News Briefs

05/10/2022

'Making monsters of each other': Businesses fear impact of Quebec language law

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The Quebec Provinces flag, Canada. Canadian region banner brush style. Horizontal vector Illustration isolated on gray background.

MONTREAL - As Quebec's contentious language law heads closer to adoption, the province's business community is growing increasingly anxious about what it could mean for their bottom line, with some companies considering leaving entirely.

Known as Bill 96, the legislation would impose tougher language requirements on small businesses and companies in federally regulated industries, such as banking and telecommunications, as well as governments and schools. The bill is expected to pass before the legislature breaks for the summer.

On top of strengthening 1977's Charter of the French Language - the province's signature language law usually known as Bill 101 - the legislation would apply to tens of thousands of previously exempt businesses.

If it passed, companies with 25 employees or more would be subject to "francization'' - government certification that use of French is generalized in the workplace - down from 50 currently. The bill also assigns new powers to the French-language watchdog and sets tighter language rules for professional orders.

The cost for a roughly 50-employee company would range between $9.5 million and $23.5 million, according to estimates from the Canadian Federation of Independent Business. Expenses range from fees for translation and legal services to administrative burdens, such as creating a workplace assessment to ensure French permeates all corners of the company.

An internal or public complaint could trigger an investigation from the provincial Office quebecois de la langue francaise. The watchdog can also demand on its own initiative that a business between 25 and 100 workers form a francization committee, another expense for smaller companies.

Other provisions beef up existing protections of the charter.

One clause bars employers from demanding proficiency in a language other than French unless they can show the job demands it and that all reasonable avenues were explored to steer clear of the requirement. Currently, requiring another language as condition of employment is allowed only if "the nature of the duties requires such knowledge,'' Bill 101 states.

The high thresholds risk driving head offices from Quebec and hampering the province's export economy, trade associations say.

"Companies in Quebec have to be able to have bilingual employees and be able to service outside buyers in English,'' Michel Leblanc, CEO of the Chamber of Commerce of Metropolitan Montreal, said in a phone interview. "We want companies to be able to decide when they should hire bilingual people.''

On top of strengthening the prominence of French on signs and posters, the legislation also requires businesses to draw up employment contracts and other documents in French.

"That's not doable. We have companies in Quebec doing businesses with companies all over the world,'' Leblanc said, adding that French does need some special protections.

Amid a labour shortage in industries like fashion and foodservices, many stores increasingly look to students - including those from out of province or country - to staff counters and stock shelves, with the possibility that some will stay on and integrate post-graduation. Now that door will largely close, since many of those students do not speak fluent French, he said.

Outfits affected range from retail stores to small, international tech companies as well as big federal firms.

The language office estimates Quebec is home to about 20,000 businesses of between 25 and 49 workers.

Thousands more work for companies that fall under federal jurisdiction. Former Crown corporations such as Air Canada and Canadian National Railway Co. are already subject to the federal Official Languages Act, which requires them to provide services in English or French on request. But most federally regulated companies are not included in that 53-year-old legislation.

As of 2013, nearly 135,000 employees in Quebec worked at 1,760 federally regulated companies not subject to provincial or national language laws, according to a study by the federal Innovation, Science and Economic Development department. Now, all would be.

Even if those companies claim they are not beholden to the provincial legislation, a proposed federal law aims to ensure compliance.

Reintroduced in March after first being tabled last June, the Liberals' Bill 13 requires companies under federal jurisdiction that are not currently subject to the Charter of the French Language or the federal Official Languages Act to either submit to Quebec's rules on French in the workplace or to a parallel regime on track for passage in Ottawa.

Litigation is another potential drain on corporate time and accounts.

As it stands, incidents of non-compliance are worked out between the company and the watchdog, with negotiable compliance timelines. Bill 96 would change that process.

"Now any Quebec resident who feels that in an interaction with a business their rights under the Charter of the French Language have not been satisfied could make a claim for damages,'' said Alexandre Fallon, a partner at Osler law firm in Montreal.

"Even if an agreement is reached with the regulator, private litigation could still ensue.''

