Author: Consultant

  • Canadian staff among 11,000 laid off worldwide by Facebook owner Meta

    Canadian staff among 11,000 laid off worldwide by Facebook owner Meta

    Facebook owner Meta Platforms Inc. META-Q +7.16%increase began laying off 11,000 people worldwide Wednesday, including in Canada, becoming the latest tech giant to dramatically slash costs after years of rapid growth in the sector.

    Meta has found itself in a triple bind this year. It is grappling with a sector-wide slowdown, a rocky rebranding to focus on immersive “metaverse” experiences, and a sharp slowdown in digital advertising, which underpins much of its traditional business. Its profit last quarter fell by more than half year-over-year, to US$4.4-billion, as the average price per ad on its platforms fell 18 per cent.

    Chief executive officer Mark Zuckerberg said in a post that the layoffs amounted to 13 per cent of Meta’s staff, calling the cuts “a last resort” as the company cut discretionary spending and extended a hiring freeze into its next fiscal year. Like many tech executives in recent months, including Shopify Inc. CEO Tobias Lutke, Mr. Zuckerberg acknowledged that he was wrong in planning for a future in which the frenzied pandemic rush into e-commerce would be sustained.

    “I got this wrong,” Mr. Zuckerberg wrote, later adding: “We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”

    The news comes just months after Meta and other massive U.S. technology companies were bidding up the price of Canadian tech talent, sending salaries up as much as 30 per cent year-over-year in tech companies of all sizes across the country. In late March 2022, Meta said it would hire an additional 2,500 staff in Canada over five years – many of them remote positions, though the company also announced a new engineering hub in Toronto.

    Ontario Premier Doug Ford praised the March job announcement, calling it an opportunity to “demonstrate that our tech talent no longer has to look elsewhere to pursue their careers.”

    Meta owns the original Facebook platform, Instagram and WhatsApp, and last year began an extensive, controversial rebrand to focus on 3-D immersive experiences to bring people together in what it calls the “metaverse.” A LinkedIn analysis suggests Meta has at least 1,100 staff in Canada.

    Meta’s Canadian office declined to say how many Canadians would be affected by Wednesday’s cuts, but numerous Canadian staff began announcing their own layoffs by mid-morning.

    Mitchell Steiman, who was hired at Meta in July as a client partner for emerging brands on Facebook and Instagram, said he was impacted by the layoffs. “It was everything that I could have hoped for in a role, and more. I will miss the people and culture there immensely,” he wrote on LinkedIn Wednesday about his former position at Meta, which was based in the Greater Toronto Area.

    “In my small team, 9 out 10 teammates were laid off,” said Lois Wang, a technical recruiter at Meta based in Toronto, writing on LinkedIn that she had been there for just under a year before what she called the “massive” layoffs that particularly affected the company’s recruiting teams.

    “In Q3 2022, my performance metrics of onsite interview ranked top 2 among whole 37 teammates in Meta East Coast sourcing team,” she said. “I believe that being optimistic and hopeful is the best way to get through a tough time like this.”

    Across Canada, high-profile companies including e-commerce platform Shopify Inc. SHOP-T -5.15%decrease, investment firm Wealthsimple Technologies Inc. and social-media management company Hootsuite Inc. have all shed hundreds of staff in recent months. Last week, Twitter Inc.’s new owner Elon Musk began a 50-per-cent cut of the social network’s staff, which included numerous Canadians, as he began drastically retooling the notoriously unprofitable company.

    The sector had experienced unbridled growth since the Great Recession ushered in more than a dozen years of low interest rates, fostering a digital economy that hinged on social platforms and mobile computing. But macro factors such as the COVID-19 pandemic, war in Ukraine and their twinned supply-chain constraints have altered global dynamics.

    It’s been nearly a year since public markets began turning against the sector as inflation worries turned into fears of rising interest rates and cut into tech valuations. Those fears were confirmed by this past March, as central bankers began jacking up rates. Tech companies big and small began slashing costs – and jobs – as a result.

    More to come

  • Surprisingly close U.S. midterms keep investors on edge: What market observers are saying

    Surprisingly close U.S. midterms keep investors on edge: What market observers are saying

    Investors on Wednesday are grappling with an unclear outcome in the U.S. midterm elections, as a better-than-expected showing by Democrats muddies the outlook for issues such as fiscal spending and regulation although some form of divided government seen as good for stocks could still shape up.

