Target’s Gain, Canada’s Loss


Attention Target Shoppers! Start your shopping carts as Target gets ready to liquidate stock from its 133 Canadian stores! Great news, right?

going out of bizNot quite, actually. In a continuance of mismanagement, and “whatever could go wrong, will,” Target will begin to sell off stock in early February, after receiving court approval of a liquidator. They will not, however, be advertising closing sales with “bankruptcy” or “going out of business” signs. You’ll have to pick through the goods to find the goodies.

But – what goods? Canadians have been faced with lacklustre merchandising from Target stores since they entered the market, with many stores being visibly under-stocked, and shelves either empty or with a few sad items lined up in single rows.

There’s been a problem with Target’s supply chain management since they first arrived in Canada, which resulted in Tony Fisher, the first president of its operation here, being fired in early 2014. CEO Gregg Steinhafel was asked to resign from Target Corp in Juntarget less for moree of 2014 – he’s the one that got a total severance and other benefits package worth about the same as the total amount being offered to all 17,600 of the chain’s Canadian employees.

(Steinhafel’s severance, which includes Gregg_Steinhafel_Golden_Parachuteprofit sharing and stock, will amount to $61 million USD, according to Fortune magazine, a sum greater than the severance package for all 17,600 Canadian Target employees combined ($58 million USD). Target Corp has now agreed to increase the employment trust to $90 million (CDN) to ensure the Canadian employees receive their full severance payout.)

empty-shelvesMark Schindele was parachuted in as president of Target Canada in May 2014 to try and fix the merchandise log jam, and pricing discrepancies that resulted from products arriving at warehouses with incorrect information, thus failing proper price comparison checks. In January 2015, he was quietly moved to Minneapolis to become SVP of Target Properties.

Target’s withdrawal from Canada is going to cost the corporation a bundle – they have said they estimate they’ll take a loss of $7 Billion. But what has been the cost to Canada?

<> on January 17, 2013 in New York City.The total amount of jobs gained across Canada in all industries for 2014 were 121,000 positions, down from the previous high figure of 186,000 reported in November. I’m not great at math, but the loss of 17,600 jobs at Target, spread across 133 stores, is a significant chunk of the pie. Also, our new jobs were concentrated around the oil industry, which is taking a beating as OPEC drops prices.

“The City of Edmonton’s chief economist says 80 per cent of new net jobs in Canada in the last year came from Alberta. “Over the past 12 months, Alberta has generated more new jobs than any other province in Canada and that includes Ontario, which is five times as large as we are,” said John Rose.” (Sept 11/14 http://globalnews.ca/news/1559263/40-of-all-new-jobs-in-canada-last-year-generated-in-edmonton/)

target-continues-to-failAdditionally, those 17,600 jobs were suspect to begin with. . When Target first arrived, they bought 200 Zellers stores, but did not honour the employees union in place. In fact, the first thing it did was ditch the union, eliminate seniority for long term employees, and drop all former Zellers employees to the bottom of Target’s pay scale. Because the majority of Target Canada’s workers were largely part-time, seasonal, or working irregular shifts, they will not qualify for Employment Insurance or other benefits.

The 133 stores, as well as office space leases and the three massive distribution centres in Milton, Calgary and Cornwall, will all be put up for sale at the same time, as early as March 5.

target distribution centreThe distribution centres alone represent a significant real estate investment; each warehouse covers some 1.5 million square feet, or about 26 football fields.

Target came to Canada promising jobs, new shopping opportunities, and a boost to the Canadian economy. In exchange, they received subsidies and tax breaks, along with favourable bank financing. This should have been a win/win situation.

bankruptInstead, it’s one of the biggest corporate bankruptcies in Canadian history.

Target wants to walk away from over $5 billion that is owed to creditors, big and small. They owe cities, suppliers and landlords. It’s such a long list of creditors that it took a 45-page document to list them all. They owe The Canada Revenue Agency and provincial governments millions in taxes ( $12 million to the CRA, $2.6 million to the B.C. government, and $6.5 million to the Quebec government.)

