Today’s news: Trending business stories for January 29, 2024

The latest business news as it happens

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Flair Airlines owes $67 million in unpaid taxes, prompting federal seizure order

Court documents show Flair Airlines Ltd. owes Ottawa $67.2 million in unpaid taxes, prompting the federal government to obtain an order for the seizure and sale of the carrier’s property.

The money relates to import duties on the 20 Boeing 737 Max jetliners that make up the budget airline’s fleet.

In an emailed statement, Flair chief executive Stephen Jones says the Edmonton-based company has a deal with the Canada Revenue Agency to pay the taxes, and that it is “current with that plan.”

He says the Federal Court order obtained by the tax agency in November has no impact on the carrier’s operations, which have expanded over the past year and ramped up competition with rival airlines.

The order follows the repossession of four Flair planes last March after leasing manager Airborne Capital claimed that the company regularly missed payments over the preceding five months.

In response, Flair launched a $50-million court action against Airborne Capital and three other leasing firms, arguing that ongoing demands for payment from the four companies were “baseless.”

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Canada Revenue Agency spokeswoman Kim Thiffault says the agency cannot comment on specific cases (for confidentiality reasons), but that it may garnish revenues or seize assets as a last resort if suitable payment arrangements (with a company) cannot be made.

Read the full story.

— The Canadian Press

4:45 p.m.

Market close: TSX posts gain, U.S. stock markets also rise

stock chart

Canada’s main stock index rose as technology stocks helped lead broad-based gains despite weakness in energy, while U.S. markets also rose.

The S&P/TSX composite index closed up 74.78 points at 21,200.06.

In New York, the Dow Jones industrial average was up 224.02 points at 38,333.45. The S&P 500 index was up 36.96 points at 4,927.93, while the Nasdaq composite was up 172.68 points at 15,628.04.

The Canadian dollar traded for 74.39 cents U.S. compared with 74.35 cents U.S. on Friday.

The March crude oil contract was down US$1.23 at US$76.78 per barrel and the March natural gas contract was down 12 cents at US$2.05 per mmBTU.

The April gold contract was up US$8.50 at US$2,044.60 an ounce and the March copper contract was up three cents at US$3.88 a pound.

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The Canadian Press

4:30 p.m.

Lawyer urges B.C. Supreme Court to approve iPhone class-action settlement

A shopper compares two iPhone 15 models at an Apple Inc. store in Los Angeles, 2023.
A shopper compares two iPhone 15 models at an Apple Inc. store in Los Angeles, 2023. Photo by Jae C. Hong/THE CANADIAN PRESS/AP files

A lawyer for a group of Apple iPhone users whose devices allegedly slowed down after software updates says consumers would receive between $17.50 and $150 under a settlement agreement negotiated in a Canadian class-action lawsuit.

Michael Peerless, a lawyer for the class members, told a B.C. Supreme Court judge in Vancouver that the amounts paid out will depend on the number of valid claims received from those who can prove ownership of the phones that include several iPhone 6 and 7 models.

Peerless told Justice Sharon Matthews that similar litigation in the United States provided a “valuable road map” during settlement negotiations, which could see Apple pay out a maximum of about $14.4 million to class members in Canada.

He told the court that the claims process will be very “simple,” with an online and paper-based option for people to use if they bought devices that had slow performance and battery trouble issues.

Jill Yates, a lawyer for Apple, told the court the company has never admitted wrongdoing.

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The judge has reserved her decision on approving the settlement until Feb. 21, 2024.

The Canadian Press

3:55 p.m.

Trans Mountain pipeline expansion runs into technical issues that could delay completion

Workers lay pipe during construction of the Trans Mountain pipeline expansion on farmland in Abbotsford, B.C., 2023.
Workers lay pipe during construction of the Trans Mountain pipeline expansion on farmland in Abbotsford, B.C., 2023. Photo by Darryl Dyck/THE CANADIAN PRESS files

The company behind the Trans Mountain pipeline expansion says it has encountered technical issues which could mean a delay in the project’s completion.

In a statement on its website Monday, Trans Mountain Corp. says it needs additional time to determine the safest and most prudent actions for minimizing further delay.

It says the technical issues were discovered between Jan. 25 and Jan. 27.

Trans Mountain Corp. says it will not provide an interview.

The company says it is fully focused on working toward an anticipated in-service date in the second quarter of 2024.

The Trans Mountain pipeline expansion, which will carry oil from Alberta to the West Coast, had been expected to be complete by the end of the first quarter of 2024.

Find out more.

The Canadian Press

12:40 p.m.

Midday markets: TSX down in late-morning trading as U.S. stock markets mixed

midday markets chart

Canada’s main stock index was down in late-morning trading on losses in energy and financial stocks, while U.S. stock markets were mixed.

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The S&P/TSX composite index fell 59.51 points at 21,065.77.

In New York, the Dow Jones industrial average was down 20.16 points at 38,089.27. The S&P 500 index was down 0.75 points at 4,890.22, while the Nasdaq composite was up 26.12 points at 15,481.48.

The Canadian dollar traded for 74.33 cents US compared with 74.35 cents U.S. on Friday.

The March crude oil contract was down US$1.01 at US$77 per barrel and the March natural gas contract was down eight cents at US$2.09 per mmBTU.

The April gold contract was up US$7.50 at US$2,043.60 an ounce and the March copper contract was up two cents at US$3.87 a pound.

The Canadian Press

10:13 a.m.

Markets open: Wall Street rises ahead of big week for earnings, TSX down

A pedestrian uses an Apple iPhone
A pedestrian uses an Apple iPhone outside a store in San Francisco. Apple, is one among several of the Magnificent Seven tech giants, poised to report earnings this week. Photo by David Paul Morris/Bloomberg files

United States stocks rose Monday ahead of a week where Wall Street’s most influential stocks may show whether the huge expectations built up for them are justified.