    Control of Congress was still up for grabs early on Wednesday, with several pivotal races uncalled. The prospects of a Republican “red wave” had evaporated although in the House of Representatives, Republicans remained favored to win a majority.

    U.S. stock indexes opened lower as uncertainty around the vote results weighed on the mood, with investors focus shifting to Thursday’s important October Consumer Price Index report. The U.S. dollar was steady.

    With Democrat Joe Biden in the White House, Republicans taking the House would lead to a split government, an outcome that has been accompanied by positive long-term stock market performance in the past.

    Here’s what observers are saying:

    ALEC PHILLIPS, ECONOMICS RESEARCH, GOLDMAN SACHS

    “While Democrats outperformed expectations and Democratic Senate control would be a surprise, the end result nevertheless appears to be divided government and the policy implications are broadly similar to what would have been expected with Republican majorities in both chambers.”

    “Senate control matters much less if Republicans have won the House majority. There are two general differences between a divided Congress and a Republican Congress. First, the Senate confirms presidential nominations with a simple majority, so continued Democratic control would limit Republican influence on President Biden’s nominations over the next two years. Second, passing legislation in a divided Congress would be harder than in a Republican Congress, though in either scenario bipartisan support would be needed (as President Biden could veto in either scenario, and Republicans would lack the 2/3 vote to override) so the amount of legislative activity could be similar.”

    “Under a Republican House and Democratic Senate in 2011 and 2013, debt limit uncertainty disrupted financial markets and led to substantial spending cuts. A similar scenario could play out next year, though a Democratic Senate would make it less likely that a debt limit deal would involve spending cuts of the sort enacted in 2011. A legislative response to a potential recession would also be more difficult.”

    FLORIAN IELPO, PORTFOLIO MANAGER, LOMBARD ODIER ASSET MANAGEMENT

    “The perspective of that inflation number overshadows everything else, inclusive of the U.S. political situation. We need lower inflation to keep our eyes off the Fed and start looking elsewhere.”

    MICHAEL HEWSON, CHIEF MARKETS STRATEGIST, CMC MARKETS, LONDON

    “If the Republicans can get a blocking in one of the Houses, then ultimately, that could be less inflationary, because it will mean the Democrats won’t be able to spend nearly as much money, so in terms of yields, that could be a good thing.

    “It’s potentially also positive for stock markets and probably why we’ve seen a weaker dollar, but obviously, the main focus remains on tomorrow’s CPI numbers and particularly the core number.”

    FIONA CINCOTTA, SENIOR MARKETS ANALYST AT CITY INDEX, LONDON.

    “It does look like it’s a bit tighter than expected. The expectation is still for the Republicans to flip the House of Representatives.

    “We see a gridlocked Washington as a dollar negative. Any spending measures being kept in check could bring inflation down and potentially we could see less aggressive moves from the Fed (U.S. Federal Reserve).”

    STUART COLE, HEAD MACRO ECONOMIST, EQUITI CAPITAL, LONDON

    “The midterms do not seem to have gone quite so well for the Republican Party as had been forecast, but even though they look like making smaller gains, it still appears that they will do well enough to take control of at least the House and that alone suggests political gridlock going forward.

    “This will almost certainly be the end of the tax rises the Biden administration had been talking about imposing on U.S. corporations and the well-off. It also means the end of the loose fiscal policy Biden had been pursuing. This is particularly important, as it removes a source of stimulus from the economy and makes the job of the Fed in getting inflation back under control that little bit easier, to the extent that it may allow for a lower terminal rate.

    “But looming larger now is the prospect of another battle over raising the US debt ceiling and the prospect for Government shutdowns while the Democrats and Republicans argue over it.

    “For the markets, a grid-locked administration should be positive for equities, given that it makes the Fed’s task that little bit easier.”

    DANNI HEWSON, FINANCIAL ANALYST, AJ BELL, LONDON:

    “The fact that we didn’t see a Republican landslide as a lot of people had expected does now raise questions about whether or not the Democrats will maintain control of the Senate. You’re in a slightly different situation and it does look like the Biden Presidency has not been dealt a massive blow by these midterm elections, so the markets are in a wait-and-see mode.”

    CHARU CHANANA, MARKET STRATEGIST, SAXO MARKETS, SINGAPORE

    “The race seems to be closer than expected, especially for the Senate. If Democrats take the Senate, it will be a huge embarrassment for Republicans even if (they) take the House.

    “U.S. index futures have turned negative, and I think (the) dollar could turn back higher if Democrats retain the Senate.”