PharmacistGuest With just five stores in Manitoba, they still managed to rack up bills of $850,000 to Bison Transport, more than $450,000 to TransX, more than $200,000 to Old Dutch Foods and more than $1 million in tax owed to the Manitoba government. Beyond that, there are hundreds of thousands of dollars owed to smaller suppliers and pharmacies which operated independently within the stores.

elfe juvenileSuppliers owed hundreds of thousands of dollars are considering ways they can force Target to return their unsold goods that were shipped within 30 days of the filing – rather than have the inventory be included in the chain’s liquidation sales. Target filed under the Companies Creditor Arrangement act, which doesn’t have the 30-day goods provision. After aggressively purchasing stock for anticipated December sales, it entered the crucial holiday season with the highest levels of stock possible. Companies such as Elfe Juvenile Products of Montreal, listed as being owed $38,294, is actually out $147,758, based on stock now in Target’s possession. So is Sager Food Products Inc. in Montreal, which is owed more than $11,000 on the books, but the company estimates as closer to $16,000.

Sager Food VP Santo Fata received its last order the day before the filing. Sager had been happy to fill Target’s orders, which “were steady, regular and getting larger. We were happy.”

Sobeys vegChapman’s Ice Cream is owed $19,987. Coca-Cola Canada hopes to see some of the $339,699 it is owed. $1.7 million is owed to Hillcrest Mall Management Inc. Roots Canada Ltd is owed $433,248 in royalties. Sobeys will have to absorb over $3 million in losses.

But no worries – Canada will take up the slack, in a loss of jobs, and increased prices and taxes to cover the share that Target is walking away from. Over $5 billion.

CANADA-CORPORATE-TAX-RATEThis is not the first corporation that has been invited, even aggressively courted, to bring their business to Canada. Nor will it be the last. It’s just one more corporate experiment that failed, and is ultimately paid for by workers, taxpayers and Canadian companies.

Added March 6/15 …

The gall of these thieves!

http://www.huffingtonpost.ca/2015/03/05/suppliers-gear-up-to-chal_n_6809404.html

Greece Is The Word


The outcome of the election in Greece is sending shock waves across Europe. Syriza, the left-wing, anti-austerity party led by new Greek Prime Minister Alexis Tsipras, won 36% (149 of the Parliament’s 300 seats,) and, by forming a coalition government with the center-right Independent Greeks’ win of 13 seats, will have least 162 seats, a viable majority.

Greece new govt plansThe new government plans to raise the minimum wage, and create 300,000 new jobs, reverse the bank bailouts and stop banks from foreclosing on home owner’s principle residences, close corporate loopholes and offshore havens, and bring in a voucher system to help seniors in need receive food and healthcare.

For more than five years, the Greek citizens have been crushed under austerity policies imposed by the Economic Union’s “troika” of creditors; the European Commission, the European Central Bank, and the International Monetary Fund. Greek foreign debt currently stands at 175% of Gross Domestic Product.

Almost a third of Greece’s economy collapsed under the restrictions. Since June 5, 2011, when the “Indignant Citizens Movement” or the “Greek indignados“, held a demonstration of between 300,000 – 500,000 people protesting in front of the Greek Parliament, a change in government thinking has been pre-ordained. greek protests 2011

The Greek protest was non-violent for about a month, but on June 29, 2011, the police cracked down viciously on the protesters. Three people were killed, and accusations of police brutality, excessive use of tear gas, as well as the alleged use of other expired and carcinogenic chemical substances, led to an outcry by international media and Amnesty International.

austerity greeceWith half the population in poverty, and no end in sight to continued austerity and misery, it was inevitable that the people would rise up, and demand change.

“Both Syriza and Independent Greeks have detailed emergency economic programs that will commit their government to deal with the humanitarian catastrophe left by five years of the hated Troika policy. The damage has been unprecedented short of wartime, and has led to unemployment officially at 28%, but considered by experts to be actually as high as 45%; pensions and salaries have been slashed by 25-45%. The destruction of the health-care system has increased the child mortality rate, the suicide rate, and the death rate.” (http://www.larouchepub.com/other/2015/4205grk_elex_eup_new_deal.html)

Britain's Prime Minister David Cameron delivers a speech  at Dynamic Earth in Edinburgh, ScotlandEuropean leaders were swift to denounce Greece’s audacity. British PM David Cameron tweeted, “The Greek election will increase economic uncertainty across Europe.” (Britain’s membership in the European Union is a major issue in the campaign for the upcoming May election.)

russia-greeceGerman Bundesbank President Jens Weidmann told ARD network that he hoped “the new Greek government will not make promises it cannot keep and the country cannot afford.” But Germany’s opposition Left Party l called the Syriza victory a “sign of hope for a new start in Europe.” And today, Russian Finance Minister Anton Siluanov told CNBC that Russia would consider giving financial help to debt-ridden Greece.