The S&P 500 was 0.1 per cent higher in early trading. The Dow Jones Industrial Average was up 0.12 per cent, and the Nasdaq composite was 0.24 per cent higher.

Big Tech stocks are the main reason the S&P 500 has soared more than 35 per cent to a record since two autumns ago. A small handful of seven has been responsible for the majority of the index’s returns over that time, propelled by a furor around artificial-intelligence technology and expectations for continued dominance.

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Five members of that group, which have been nicknamed “the Magnificent Seven,” will report their latest quarterly profits this upcoming week: Apple Inc., Alphabet Inc., Inc., Meta Platforms Inc. and Microsoft Corp.

Because they’re so much more massive in size than almost every other stock, their movements pack much more weight on the S&P 500 and other indexes. They’ll need to meet analysts’ expectations for growth to justify their huge recent moves.

In Canada, the S&P/TSX was down 0.32 per cent.

— The Associated Press

9:24 a.m.

Gildan sets May 28 for shareholder meeting in ongoing battle over ousted CEO

Gildan sweaters on hangers
Some of the largest shareholders of clothing manufacturer Gildan Activewear Inc. are taking aim at the board for its decision to oust chief executive Glenn Chamandy. Photo by Graham Hughes/Bloomberg

Gildan Activewear Inc. has set May 28 for a shareholder meeting following a request by United States investor Browning West which is seeking to replace a majority of the company’s board of directors and bring back founder Glenn Chamandy as chief executive.

The Montreal-based clothing manufacturer also says it will challenge the validity of the Browning West special meeting request in a Quebec court.

Gildan alleges the fund broke U.S. antitrust rules when it increased its stake in the company to the point where it could request a shareholder meeting, something Browning West denies.

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The company has been embroiled in a fight over who should lead the company since it announced late last year that Chamandy would be replaced as chief executive by Vince Tyra.

Several Gildan shareholders, including the company’s largest, Montreal-based Jarislowsky Fraser, have sought to have Chamandy reinstated.

Browning West is asking Gildan shareholders to vote to remove eight Gildan directors including chair Donald Berg and replace them with its own nominees who would reinstate Chamandy.

— The Canadian Press

7:30 a.m.

China’s Evergrande ordered to liquidate in latest twist to property crisis

An Evergrande Group residential complex in China
A man walks past an Evergrande Group residential complex called Evergrande Palace in Beijing on Jan. 29, 2024. A Hong Kong court ordered the Chinese property giant to liquidate. Photo by Greg Baker/AFP via Getty Images

China Evergrande Group, the world’s most heavily indebted real estate developer, received a liquidation order from a Hong Kong court, setting off a daunting process to carve up the biggest casualty of a property crisis that’s upending the world’s second-largest economy.

The ruling on Monday from Hong Kong judge Linda Chan is the latest twist in a saga that saw Evergrande amass more than US$300 billion of liabilities during China’s debt-fuelled property boom, before turning into the poster child of a market bust that shows few signs of ending. The builder was valued at just US$275 million on Monday before trading in its shares was halted, down more than 99 per cent from its peak.

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Evergrande’s collapse is by far the largest in a crisis that has dragged down China’s economic growth and led to a record spate of defaults by developers. The liquidation will be a test case of the legal reach of Hong Kong courts in China, where most of Evergrande’s assets reside. Any new management will also need to navigate asset sales in an industry lacking liquidity and confidence.

The liquidation will be closely watched by global investors, who have pulled billions of dollars from mainland China in part due to concerns over an uneven playing field for foreign capital as President Xi Jinping tightens the Communist Party’s grip on the economy. Policymakers may have to balance competing priorities as they try to shore up investor confidence while ensuring unfinished homes get built and the financial system remains resilient to the property industry’s woes.

“The market will pay close attention to what the liquidators can do after being appointed, especially whether they can achieve recognition from any of the three designated PRC courts” under a 2021 arrangement between China and Hong Kong, said Lance Jiang, restructuring partner at law firm Ashurst. “The liquidators will have very limited powers of enforcement over onshore assets in mainland China if they cannot get such recognition.”

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— Bloomberg

Read the full story here.

7:30 a.m.

Stock markets before the opening bell

Stock markets, January 29, 2024

Markets opened the week on a cautious note as investors readied for central bank updates on the outlook for interest rates and braced for a deluge of earnings.

On Wall Street, equity futures contracts were steady after the S&P 500 closed out a third week of gains and finished Friday near its record high. Europe’s Stoxx 600 index held near the highest level since January 2022, supported by rallying oil majors as heightened Middle East tensions drove up crude prices. BP PLC, Shell PLC and TotalEnergies SE all gained about two per cent.

Brent and West Texas Intermediate crude touched their highest levels since November in intraday trading, before pulling back. The U.S. said Iranian-backed militants killed three service members and wounded others in a drone attack in Jordan, with President Joe Biden pledging to retaliate.

Middle East developments add to an already crowded diary of major events for investors, with a U.S. Federal Reserve policy decision Wednesday, one from the Bank of England Thursday, and U.S. payroll numbers Friday. There’s a blockbuster line-up of earnings too, with Apple Inc., Microsoft Corp. and Google parent Alphabet Inc. among those due to report.

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The S&P/TSX composite index closed up 0.11 per cent on Friday.

— Bloomberg

What to watch today

The Canadian Club of Ottawa hosts an event entitled: Innovation, Sustainability, and the Future of Work. Employment Minister Randy Boissonnault will deliver the keynote address.

Celestica Inc. reports earnings today.

Recommended from Editorial

Need a refresher on Friday’s top headlines? Get caught up here.

— Additional reporting by The Canadian Press, Associated Press and Bloomberg

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