    GARRETT MELSON, PORTFOLIO STRATEGIST, NATIXIS INVESTMENT MANAGERS SOLUTIONS

    “The likely result (of the election) is gridlock in some shape or form. Divided government reduces the likelihood of significant legislative changes, thereby reducing policy uncertainty – a positive for risk assets.

    “Looking into mid-late 2023 we may see delayed effects of the election as the budget and debt ceiling debate come into focus. Should Republicans take one or both chambers of Congress expect a potentially contentious bout of political brinksmanship that could contribute to some market volatility in 2023 before an eventual resolution is reached.”

    QUINCY KROSBY, CHIEF GLOBAL STRATEGIST AT LPL FINANCIAL, CHARLOTTE, NORTH CAROLINA

    “Some of the key races are quite close. It’s going to take some time to see who wins but it is surprising … We already have a scenario of gridlock because the Republicans are going to take the House. The market can accept gridlock. It means that many of the measures from the administration will be thwarted by the opposing part.

    “That said, if the Republicans take the Senate along with the House that provides a pro-business backdrop for the market.”

    RANDY FREDERICK, VICE PRESIDENT OF TRADING AND DERIVATIVES, CHARLES SCHWAB, AUSTIN, TEXAS

    “Obviously we don’t have a 100% reporting in on anything yet, but it doesn’t look like anything we have seen so far has spooked markets at all.”

    ASH ALANKAR, HEAD OF GLOBAL ASSET ALLOCATION AT JANUS HENDERSON INVESTORS

    “On one end, the reduced likelihood of corporate and personal and capital gain tax increases, that come with a Republican win, will be a tailwind for all equities … however on the other end, the prospects of no tax increases and extension of Trump’s tax cuts all potentially are inflationary as the private sector has more disposable after tax income.

    “A Republican win will in generally be positive for equities, but inflationary risk is unlikely to be mitigated nor accelerated.”

    TROY GAYESKI, CHIEF MARKET STRATEGIST, FS INVESTMENTS, NEW YORK

    “In the chance that both the House and Senate flip, it could lead to a miniature kind of sideways slash bear market rally, but ultimately, Fed tightening, money supply contraction and inevitable recession will dominate the changing political landscape in the U.S.

    “When you think of the order of importance to markets, it’s really the Fed, the economy, the very troubling situation overseas and the midterms they’re just not terribly relevant over the next 6, 12, 18 months, because they’re really almost a non-event.

    “If the Congress flips, it could be perceived as good news by investors because it means fiscal stimulus is over and that on the margin could make the Fed’s job a little bit easier to break inflation.”

    JJ KINAHAN, CEO, IG NORTH AMERICA, CHICAGO

    “Having a balanced ticket in terms of Republicans, if they get the House and Senate, or just the House, will help slow some of the government spending which many have seen as one of the major contributors to inflation. So that happening may help do some of Fed’s work for them, so to speak, and that’s why that would be viewed favorably by the market.”

    BROOKS RITCHEY, CO-CIO, K2 ADVISORS

    “If we get a split Congress, we might have to adjust our portfolios to be less defensive than we are today.”

    IPEK OZKARDESKAYA, SENIOR ANALYST, SWISSQUOTE BANK

    “From an investor point of view, a Republican win in both chambers is a good outcome for the stocks. And even a divided government, which we will sure get, is better for the stocks than a Democratic win.”

    JACK ABLIN, CHIEF INVESTMENT OFFICER, CRESSET CAPITAL, CHICAGO

    “I think the markets are rallying at the prospect of gridlock.”

    “Fiscal spending has created a challenge for central banks worldwide. The prospect of no legislation is a bullish inflation signal.”

  • Consulting firm CGI reports fourth-quarter profit and revenue up from year ago

    Consulting firm CGI reports fourth-quarter profit and revenue up from year ago

    CGI Inc. GIB-A-T +0.24%increase says it earned a fourth-quarter profit of $362.4-million, up from $345.9-million in the same quarter last year as its revenue rose eight per cent compared with a year ago.

    The business and technology consulting firm says the profit amounted to $1.51 per diluted share for the quarter ended Sept. 30, up from a profit of $1.39 per diluted share in the same quarter last year.

    Revenue for the three-month period totalled $3.25-billion, up from $3.01-billion a year earlier.

    The company says its revenue was up 13.9 per cent compared with a year ago, when excluding $177.9-million of unfavourable foreign currency impact.