The EU is shaken by the possibility that Italy, Portugal and Ireland, also horribly impacted by austerity measures, will follow Greece’s lead. Fiscal conservatives fear that Greece’s demand to write off up to half of their of €240bn debt will create a “Global Event,” on the scale of the 2008 collapse of the Lehman Brothers Holdings, who went bankrupt with $600 billion in assets.

German Economics 1953But there is precedent in countries restructuring debt. In 1953, Germany was in a similar position to Greece today. With debt from pre-and post-war, they owed nearly 30 billion Deutschmarks to around 70 countries. With no access to capital, and creditors who didn’t believe the country could turn the economy around, Germany was desperate for cash to begin the country’s reconstruction and growth.

Despite budget cuts and laborious repayments, the economic burden was crushing their population. FinanDebt-Accord-290cial negotiations were begun by banker Hermann-Josef Abs, who led a German delegation in London in 1953. He hoped to turn the creditors of today into the financiers and investors of tomorrow. But the foreign creditors felt his first offers were insulting.

The London Debt Agreement, finally signed on February 27, 1953, saw half of Germany’s debts written off, with the rest restructured for the long-term. Germany was not to be economically overburdened. Today, our view of Germany’s economy is paired with the idea that the German people are just a very hard-working people. But none of what Germany accomplished would have been possible without the Agreement.

Greek beach NaxosThose who believe that Greece’s new vision is childish and selfish stereotype Greece’s economy as being irreparably rife with corruption and greed, and fed by an indolent, Mediterranean lifestyle. Those same people once thought that all Germans were Nazis.

greek protests 2014In fact, the average Greek retirement age is nearly 65, but the pension is quite small, requiring many retirees to continue working as long as they are physically able. According to Eurostat statistics, the Greeks work 40.6 hours a week, the highest of all 27 EU member states. The ordinary Greek citizen in not lounging on the beach drinking ouzo, they have been protesting in the streets, as tax increases and social security cuts destroy the peoples’ hope, and the public sectors are privatized to serve as collateral to service the European debt.

The Eurozone finance ministers have no intention of continuing debt relief negotiations unless the new Syriza government promises to honour all existing austerity agreements. Meanwhile, the Euro is trending downward, and the Podemos in Spain, a year-old political party that has surged to the top of the polls promising to reverse austerity in Spain and impose a levy on banks, are poised to join Greece in challenging the stranglehold of the Troika. As Tsipras pointed out during his victory speech, the old ways of doing things in Europe are doomed.   debts are not destiny

So – Where Are You From?


everything-affects-everythingI live in Canada, and I am Canadian. However, I am also a citizen of the world. When it comes to activities all over the globe, there are no more borders – all countries are affected by the actions of those in all other countries. You’ve only to look at the recent terrorist attacks, the Ebola outbreak, or the long tail rising from weather or chemical spills at home or half-way around the world to see that we can no longer ignore or be silent about events in other countries.

global citizenshipThe world has become a global village. Understanding that we are world citizens should be creating a new level of understanding amongst countries. We have the ability to stop thinking that it’s “us against them,” to end foolish militaristic posturing, and to work together to solve problems as one, rather than reinventing the world with every new advancement.

Instead, some countries seem to be curling in on themselves, becoming xenophobic, fearful of anything even slightly foreign to their lives. We stereotype each other, with the more fervid extremists creating myths that certain people and races are not only different to us, but evil and subhuman. Some feel it’s not enough to enjoy their own religion; they insist that everyone must adhere to the same beliefs, at pain of death.

nigeria_boko_haramEvery human life is worthy and valuable. The lives of the thousands of Nigerians being slaughtered by Boko Haram are as worthy of being honoured as those of the Charlie Hebdo journalists in France. The world’s leaders marched in solidarity with France, but are strangely silent over everyday atrocities in Africa and the Middle East.

