism.

Others see opportunity, and many are very wary of being seen as politically motivated at all. Right now, it's the entire industry that's a mirror to the United States, not just one or two shows.

Robert and Michelle King, The Good Fight people, are proudly liberal, and in fact the pilot episode of The Good Fight was being filmed during the week of the U.S. election, which, they say, shifted its direction. The character Diane, a feminist who had a framed picture of herself with Hillary Clinton in her office, is personally devastated by the outcome and her world crashes, and not simply because she's been left almost broke. She's obliged to return to work but must toil surrounded by men, and confront financial fraud. It's a much more cruel world, this Trump era she experiences.

Said Baranski: "I think the interesting thing is you have a lead character who is in a practical free fall in a similar way to what the country is feeling right now.

How do you take the next step up when there's no foundation?

Where are we? Where are we morally?" At the same time, Shonda Rhimes, whose hit series Scandal is set in Washington and has White House figures as central characters, wants no perceived connection between her show and the new Trump administration.

Rhimes, a very successful black woman who has created multiple hit series, is a fascinating figure in the current entertainment climate on the cusp of the Trump era. She was a Hillary Clinton supporter and produced the short film that introduced Clinton on the night she accepted the Democratic nomination, a film that had endorsements from Obama and Bill Clinton. The most recent season of Scandal featured a presidential election and the tagline was, "The balance of power is about to shift." Yet Rhimes told critics here that there was "no correlation" between Scandal and real political events.

As it happens, the return of Scandal was postponed by ABC to accommodate the Jan. 19 airing of an interview with Trump on a 20/20 special. Asked if this bothered her, Rhimes said, "I'm not going to comment on a conversation I had with my boss, because I like my job." And she described any detected connection between her politics, the show's fiction and Trump to be "irrelevant."

If Rhimes wants her material seen as escapist rather than political, her bosses at ABC are proceeding with two very political productions early in 2017. Coming in February is When We Rise, a four-part miniseries about "the real-life personal and political struggles, setbacks and triumphs of a diverse family of LGBT men and women who helped pioneer one of the last legs of the U.S. civil-rights movement." This chronicle of the gay-rights movement will be aired over four consecutive nights and stars Rachel Griffiths, Mary-Louise Parker and Guy Pearce.

The creator, Dustin Lance Black, who won an Academy Award for the screenplay of Milk, told the critics, "Loud and clear, I want to say this show is under attack by the alt-right online. We have been targeted. We will get absolutely zero ratings on every Internet platform. Listen, there's a negative idea about this show out there in some small groups.

And let's be real. I don't think there's a lot of people who voted for Donald Trump who will love this show."

Further, ABC will air the third season of American Crime, its serious-issue showcase drama series. Like the first two, this one is substantial in intent, searing at times in examining toxic issues of race, religion and class. It has a very sharp edge, and is focused on real social issues that have a visceral impact on American society. This edition, which is superbly nuanced and poignant, is about the exploitation of immigrant Mexican workers and about sex trafficking. Creator John Ridley was wary of linking the drama to Trump's politics.

The series argues forcefully that migrant workers are exploited by rich businessmen, but he doesn't want this American Crime to be seen as political commentary.

"There's an infrastructure in place that unfortunately allows these things to continue. This story would have been told irrespective of who is in the Oval Office. It's the bigger picture."

Fox will air the miniseries Shots Fired as an "event" this spring.

The drama is about the explosive aftermath of two racially charged shootings in a small Southern town.

According to co-creator Gina Prince-Bythewood, the show's origins lie in a decision by Fox CEO Dana Walden, who went to veteran TV and movie producer Brian Grazer and said she wanted him to develop a project that would "take on the issues Ferguson brought up," referring to the racially charged riots in that suburban Missouri city. The riots erupted after a St. Louis County grand jury, of nine whites and three blacks, decided in November, 2014, not to indict a police officer in connection with the shooting of Michael Brown, an 18-year-old black man.