    Excluding specific items, CGI says it earned $1.56 per diluted share in its latest quarter, up from $1.40 per diluted share in its fourth quarter last year.

    Analysts on average had expected a profit of $1.55 per share and nearly $3.21-billion in revenue, according to estimates compiled by financial markets data firm Refinitiv.

  • BMO to take billion-dollar charge after losing Ponzi lawsuit in U.S.

    BMO to take billion-dollar charge after losing Ponzi lawsuit in U.S.

    A jury in a Minnesota bankruptcy court has found the U.S. arm of Bank of Montreal BMO-T -1.16%decrease liable for US$564-million in damages in a lawsuit related to one of the largest Ponzi schemes in history, and the bank will take a $1.1-billion charge as it prepares to appeal the decision.

    In a verdict reached on Tuesday, the jury held BMO Harris Bank N.A. – the U.S. subsidiary of BMO – liable for “aiding and abetting breach of fiduciary duty,” according to a court filing.

    It awarded US$484-million in compensatory damages as well as nearly US$80-million in punitive damages in favour of the trustee in bankruptcy proceedings for companies controlled by Thomas Joseph Petters, who was convicted in 2008 of leading a nearly $2-billion fraud and was a client of a bank later acquired by BMO.

    The trustee is trying to recover money for victims of the fraud. The compensatory damages were about one quarter of the US$1.9-billion that the trustee had sought.

    BMO’s $1.1-billion charge includes the interest payments it may have to pay on the judgment. The exact amount will be decided later by a judge.

    The jury found BMO was not liable on three other counts that included alleged violations related to fiduciary duties, as well as aiding and abetting fraud.

    BMO said in a written statement that it is disappointed with the ruling, “which is not supported by the evidence or the law,” and the bank “intends to pursue all available legal options including appealing the jury verdict and award.” The bank also said that according to the terms of a prior settlement in another Petters-related case, “BMO Harris is entitled to recover approximately 21 per cent of any amount that it pays to the trustee.”

    “We are confident that we have strong grounds for appeal,” the statement said.

    The lawsuit began in 2012 and alleged that Milwaukee-based Marshall and Ilsley Bank, which BMO acquired in 2011, and a predecessor bank facilitated a Ponzi scheme run by Mr. Petters between 1999 and 2008. Mr. Petters was revealed to have been running a US$1.9-billion fraud over a 15-year span – at the time, the largest Ponzi scheme in history, but later surpassed by a fraud led by Bernie Madoff. Mr. Petters was convicted and sentenced to 50 years in federal prison.

    As plaintiff in the lawsuit, the trustee argued that M&I facilitated the Ponzi scheme, standing by as Mr. Petters moved tens of millions of dollars in and out of his corporate and personal accounts. The pattern of money movement was wholly inconsistent with what M&I understood to be the business model of Mr. Petters’s companies, the trustee alleged in the lawsuit.

    Michael Collyard, a lawyer at Robins Kaplan LLP acting for the trustee, said it will also seek prejudgment interest that could bring the total award to more than US$1-billion if its arguments are successful. Mr. Collyard intends to seek 10-per-cent annual interest, which he says is allowed by Minnesota law.

    As a result, BMO will record a provision of $1.12-billion that includes possible prejudgment interest as well as potential recoveries, which will result in an after-tax charge of $830-million to be recorded when the bank releases its fiscal fourth-quarter financial results this month.

    “We are extremely pleased with the jury’s decision to hold BMO Harris Bank accountable for its role,” Mr. Collyard said in an e-mailed statement. “This is a fantastic result for the trust pursuing recovery for the people who lost money in this fraud.”

    Mr. Collyard also said he believes the award is the largest in a civil case in Minnesota’s history.

    BMO went to trial last month after getting sanctioned by a judge for intentionally destroying and failing to preserve evidence.

    Judge Kathleen Sanberg ruled in July, 2019, that M&I destroyed computer backup tapes in 2010 and 2011 that likely contained documents and memos sent between its bankers and Mr. Petters. In 2014, BMO Harris Bank employees found some tapes that might have contained evidence – but then falsely told the court all tapes were gone, according to the judge.

    BMO Harris Bank, the judge ruled, “has failed to be candid and has fought discovery at every step … has lied to this court and has attempted to hide evidence on several occasions.”

    Her ruling allowed the jury to hear about the evidence destruction.