Customer service encounters, receipts, brochures, product packaging, menus and advertising could all form the basis for a case. "Businesses small and large are very worried,'' Fallon said.

"It upsets the environment of trust,'' added Sylvia Martin-Laforge, director general of the Quebec Community Groups Network.

Business groups ranging from the Quebec Retail Council to the Quebec Manufacturers and Exporters and the Council of Canadian Innovators are asking the government to soften its rules - particularly around francization - to offer supports to businesses that undergo it and to extend compliance deadlines.

But Giovanni Bisciglia, leader of the nascent Centrist Party of Quebec, which has applied to the province's chief electoral officer for authorization, questions whether Premier Francois Legault's government hears the concerns of anxious business owners.

"The anglophones are accusing the francophones, the francophones are accusing the anglophones. They're making monsters of each other and both claiming they're victims of each other,'' he said. "No one is communicating.''

-The Canadian Press

05/05/2022

Canadian shoppers shift to discount stores, No Name brand amid high inflation: Loblaw

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Canada's big three grocers say rising food prices are shaping shopping habits, with Loblaw Companies Ltd. the latest to offer insight into how people are saving money on their grocery bill amid soaring inflation.

Consumers are shopping for groceries more often, buying less with each visit and shifting to value-oriented stores as pandemic restrictions loosen and the cost of food increases, Loblaw said Wednesday as it reported its first-quarter results.

The grocery and drugstore retailer said its discount division, which includes No Frills and Maxi, posted strong growth in the quarter while demand for its in-house products surged.

Sales of Loblaw's No Name private label brand, with its distinctive yellow and black packaging, reached an all-time high, Loblaw chairman and president Galen G. Weston said.

"This is an indication of the Canadian consumers' steadily increasing focus on value,'' he said during a conference call.

His comments came after Metro Inc. highlighted a similar shift in shopping patterns last month.

"The inflationary picture is accelerating and that's having an impact on consumers,'' Metro president and CEO Eric La Fleche said in April. "There's a search for value and a shift to discount happening.''

Empire Co. Ltd., the parent company of grocery chains Sobeys, Safeway, FreshCo, said in March customers were buying more of the retailer's house brands and opting for larger formats that offer better value.

Canada's food inflation rate hit 8.7% in March, Statistics Canada said last month.

Loblaw also grappled with its own internal cost pressures during the quarter ended March 26, with fuel, shipping, ingredients and packaging prices all rising, Weston said.

Loblaw chief financial officer Richard Dufresne said those costs "pale in comparison to the cost increases coming on goods for resale.''

Weston said the retailer now has a "central procurement team'' to consolidate its buying and negotiations with vendors.

The team "evaluates the impact of cost inflation on the cost of a good and it allows us to negotiate with our vendor base,'' he said, adding that the company is careful about only accepting "real, justifiable cost increases.''

Loblaw was embroiled in a high-profile pricing dispute with Frito-Lay Canada in the quarter, which saw the maker of brands like Cheetos, Doritos, Lays and Ruffles pull its products from Loblaw stores. Both companies said last month they had mutually resolved the matter.

Meanwhile, Loblaw's drug business stood out in the quarter, driving a significant portion of sales and gross margin growth, the company said.

Loblaw's drugstores, which include Shoppers Drug Mart and Pharmaprix, recorded strong front-store and prescription sales.

"As consumer behaviour normalized, customers returned to our Shoppers beauty counters, generating excellent results in our higher-margin categories like cosmetics,'' Weston said. "Cough and cold has strengthened significantly, prescription counts increased and pharmacy services continued their multi-year expansion.''

Same-store sales at the company's pharmacies grew 5.2%, including prescription sales up 6.8 per cent and front store sales up 3.6%.

Food retail same-store sales rose 2.1%, benefiting from higher than normal eat-at-home levels.

Revenue for the quarter totalled $12.26 billion, up from $11.87 billion in the same quarter last year.

Loblaw reported its profit available to common shareholders totalled $437 million or $1.30 per diluted share for the 12-week period compared with $313 million or 90 cents per diluted share a year earlier.