Grazer enlisted Prince-Bythewood, and Grazer says the point of the series is "to do an autopsy of a town like Ferguson." The show is forceful in asserting that white politicians simply fail to understand the lives of black citizens and turn a blind eye to racism from police and other authorities. PrinceBythewood has said previously that she was inspired by the Black Lives Matter movement while working on the show.

At a presentation of the series, actor Richard Dreyfuss, who stars in it, said, "This is probably the most current show you'll ever see. This is now. This is America." What was striking, however, was a shift away from the creators emphasizing racially charged political commentary in the series. Prince-Bythewood kept telling the TV critics that the series is entertaining as well as serious. "The mystery element is highly important," she said.

"And we knew that we wanted to create a great narrative that would, ideally, keep the audience at the edge of their seats. We had a creed for the show, which is to get the audience to the edge of their seats and, while they're leaning forward, hit them with the truth.

It's a whodunit and a whydunit."

That wariness about being observed as Obama-ish in content and intent is palpable here. Not everyone is prepared to be as blunt as Robert and Michelle King about their politics and where their show stands as a commentary and disapproval of Trump and what he stands for.

On the cable side of things, though, at least one executive seemed to relish the arrival of the Trump era. Showtime Networks president and CEO David Nevins was asked how a Trump White House would impact any shows he has on the air now or "what you choose to put on the air in the future."

Mainly, it seems, he sees opportunity. HBO has had huge success with John Oliver's weekly political satire and commentary show and Nevins thinks Showtime could go in that direction.

The channel had the highly engaging political-reporting series The Circus airing almost every week during the long U.S.election campaign and Nevins is thinking it could be a permanent fixture. To begin with, there will soon be an extralong episode of The Circus covering the period between election night and the inauguration.

"It has big-time potential besides an election," Nevins said.

And he added, "We have a lot of shows that are very political." He noted that the thriller Homeland, returning for a sixth season, reflects the political world, and that the money-based drama Billions is about "power politics in New York City," and is about the nefarious manipulations of an actual billionaire character.

Nevins seemed happy to report that "a Donald Trump administration will be filtered through in a lot of ways" on Showtime.

Particular emphasis was given to Homeland by Nevins. "Homeland went into production in August and was written in the months before that. It deals with an incoming administration, a transition period between administrations, and it deals a lot with issues of trust and distrust between the permanent state, the intelligence community and a new president. ... So it reflects that."

While Nevins describes Homeland as "prescient," the new season actually features a new female president, not a Trumplike figure. It does, however, also depict a deep distrust between the intelligence community and the president-elect on the show.

It's just that the distrust is less toxic than the real discord between Trump and U.S. intelligence agencies. And in terms of reflecting the Trump-era reality, main character Carrie Mathison, played by Claire Danes, tackles the hostility toward Muslim Americans and grapples with the matter of whether they should be considered potential terrorists.

Nevins and Showtime might well be blithe about how the coming Trump era will change television content, but Showtime is a premium cable channel that does not rely on advertising. It would be unaffected by the disdain of Trump supporters and attacks from pro-Trump media.

The reality for conventional American TV is very different. It must adapt. It will adapt. That hasn't happened yet. It seems the creators and producers in that arena did not expect a Trump victory. And if the Trump era is looming ominously for some in the industry, that's because TV is still in Obama mode. There are a lot of Meryl Streep types in U.S. TV, and a lot of nervous people too.

Still, if you ask me, as a critic who has been on these press tours many times, the nervousness is unnecessary. The cable and streaming services will continue to produce baldly compelling, unalloyed and often unnerving content that might disturb pro-Trump viewers. But it matters little. There is a massive, established audience that doesn't want only escapism.

Obama's legacy might be in doubt, politically and socially, but on the best of television, it is safe.

Associated Graphic

PHOTO ILLUSTRATION: THE GLOBE AND MAIL

Christine Baranski, left, and Cush Jumbo star in The Good Fight, which will tackle themes arising from Trump's presidency.

The new season of Homeland, starring Claire Danes, will deal with the issues that arise during a transition between administrations.


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