  • China’s trade unexpectedly shrinks in October as COVID-19 curbs, global slowdown jolt demand

    China’s trade unexpectedly shrinks in October as COVID-19 curbs, global slowdown jolt demand

    China’s exports and imports unexpectedly contracted in October, the first simultaneous slump since May 2020, as a perfect storm of COVID-19 curbs at home and global recession risks dented demand and further darkened the outlook for a struggling economy.

    The bleak data highlight the challenge for policy-makers in China as they press on with pandemic prevention measures and try to navigate broad pressure from surging inflation, sweeping increases in worldwide interest rates and a global slowdown.

    Outbound shipments in October shrank 0.3 per cent from a year earlier, a sharp turnaround from a 5.7 per cent gain in September, official data showed on Monday, and well below analysts’ expectations for a 4.3 per cent increase. It was the worst performance since May 2020.

    The data suggest demand remains frail overall, and analysts warn of further gloom for exporters over the coming quarters, heaping more pressure on the country’s manufacturing sector and the world’s second-biggest economy grappling with persistent COVID-19 curbs and protracted property weakness.

    Chinese exporters weren’t even able to capitalize on a prolonged weakening in the yuan currency since April and the key year-end shopping season, underlining the broadening strains for consumers and businesses worldwide.

    The yuan on Monday eased 0.4 per cent from a more than one-week high against the dollar reached in the previous session, as the weak trade data and Beijing’s vow to continue with its strict zero-COVID strategy hurt sentiment.

    “The weak export growth likely reflects both poor external demand as well as the supply disruptions due to COVID outbreaks,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, citing COVID-19 disruptions at a Foxconn factory, a major Apple supplier, as one example.

    Apple Inc said it expects lower-than-anticipated shipments of high-end iPhone 14 models following a key production cut at the virus-blighted Zhengzhou plant.

    “Looking forward, we think exports will fall further over the coming quarters … We think that aggressive financial tightening and the drag on real incomes from high inflation will push the global economy into a recession next year,” said Zichun Huang, economist at Capital Economics.

    Growth of auto exports in terms of volume also slowed sharply to 60 per cent year-on-year from 106 per cent in September, according to Reuters calculations based on customs data, reflecting a transition from demand for goods to services in major economies.

    Overall exports to China’s major markets of the United States and European Union also slumped in October, off 12.6 per cent and 9 per cent year-on-year, respectively.

    Almost three years into the pandemic, China has stuck to a strict COVID-19 containment policy that has exacted a heavy economic toll and caused widespread frustration and fatigue.

    Feeble October factory and trade figures suggested the economy is struggling to get out of the mire in the last quarter of 2022, after it reported a faster-than-anticipated rebound in the third quarter.

    The Ukraine war, which sparked a surge in already high inflation globally, has added to geopolitical tensions and further dampened business activity.

    Chinese policy-makers pledged last week to prioritize economic growth and press on with reforms, easing fears that ideology could take precedence as President Xi Jinping began a new leadership term and disruptive lockdowns continued with no clear exit strategy in sight.

    Tepid domestic demand, partly weighed down by fresh COVID-19 curbs and lockdowns in October, hurt importers.

    Inbound shipments declined 0.7 per cent from a 0.3 per cent gain in September, below a forecast 0.1 per cent increase, marking the weakest outcome since August 2020.

    The harsh impact on demand from strict pandemic measures and a property slump was also highlighted in a broad range of Chinese imports; purchases of soybeans declined to eight-year-lows last month while copper imports fell and coal imports slackened after hitting a 10-month high in September.

    On top of the global slowdown, frail domestic consumption will put more strain on China’s economy for a while yet, analysts say.

    “Insufficient domestic demand is the main constraint on China’s short-term recovery and long-term growth trajectory,” said Bruce Pang, chief economist at Jones Lang Lasalle.

  • China’s crude oil imports in October rebound amid new refinery rollouts

    China’s crude oil imports in October rebound amid new refinery rollouts

    China’s crude oil imports in October rebounded to the highest level since May, up 14 per cent from a low base a year earlier in their first annual growth in five months, data showed on Monday, as two greenfield refineries prepared to start operations.

    The world’s largest crude importer brought in 43.14 million tonnes of crude oil last month, equivalent to 10.16 million barrels per day (bpd), according to data from the General Administration of Customs.

    The October imports were up from September’s 9.8 million bpd.

    The rebound came as PetroChina started trial production at a 200,000-barrel-per-day crude unit at its newly-built refinery in Guangdong, while privately controlled Shenghong Petrochemical also got ready to officially launch its 320,000-bpd plant in Jiangsu province.

