By Tegan Valentine
Hello and welcome back to Top Five Friday Finds – the weekly series in which we share five of the business news stories that dominated the papers (and our conversations) this week.
Let’s start with a buzz-worthy deal from south of the border. This week, merger talks once again started up between Viacom Inc and CBS Corp. Formerly united under the Viacom banner, CBS and Viacom were separated over a decade ago by business mogul owner Sumner Redstone, who divided the media companies in a bid to generate additional wealth. While the separation worked well for CBS (the company has seen consistent growth, counting hits such as The Big Bang Theory and Survivor in its arsenal), Viacom has struggled, with the company plagued by ratings drops and box-office flops. This is not the first time reconciliation talks have occurred between the two companies (indeed, Redstone’s daughter tried unsuccessfully to bring the two companies together in 2016), and while critics of the transaction are still concerned that Viacom’s problems will burden CBS, many argue that with a new business plan (and CBS’s scale) Viacom’s banner brands (including MTV, VH1 and Paramount Pictures) could be poised for a resurgence.
It’s a bird? It’s a plane? No – it’s….an ultra low-cost airline! This week, WestJet Airlines began selling tickets for its new budget airline ‘Swoop’. The new carrier, which will remain completely independent from WestJet’s operations and branding, is based on the bargain model first made popular by European carriers such as RyanAir and EasyJet. Ultra low-cost airlines slash customer costs by ferrying cost-sensitive passengers between less desirable airports. The first wave of Swoop jets will send passengers between Hamilton ON and Abbotsford BC, Edmonton AB, Winnipeg MB and Halifax NS, with tickets ranging in price between $39 and $70. The new airline will begin operations summer 2018, and is a much needed addition to the Canadian sky’s. Canada is consistently ranked as one of the most expensive country’s to fly in, second only to Oman.
On Thursday Prime Minister Justin Trudeau announced that a planned pipeline that would take Alberta crude oil west to British Columbia for shipment should go ahead despite protests by the British Columbia government. The Kinder Morgan TransMountain expansion pipeline has plagued regulators and politicians alike since first being proposed in 2012. A $7.4 billion project, the pipeline would increase capacity from 300,000 barrels a day to 890,000 barrels a day on the existing TransMountain pipeline system, and provide Canadian oil produces with a much needed route to the B.C. coast and, in turn, the booming Asian market. The project has long had the backing of Canada’s petroleum produces and the Alberta government, but gaining the support of the British Columbia government has proven difficult. The British Columbia government first announced its discontent with the project in 2016, and implored the National Energy Board to reject Kinder Morgan’s proposal on the grounds that the company hadn’t provided an adequate spill prevention and cleanup plan. The Federal Government took the opposite stance, and announced its support of the project in late-2017. Trudeau’s announcement Thursday that “that pipeline is going to be built” was welcome news for Alberta’s oil producers, and while a final decision has not yet been made on the project, it is clear that the federal government sees the project as being ‘in the national interest’.
This morning, Canadian marijuana producer Aphria Inc announced a deal to sell it’s stake in Arizona based Copperstate Farms to Liberty Health Sciences for $20 million. The decision to divest in the American-based producer comes in the wake of the U.S. Department of Justice’s decision to revoke an Obama policy that discouraged federal prosecutors from pursuing marijuana-related crimes in states that had legalized cannabis. To recap, when the DoJ’s decision to change marijuana regulation was announced stock prices for marijuana producers both north and south of the Canadian boarder took a hit. Canada is slated to become a global leader in marijuana production, with many of the country’s cannabis producers looking to the USA as a potential market for consumption – and production. Aphria’s sale of its US assets shows that Canadian companies are concerned about the future of the industry, and are concerned about how changes in regulation will impact business.
And finally, yesterday marked the beginning of a new era for Canadian shoppers as PC Plus and Shoppers Optimum – two of the country’s most popular loyalty rewards programs – merged into single, new loyalty program (PC Optimum). The merger of the two loyalty point systems is the most recent stage of integration between Loblaws Companies Ltd. and Shoppers Drug Mart, which have slowly been amalgamating business practices since the grocery giant acquired the drug store chain. When the $12.4 billion acquisition of Shoppers was first announced in 2014, Canadian customers, and the Competition Bureau, were concerned that the acquisition would result in a lessening of competition in the retail sale of pharmaceutical and drugstore products across the country. Despite these concerns, the Bureau ultimately concluded that the transaction would be permitted to move forward (albeit, with a few short term restrictions).