Racism, tribalism, regionalism, religious bias, segregation – these are the beliefs and banners of those who would divide to conquer. In that division, there is money to be made, regardless of how much blood must be spilled. Wars hell-bent on maintaining those divisions kill the young and naive, who sacrifice themselves on these altars of delusion.

bomberman Luis QuilesIn the free world, we raise barriers around ourselves, building ‘safe’ communities where those who are not like ourselves are not granted admission. We wrap our own children in protective cocoons, while children in war torn countries deal with the madness of adults who consider the maiming or death of innocent civilians nothing but collateral damage.

wealthy foodIndustrial complexes rape the land, destroying century old forest growth and rain forests, and pushing the creatures that once lived there further and further away from their natural habitats. Those too wealthy and jaded to have a sense of their place on the planet elect to spend their family vacation picking off animals near extinction for ‘sport,’ while illegal poachers slaughter the last remaining wild elephants for their tusks and temporary riches. Impoverished villagers rise early to secretly haul away the sand from their beaches, which they sell to industrialists for use in manufacturing computer chips – for computers they’ll never have access to in their lifetimes.

Poverty has an effect on us all. 70% of the world’s population live in countries where inequality has increased since the 1980s.

wealthy never have enoughThe middle class is disappearing, and a new stratum of untold wealth shelters the richest 85 people across the globe who share a combined wealth equal to that of the poorest 3.5 billion of the world’s population.

In a global economy, where we are all citizens of the world, wealth inequality is becoming the most important division of all, threatening political stability and driving up social tensions. The wealthy elites, not content with merely controlling vast fortunes, are now concentrating their efforts on controlling the political process of many free world countries, in an attempt to rig the rules in their own favour.

Oxfam executive director, Winnie Byanyima cautioned that people around the world believe that the rich have too much influence over the direction their country is heading.

WealthDisparity“In developed and developing countries alike we are increasingly living in a world where the lowest tax rates, the best health and education and the opportunity to influence are being given not just to the rich but also to their children.

“Without a concerted effort to tackle inequality, the cascade of privilege and of disadvantage will continue down the generations. We will soon live in a world where equality of opportunity is just a dream. In too many countries economic growth already amounts to little more than a ‘winner takes all’ windfall for the richest.”

trickle_down_xlargeWe global citizens fear an oligarchy, and for good reason. The wealthy wield more and more political influence, allowing them to shape government policies in their favour. Faulty economic principles like the ‘trickle down theory’ have given the lowest tax rates to the rich in 29 out of 30 countries while personal taxes for the poor and middle classes have increased.

world citizenWe can no longer be silent when we see inequality or injustice, no matter where they are happening. “Where are you from?” is no longer applicable in a global village. The only question can be, “What are you doing to help change what is wrong with our society?”   

On a lighter note – here’s a link to my Sunday music column, at Bob Segarini’s “Don’t Believe A Word I Say” blog.

https://bobsegarini.wordpress.com/2015/01/25/roxanne-tellier-popping-the-top-off-covers/

Canada’s Heartaches by the Numbers


crude oil boomingOur dollar depreciated more than 2 cents on Wednesday, and is now worth .81 of the U.S. dollar, the lowest level since 2011. The Harper government put all Canada’s eggs in one basket by banking on North American crude oil, our top export, but the commodity has plunged from a high of $85 US a barrel in October of 2014, to a low of $46.US on Tuesday.

Finance Minister Joe Oliver announced this week that he would be delaying his budget from the usual February-March date until at least April, due to “market instability.”

Unable or unwilling to admit Canada’s damaged economy, Prime Minister Stephen Harper told reporters yesterday that “These things are creating some shocks that will impact us but they’re not going to throw us off our fundamental growth path or undermine the very strong fundamentals of the Canadian economy.” He added that “The government has complete confidence in the Bank of Canada in the actions that it has taken.”

The Bank of Canada cut the rate on overnight loans between commercial banks by a quarter point to 0.75% on Wednesday, in a response to the recent drop in oil prices. The previous rate had been at 1% since September 2010.  market failure

“The drop in oil prices is unambiguously negative for the Canadian economy. Canada’s income from oil exports will be reduced, and investment and employment in the energy sector are already being cut,” BoC’s Governor Stephen Poloz explained.

Many, including NDP finance critic Nathan Cullen, think Harper is in denial. The Conservatives had hoped to sail into 2015 on a high of oil fumes and the elimination of the$2.9-billion federal deficit , but it looks like their plans may be tanked as predicted federal tax revenues could be reduced by several billions of dollars thanks to global oil price shake-ups.

No worries, though, as Harper is relying on the annual $3 billion contingency fund built into the budget for “unforeseen circumstances.”