    Refiners also took advantage of a slide in global crude prices to replenish stocks, hauling in cargoes from the Americas and the Middle East.

    Imports for the first 10 months of the year totalled 413.53 million tonnes, or about 9.93 million bpd, 2.7 per cent below the corresponding period last year.

    Spurred by Beijing’s abrupt release of a large number of export quotas, companies shipped overseas 4.456 million tonnes of refined fuel last month, up 13 per cent from a year before, data showed.

    However, year-to-date exports remained 24.5 per cent below year-earlier levels at 39.91 million tonnes, due to a broad curb on fuel exports earlier in the year.

    Natural gas imports last month via pipelines and as liquefied natural gas (LNG) sank to the lowest level in two years at 7.61 million tonnes, after a brief spike the previous month ahead of the winter heating season.

    Year-to-date imports remained 10.4 per cent lower than a year earlier at 88.73 million tonnes, because of steep declines in LNG imports as companies slashed costly spot purchases.

    While predicting slower demand growth this winter, national energy firms prioritized domestic production and boosted imports of pipeline gas from Russia and Central Asia.

  • Canada’s Summit Industrial REIT, a major warehouse owner, sold to Singapore’s sovereign wealth fund for $4.5-billion

    Canada’s Summit Industrial REIT, a major warehouse owner, sold to Singapore’s sovereign wealth fund for $4.5-billion

    GIC, Singapore’s giant sovereign wealth fund, is swooping into Canada to acquire Summit Industrial Income REIT SMU-UN-T +25.93%increase for $4.5-billion, more proof that warehouse properties in major urban centres such as Toronto and Montreal are some of the hottest real estate to own anywhere in the world.

    GIC’s acquisition, announced Monday, is structured as a joint venture with Dream Industrial REIT DIR-UN-T +4.23%increase, split 90 per cent and 10 per cent, respectively. Together, they are paying $23.50 in cash per Summit unit, a 31 per cent premium to Friday’s closing price.

    Canada’s industrial warehouse owners are enjoying some of the strongest business fundamentals across all classes of real estate. The market for domestic warehouse is so strong that the national vacancy rate has fallen to a record low of 1.6 per cent, according to commercial real estate services and investment firm CBRE Group Inc. Supply of properties is so tight that some landlords have been able to raise rents more than 100 per cent in tenant turnovers and lease renewals.

    However, publicly-traded industrial REITs have struggled of late because the e-commerce boom has taken a hit, with major online platforms such as Amazon and Shopify warning that the pandemic gains were an anomaly and are starting to reverse.

    Interest rates have also jumped and continue to climb higher, which makes commercial mortgages more expensive. Incessant inflation has also sent development costs soaring.

    At the same time, higher rates give investors more options to earn similar – or better – yields. One-year guaranteed investment certificates, for instance, now pay close to 5 per cent annually. Summit Industrial REIT’s units paid a 3.2 per cent annual distribution yield as of Friday’s market close.

    The headwinds have spooked many public investors and REITs of all stripes have been trading at deep discounts to their net asset values. As of Friday, Summit’s units were trading for $17.93 a piece, below analysts’ average calculation of the REIT’s net asset value, which was $19.66 per unit.

    Summit Industrial exclusively owns Canadian warehouses and its units had dropped 21 per cent in 2022 before the acquisition announcement. Yet when the REIT last reported quarterly earnings, in August, management disclosed that its average rent increase this year when a lease was renewed or in a tenant turnover was 46 per cent. As well, the national average rental rate across all Canadian industrial warehouses rose to a record high of $12.25 per square foot. Five years ago, it was less than $7.

    Summit isn’t the first Canadian industrial warehouse owner to be acquired by a global institutional investor. In 2018, Blackstone Group acquired Pure Industrial Real Estate Trust for $2.48-billion.

    If the Summit takeover is approved by unitholders, Dream Unlimited, a holding company run by Dream Industrial founder Michael Cooper, will serve as the asset manager for the joint venture. In a news release, Dream said it will keep “the majority of Summit employees” after the deal closes.

  • Twitter launches $7.99 monthly subscription with blue verification check mark

    Twitter launches $7.99 monthly subscription with blue verification check mark

    Twitter has announced a subscription service for $7.99 a month that includes a blue check now given only to verified accounts as new owner Elon Musk works to overhaul the platform’s verification system just ahead of U.S. midterm elections.