The company said it will pay a quarterly dividend of 40.5 cents per share, up from 36.5 cents per share.

On an adjusted basis, Loblaw said it earned $1.36 per diluted share, up from an adjusted profit of $1.13 per diluted share a year ago.

Irene Nattel, an analyst with RBC Dominion Securities Inc., said in a client note Loblaw posted another quarter of strong and better-than-expected results, underscoring the company's "favourable momentum shift.''

-The Canadian Press

05/03/2022

Instacart adds Metro and Giant Tiger to app as it aims to spur easing pandemic demand

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Instacart logo on iPhone display

Grocery delivery startup Instacart is adding more Canadian stores to its app as it expands despite mounting competition, rising inflation and easing demand.

The San Francisco-based company said Tuesday it has partnered with more than 10 new companies in Canada including grocery and drugstore retailer Metro Inc. and discount store Giant Tiger.

"We've seen a lot of success with adding discount retailers, especially at a time where people are looking for better deals given inflation,'' Instacart CEO Fidji Simo said in an interview.

The company is now offering budget friendly alternatives to same-day delivery, including next-day delivery and pickup options, she said.

"It's actually really important for us that grocery delivery isn't seen as a luxury.''

The California-based company became a major player in the grocery industry during the pandemic. Public health measures intended to curb the spread of COVID-19 accelerated the move to online grocery and powered Instacart's rapid growth.

While the meteoric growth of online grocery orders has slowed as restrictions ease, Simo said the market is still ripe for further expansion.

"Online penetration for every other category of retail is about 30%,'' she said. "Grocery is still at 10% ... the growth potential is staring us in the face.''

The grocery delivery app allows customers to order groceries and other items from retail stores through its app.

It then uses independent contractors, which it calls shoppers, to gather and deliver orders. The gig worker model has drawn criticism from labour advocates who have accused the company of inadequate pay rates and poor working conditions.

Instacart also has part-time hourly workers that shop in stores, but don't deliver orders.

The company, which makes money by charging fees to customers and grocers, is also expanding the services it offers directly to retailers to help them improve both their in-store and online technology.

The Instacart Platform offers the technology the company developed for its own marketplace, including its ad platform, personalization and merchandising, and offers it directly to grocers to apply to their own online grocery services.

"Our goal is to grow retailers' businesses,'' Simo said, adding that Instacart's technology can propel the "digital transformation'' of the legacy brick-and-mortar grocery stores.

One of the first transactions Simo announced after taking over as CEO of Instacart last summer was the acquisition of Caper AI, a smart cart and smart checkout technology company.

The artificial intelligence-powered shopping carts are already in use in some Sobeys grocery stores.

Meanwhile, Instacart is also growing into so-called grocery adjacent categories with the addition of a pet shop and sports nutrition store, as well as multiple smaller businesses.

"It really rounds out the selection,'' Simon said. "We want to have the largest selection possible available to Canadians.''

-The Canadian Press

04/25/2022

Statistics Canada says retail sales edged up 0.1% in February

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OTTAWA - Retail sales edged higher in February as Canadians went shopping for new clothes and spent more filling up at the gas pumps.

Statistics Canada said Friday retail sales rose 0.1%t to $59.9 billion in February, while core retail sales - which exclude sales at gasoline stations and motor vehicle and parts dealers - added 1.4%.

However, in volume terms, retail sales fell 0.4% in February.

TD Bank economist Ksenia Bushmeneva said consumer spending is expected to remain robust in the near-term, supported by easing public health restrictions, significant pent-up demand and a healthy labour market.

"But higher prices and interest rates will begin to weigh on household budgets in the second half of the year, prompting consumers to tighten their purse strings,'' Bushmeneva wrote in a report.

"Retail sales may also see some weakening as consumption continues to shift away from goods and toward services, such as travel and hospitality.''

Sales in February were up in six of the 11 subsectors tracked.

Statistics Canada said sales at clothing and clothing accessories stores gained 15.1% for the month, while building material and garden equipment and supplies dealers rose 5.6%. Sales at gasoline stations added 6.2%.

