Jan 15

Bank of Montreal to cut more than 1,800 jobs

TORONTO – The Bank of Montreal said Wednesday it is cutting about 1,850 positions from its workforce as consumers shift more of their banking online and technological advancements allow it to digitize some of its operations.

There were 46,166 full-time equivalent employees at the bank (TSX:BMO) as of the second quarter, a decline of 616 employees from the previous quarter.

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The lender said it will trim its head count by an additional four per cent, which amounts to roughly 1,846 positions, as it took a $132 million restructuring charge relating to severance costs for employees.

“The underlying activity that drives the charge really relates to the increased use of technology in our business,” BMO chief financial officer Thomas Flynn said during a conference call to discuss the bank’s quarterly earnings.

“And that’s true both on the customer-facing side, where customers are increasingly doing things in a digital way – either mobile or online – but also in terms of how we use technology to drive efficiency in our business.”

READ MORE: Just shy of $1B: Loan losses trim BMO’s Q2 profits

BMO (TSX:BMO) was the first of the big Canadian banks to report its second-quarter earnings results. CIBC (TSX:CM), Royal Bank (TSX:RY) and TD Bank (TSX:TD) will follow on Thursday, and Scotiabank (TSX:BNS) will wrap up the earnings parade next week.

The bank said its second-quarter profit slipped three per cent as it set aside more money for bad loans to the oil and gas sector, in addition to feeling the brunt of the restructuring costs.

It reported net income of $973 million during the quarter or $1.45 per share, down from $999 million or $1.49 per share, during the same period last year.

Restructuring charges have emerged as a common theme among Canada’s biggest banks in recent quarters, as the lenders look to reduce costs and digitize certain functions in response to a tough economic environment and changing consumer behaviours.

READ MORE: Nearly 40% of Canadian homeowners struggle to pay monthly bills, survey finds

“The banks are responding to a very difficult loan growth and revenue growth environment by getting a lot more aggressive with expenses,” said Edward Jones analyst Jim Shanahan.

“Ultimately, this is really bad for financial services industry employment in the greater Toronto market.”

Shanahan added that other banks could also report similar restructuring charges – if not this quarter, then perhaps in the second half of the year.

“I don’t think this is over,” he said.

Despite the fact that BMO increased its provisions for credit losses to $201 million during the quarter ended April 30, up from $161 million a year ago, Shanahan said he’s still concerned that the bank isn’t setting aside enough money for bad oilpatch loans.

“I’d still argue that outstanding reserves aren’t really adequate relative to this large and growing oil and gas exposure that they have,” he said.

On an adjusted basis, BMO earned $1.152 billion or $1.73 per share, up from $1.146 billion or $1.71 per share a year ago. That includes a $79 million writedown of an equity investment. Excluding the writedown, the bank said its adjusted net income was up seven per cent.

Revenue increased to $5.10 billion from $4.53 billion during the second quarter of last year.

BMO also announced its quarterly dividend will go up by two cents to 86 cents per share, effective Aug. 26.

Jan 15

Premier Rachel Notley rebuts privacy concerns on Alberta carbon tax

EDMONTON – Premier Rachel Notley is dismissing opposition accusations that her NDP government’s carbon tax bill contains invasive and arbitrary rules on search and seizure.

Notley told the house Wednesday that Bill 20 contains rules surrounding search warrants that are commonplace in Canada, and she accused the Wildrose party of fomenting fear.

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    “The opposition is taking language that has appeared in government legislation provincially and federally for years and they’re suggesting that we invented it to create a new right that quite frankly doesn’t exist,” said Notley.

    “If that’s not fear mongering, I really don’t know what is.”

    Bill 20, introduced Tuesday, is designed to give Notley’s government the legal power to hike taxes on heating bills and gas at the pumps to fund its new multibillion-dollar carbon levy, starting in 2017.

    READ MORE: Alberta brings in carbon levy legislation, estimates higher cost to families

    Gas prices are to go up by 4.49 cents a litre next year and to 6.73 cents a litre in 2018. Diesel prices will rise by 5.35 cents a litre next year and 8.03 cents a litre the year after that.

    Farmers, for example, will be exempt from the carbon gas price hike on top of the 9 cents a litre discount they already receive under the Alberta farm fuel benefit.

    The discounted farm gas is restricted to vehicles related to farm activity.

    Farmers need to obtain permits and cannot use the discounted gas for off-farm pursuits, such as recreational vehicles.

    READ MORE: How much is this carbon tax going to cost me?

    Under Bill 20, officials who believe there are breaches of the levy can get a search warrant to go on properties, check fuel tanks, vehicles, buildings and computer hard drives.

    If they feel that someone is at immediate risk of harm or evidence might be destroyed they can proceed without a search warrant, but a search warrant or the owner’s permission is needed to get into someone’s home.

    Wildrose critic Nathan Cooper told the house that Notley is violating the sanctity of property and privacy that she once fought for in opposition.

    “Surely the premier would agree that any legislation that gives the government the right to enter virtually any property without a warrant is a step too far,” said Cooper.

    Outside the house, Progressive Conservative Leader Ric McIver said he will fight to amend or remove the search provisions in the bill.

    “It’s very offensive and it’s something that needs to be fixed,” said McIver.

    Bill 20 fulfils a promise made by Notley to bring in a program to fight climate change and give Alberta more credibility on the international stage when it fights for oil and gas infrastructure such as pipelines.

    READ MORE: Alberta to implement carbon tax in climate change policy

    The government estimates the levy will cost the average family $400 or more a year in direct and indirect costs, with much of that rebated to households in the middle and lower-income bracket.

    The fund, along with levies on large industrial emitters, is expected to bring in more than $9 billion to the government over the next five years to fund green projects such as expanded public transit.

Jan 15

Smoking ban for Montreal’s restaurant terraces goes into effect

MONTREAL – As of Thursday, smokers will have to butt out on Montreal’s restaurant terraces and other public areas as new rules come into effect in Quebec.

READ MORE: Quebec anti-smoking groups want tougher legislation

The new law was unanimously adopted last November in the National Assembly.

READ MORE: Exploding e-cigarettes? Here’s what Canadians need to know

In addition to terraces, smoking is banned in:

cars carrying children under the age of 16playgrounds, campgrounds and sports fieldscommon areas of buildings with two to five residential unitsday cares, preschools, elementary and high schools

WATCH: Anti-smoking laws in Quebec

Quebec tables e-cigarette bill

01:57

Quebec tables e-cigarette bill

02:19

Anti-smoking groups urge government to regulate e-cigarettes

02:35

Smoking Ban



The law also bans the use of e-cigarettes and vapours.

READ MORE: Quebec tables bill targeting e-cigarettes, smoking on patios

Anyone caught breaking the law could be fined $250 to $750, and $500 to $1,500 for repeat offenders.

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  • Quebec tables bill targeting e-cigarettes, smoking on patios

  • Quebec anti-smoking groups want tougher legislation