    In an update to Apple iOS devices available in the U.S., Canada, Australia, New Zealand and the U.K., Twitter said users who “sign up now” for the new “Twitter Blue with verification” can receive the blue check next to their names “just like the celebrities, companies and politicians you already follow.”

    But Twitter employee Esther Crawford tweeted Saturday that the “new Blue isn’t live yet – the sprint to our launch continues but some folks may see us making updates because we are testing and pushing changes in real-time.” Verified accounts did not appear to be losing their checks so far.

    It was not immediately clear when the subscription would go live, and Crawford did not immediately respond to a message to clarify the timing. Twitter also did not immediately respond to a message for comment.

    Anyone being able to get the blue check could lead to confusion and the rise of disinformation ahead of Tuesday’s elections, but Musk tweeted Saturday in response to a question about the risk of imposters impersonating verified profiles – such as politicians and election officials – that “Twitter will suspend the account attempting impersonation and keep the money!”

    “So if scammers want to do this a million times, that’s just a whole bunch of free money,” he said.

    But many fear widespread layoffs that began Friday could gut the guardrails of content moderation and verification on the social platform that public agencies, election boards, police departments and news outlets use to keep people reliably informed.

    The change will end Twitter’s current verification system, which was launched in 2009 to prevent impersonations of high-profile accounts such as celebrities and politicians. Twitter now has about 423,000 verified accounts, many of them rank-and-file journalists from around the globe that the company verified regardless of how many followers they had.

    Experts have raised grave concerns about upending the platform’s verification system that, while not perfect, has helped Twitter’s 238 million daily users determine whether accounts they get information from are authentic. Current verified accounts include celebrities, athletes and influencers, along with government agencies and politicians worldwide, journalists and news outlets, activists, businesses and brands, and Musk himself.

    “He knows the blue check has value, and he’s trying to exploit it quickly,” said Jennifer Grygiel, an associate professor of communications at Syracuse University and an expert on social media. “He needs to earn the trust of the people before he can sell them anything. Why would you buy a car from a salesman that you know has essentially proved to be chaotic?”

    The update Twitter made to the iOS version of its app does not mention verification as part of the new blue check system. So far, the update is not available on Android devices.

    Musk, who had earlier said that he wants to “verify all humans” on Twitter, has floated that public figures would be identified in ways other than the blue check. Currently, for instance, government officials are identified with text under names stating that they are posting from an official government account.

    President Joe Biden’s @POTUS account, for example, says in grey letters it belongs to a “United States government official.”

    The announcement comes a day after Twitter began laying off workers to cut costs and as more companies are pausing advertising on the platform as a cautious corporate world waits to see how it will operate under its new owner.

    About half of the company’s staff of 7,500 was let go, tweeted Yoel Roth, Twitter’s head of safety and integrity.

    He said the company’s front-line content moderation staff was the group the least affected by the job cuts and that “efforts on election integrity – including harmful misinformation that can suppress the vote and combatting state-backed information operations – remain a top priority.”

    Twitter co-founder and former CEO Jack Dorsey took blame for the job losses.

    “I own the responsibility for why everyone is in this situation: I grew the company size too quickly,” he tweeted Saturday. “I apologize for that.”

    Musk tweeted late Friday that there was no choice but to cut jobs “when the company is losing over $4M/day.” He did not provide details on the daily losses at Twitter and said employees who lost their jobs were offered three months’ pay as severance.

    He also said Twitter has already seen “a massive drop in revenue” as advertisers face pressure from activists to get off the platform, which heavily relies on advertising to make money.

    United Airlines on Saturday became the latest major brand to pause advertising on Twitter, joining companies including General Motors, REI, General Mills and Audi.

    Musk tried to reassure advertisers last week, saying Twitter would not become a “free-for-all hellscape” because of what he calls his commitment to free speech.

    But concerns remain about whether a lighter touch on content moderation at Twitter will result in users sending out more offensive tweets. That could hurt companies’ brands if their advertisements appear next to them.

    U.N. High Commissioner for Human Rights Volker Türk on Saturday urged Musk to “ensure human rights are central to the management of Twitter.” In an open letter, Türk said reports that the company’s whole human rights team and much of the ethical AI team were laid off was not “an encouraging start.”

    “Like all companies, Twitter needs to understand the harms associated with its platform and take steps to address them,” Türk said. “Respect for our shared human rights should set the guardrails for the platform’s use and evolution.”