He also said that “The oil industry isn’t remotely the entire Canadian economy.” So … what is the Canadian economy?Canadian economy

Our population of 36 million boasts a 6.6% unemployment rate, with approximately 62% employed (16-64 years of age). (The United States, with 316.1 million, is at 5.6% unemployed, and 59.2% employed, while the United Kingdom, with 64.1 million people, has an unemployment rate of 6.0%, and 73% of people are employed.)

In Canada, wealth inequality, while an issue, is not quite as visible as in America; our Canadian 1% holds 12.5 per cent of Canada’s total income. 29 per cent earn $135,000 or more. But our incomes are generally lower – 95 per cent of working Canadians earn less than $100,000 a year. Our definition of ‘wealthy’ begins at $150,000.00 per year – chump change for wealthy Americans.

One of the reasons Canadians have not felt as impacted by wealth inequality is that, beginning in the late 1970’s, women surged into the workforce in record numbers. A household with two incomes could manage quite well. With the inclusion of children into the family, however, things got shakier financially. If one of the two wage earners has to stay home with the kids, they’ve effectively halved the family income, in order to raise children and run the home. As baby boomers aged, that child care burden lifted for a large portion of the middle class.

canadian workforceEducation, and it’s inevitable costs, are a factor. In order to succeed in a technological society, we need workers with complex skills and higher education. 64.1% of adults aged 25 to 64 had post-secondary qualifications in 2011, with women aged 25 to 34 holding a larger share of university degrees. 8 in 10 Registered Apprenticeship certificates were held by men.

In 2011, Almost two-thirds of adult Canadians had post-secondary qualifications, Stemwhile 2.1 million adults had a post-secondary certificate, diploma or degree in STEM (science and technology, engineering and engineering technology or mathematics and computer sciences) but half of STEM university degrees were held by immigrants who have lived in Canada for many years, and Canadian newcomers.

waiterUnfortunately, Canada has the third-highest proportion of low-paying jobs in the world, with only the U.S. and Ireland having a higher percentage of low-paying jobs. Canada is becoming a ‘nation of part-timers’; part-time employment may still outgrow full-time employment for some years as the baby boomers reduce their working hours or retire.

But the big, well-paying manufacturing companies have left Canada to take advantage of lower labour costs abroad. What’s left for those with or without special skills are low-wage service and retail jobs, which generally lack the benefits associated with higher paying positions, and are becomingly increasingly insecure.

StatsCan released this information in January 2015:statscan

In December (2014), Canada lost 4,300 jobs as full-time employment rose by 53,500 while there was a decline of 57,700 in part time jobs… Employment gains in 2014 amounted to 186,000 (+1.0 percent), with increases in the second half of the year accounting for most of the growth. Compared with 12 months earlier, the total number of hours worked increased by 0.7 percent.”

“There were 24,000 fewer women aged 25 to 54 employed in December. Their unemployment rate was unchanged at 5.2%, as fewer of them participated in the labour market. Employment among men aged 25 to 54 increased by 23,000 in December and their unemployment rate declined 0.2 percentage points to 5.5%, their lowest rate since 2008.”

This month, however, it was announced that five large retail companies will be closing Canadian operations. Lured to Canada by massive tax breaks, cuts and incentives, they’ll be leaving more than 21,000 unemployed by March or April.

Stephen-Harper-CowboyIn Alberta’s tar sands, Suncor cut 1000 jobs last week as oil prices crashed. They also announced that they’d decrease their capital spending program by a $1-billion, and reduce operating expense s by another $200 million.

Canada’s largest growth sector in jobs has been in service and retail industries. Only Alberta has seen respectable job growth. Mr. Harper’s blithe suggestion that the current oil crisis will fail to impact the economy as a whole, sounds very much like a man whistling past the graveyardcanada bleak future

Update Jan 24/15: Last week on Global TVs The West Block, Jason Kenny (MP, Canada’s Minister of Employment and Social Development and Minister for Multiculturalism) told host Tom Clark, “We won’t be using a contingency fund. A contingency fund is there for unforeseen circumstances like natural disasters.”

But during an interview for this week’s episode of The West Block, Canada’s Finance Minister, Joe Oliver told Tom Clark, “The contingency fund is there for unexpected and unavoidable shocks to the system and, you know, the oil price decline – which was a dramatic one – would fall in that category. I’m speaking as minister of finance so I’m sort of current on the thinking here.”