Meanwhile, sales at motor vehicle and parts dealers fell 5.1%, the largest drop for the group since a 6.2% drop in December 2020. General merchandise stores saw sales drop 1.2%.

Looking ahead, Statistics Canada said its initial estimate for retail sales in March suggests a gain of 1.4% for the month, but cautioned the figure will be revised.

Nikita Perevalov, director of economic forecasting at Scotiabank, said a large part of the increase in March was likely due to high prices as the annual inflation rate for the month was 6.7%.

"High consumer prices point to a vulnerability at the heart of the Canadian economy - household budgets may not be able to withstand for long record increases in prices of food and energy, forcing weaker growth in spending on discretionary items,'' Perevalov wrote in a note to clients.

The Bank of Canada raised its key interest rate target by half a percentage point to 1% last week and warned more rate hikes are in the works as it looks to bring inflation under control.

The consumer price index in March posted its largest increase in more than 30 years as it rose 6.7% compared with a year earlier, a full percentage point higher than its year-over-year increase in February.

-The Canadian Press

04/11/2022

Metro workers reach new deal while strike at Sobeys distribution centre continues

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Metro Ontario inc. office in Etobicoke, Toronto, Canada. Metro Inc. is a Canadian food retailer operating in the provinces of Quebec and Ontario.

Workers at a Metro distribution centre in Ontario have voted in favour of a new deal while workers at a Sobeys warehouse in Quebec have rejected the grocer's latest offer.

More than 900 workers at Metro Inc.'s Toronto-area distribution centre ratified a new four-and-a-half-year collective agreement Friday, ending a one-week strike.

Unifor said Metro warehouse workers in Etobicoke will receive an average wage increase of 15.8% over the lifetime of the new deal.

The union said the new collective agreement also includes higher shift premiums for freezer work, a shortened wage progression to reach the top rate, improvements to pensions and benefits and no concessions.

"This collective agreement achieves the best maximum pay rate and fastest progression in the industry,'' Unifor Ontario regional director Naureen Rizvi said in a statement. "There is no doubt that it will raise the bar for warehouse workers across Ontario.''

Carmen Fortino, executive vice-president and division head for Metro in Ontario, said in a statement the company and the union reached a "fair and reasonable'' deal that maintains competitive working conditions for employees.

Meanwhile, 190 workers at a Sobeys distribution centre in Terrebonne, Que., remain on strike after turning down the grocer's latest offer.

Kim Bergeron, a lawyer representing UFCW Canada's Local 501, said workers rejected a tentative agreement Friday with 69 per cent voting against a proposed new deal.

Pay and benefits remain the key sticking point, she said.

Sobeys spokeswoman Claudine Leblanc said the company was ``surprised and disappointed'' that workers rejected the tentative agreement recommended by the bargaining committee.

"Our teammates in Terrebonne have one of the most comprehensive and competitive agreements in Quebec,'' she said.

Workers are currently paid wages of up to $30 an hour, and the proposed deal included salary increases on top of the that, Leblanc said in an email.

"We will continue to negotiate with the union representatives so we can reach a deal very soon,'' she said.

Sobeys has contingency plans in place to ensure customers continue to receive the same service and products at IGA stores across the province, Leblanc added.

-The Canadian Press

04/11/2022

MTY Food Group reports first quarter profit and revenue up from year ago

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MONTREAL - MTY Food Group Inc. reported its first-quarter profit rose compared with a year ago as its revenue also climbed higher.

The restaurant franchisor and operator says it earned $16.6 million or 68 cents per diluted share for the quarter ended Feb. 28, up from $13.4 million or 54 cents per diluted share a year earlier.

Revenue totalled $140.5 million for the quarter, up from $119 million.

MTY is the company behind more than 80 restaurant brands, including food court staples like Thai Express and Tiki-Ming, as well as many that are co-located with convenience and gas, such as Mr. Sub and Country Style. 

MTY CEO Eric Lefebvre says 75 new locations opened across MTY's network in the first quarter, making it the best first quarter in the company's history in terms of restaurant openings.

At the end of the quarter, MTY had 6,704 locations in operation, of which 89 were corporate and 6,615 were franchised.

-The Canadian Press