    Meanwhile, Twitter cannot simply cut costs to grow profits, and Musk needs to find ways to raise more revenue, said Dan Ives, an analyst with Wedbush. But that may be easier said than done with the new subscription program for blue checks.

    “Users have gotten this for free,” Ives said. “There may be massive pushback.”

    He expects 20% to 25% of Twitter’s verified users to sign up initially. The stakes are high for Musk and Twitter to get this right early and for sign-ups to work smoothly, he added.

    “You don’t have a second chance to make a first impression,” Ives said. “It’s been a train-wreck first week for Musk owning the Twitter platform. Now you’ve cut 50% (of the work force). There are questions about just the stability of the platform, and advertisers are watching this with a keen eye.”

  • Economic Calendar: Nov 7 – Nov 11

    Economic Calendar: Nov 7 – Nov 11

    Monday November 7

    China foreign reserves and trade surplus

    Germany industrial production

    (3 p.m. ET) U.S. consumer credit for September.

    Earnings include: Activision Blizzard Inc.; Brookfield Business Partners LP; CT Real Estate Investment Trust; Curaleaf Holdings Inc.; Franco-Nevada Corp.; Marriott International Inc.; Obsidian Energy Ltd.; Toromont Industries Ltd.

    Tuesday November 8

    China aggregate yuan financing, new yuan loans and money supply

    Japan household spending

    (6 a.m. ET) U.S. NFIB Small Business Economic Trends Survey for October.

    Also: U.S. midterm elections

    Earnings include: Bausch Health Companies Inc.; Boardwalk REIT; B2Gold Corp.; Canadian Apartment Properties REIT; Dream Industrial REIT; Equitable Group Inc.; Finning International Inc.; Freehold Royalties Ltd.; Goeasy Ltd.; Intact Financial Corp.; Keyera Corp.; Lundin Gold Inc.; NexGen Energy Ltd.; Occidental Petroleum Corp.; Parex Resources Inc.; Pioneer Natural Resources Co.; Sierra Wireless Inc.; Walt Disney Co.

    Wednesday November 9

    China CPI and PPI

    (10 a.m. ET) U.S. wholesale trade for September.

    Earnings include: ATS Automation Tooling Systems Inc.; Boyd Group Services Inc.; Brookfield Renewable Corp.; Canopy Growth Corp.; CGI Inc.; Choice Properties REIT; Crombie REIT; E-L Financial Corp.; Element Fleet Management Corp.; Granite REIT; IA Financial Corp. Inc.; Kinross Gold Corp.; Linamar Corp.; Manulife Financial Corp.; Northland Power Inc.; NuVista Energy Ltd.; Osisko Gold Royalties Ltd.; Pan American Silver Corp.; Power Corp. of Canada; Rogers Communications Inc.; Smart REIT; Stella-Jones Inc.; Summit Industrial Income REIT; TransAlta Corp.; Tricon Capital Group Inc.; Tourmaline Oil Corp.; Vermilion Energy Inc.; WSP Global Inc.

    Thursday November 10

    Japan machine tool orders

    (8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 5. Estimate is 220,000, up 3,000 from the previous week.

    (8:30 a.m. ET) U.S. CPI for October. The Street is forecasting a rise of 0.5 per cent month-over-month and 8 per cent year-over-year.

    (11:50 a.m. ET) Bank of Canada Governor Tiff Macklem speaks at the Public Policy Forum in Toronto on the evolution of Canadian labour markets

    (2 p.m. ET) U.S. treasury budget for October.

    Earnings include: Algonquin Power & Utilities Corp.; Altus Group Ltd.; Brookfield Asset Management Inc.; CAE Inc.; Canadian Tire Corp. Ltd.; CCL Industries Inc.; CI Financial Corp.; Definity Financial Corp.; Endeavour Mining Corp.; Exchange Income Corp.; Filo Mining Corp.; First Majestic Silver Corp.; InterRent REIT; Paramount Resources Ltd.; Perseus Mining Ltd.; Primo Water Corp.; Quebecor Inc.; Ritchie Bros Auctioneers; Saputo Inc.; Stantec Inc.

    Friday November 11

    Remembrance Day in Canada (stock markets open, bond markets closed)

    U.S. Veterans Day (stock markets open, bond markets closed)

    Germany CPI

    (10 a.m. ET) U.S. University of Michigan consumer sentiment for November (preliminary reading)

    Earnings include: Boralex Inc.; Emera Inc.; Hydro One Ltd.; Northwest Healthcare Properties REIT; Onex Corp.; Sprott Inc.