Product launches are festive occasions, but it’s rare to attend one so joyful that it moves the crowd to tears. And yet, a fleet of aviation honchos—Bombardier Inc. CEO Pierre Beaudoin, aerospace division CEO Guy Hachey, commercial aircraft president Mike Arcamone, Porter Airlines CEO Bob Deluce—all admitted that the takeoff last Sept. 16 of the first aircraft in Bombardier’s new CSeries line of planes had them choked up. “My heartbeat was going quite fast as I watched,” blubbered Hachey afterward, flashing a mile-wide, white-toothed smile. “I had lot of thoughts in my mind about how long we have been working at this, and how important it’s going to be for the future of the company.” … The CSeries has been designed from scratch and conceived with cutting-edge technology. It is without precedent: an ultra-lightweight, ultra-quiet, ultra-fuel-efficient commercial airliner that can reach near-transcontinental distances from a measly 4,000 feet of runway.
Is the new central-bank governor’s optimism warranted? … WHEN Mark Carney was governor of the Bank of Canada he made a habit of warning his compatriots that a day of reckoning was coming if they did not stop piling up debt. The central bank would not keep interest rates low forever. Eventually the overnight rate would rise from 1%, where it has been since 2010, putting pressure on indebted Canadians. ... Mr Carney is now grappling with Britain’s overleveraged consumers. His successor at the Bank of Canada, Stephen Poloz, has been delivering a cheerier message since he took over in June, even though household debt and house prices are at record levels (see chart). He has expressed confidence that Canadian consumers are doing the arithmetic in order to manage their debts, and looks forward to the day when exports and investment drive economic growth. Has the situation changed, or just the man?
The untold tale of Target Canada’s difficult birth, tough life and brutal death ... Fisher, 38 years old at the time, was regarded as a wunderkind who had quickly risen through the ranks at Target’s American command post in Minneapolis, from a lowly business analyst to leader of a team of 400 people across multiple divisions. Launching the Target brand in a new country was his biggest task to date. The news he received from his group that February afternoon should have been worrying, but if he was unnerved, Fisher didn’t let on. He listened patiently as two people in the room strongly expressed reticence about opening stores on the existing timetable. Their concern was that with severe supply chain problems and stores facing the prospect of patchy or empty shelves, Target would blow its first date with Canadian consumers. Still, neither one outright advocated that the company push back its plans. “Nobody wanted to be the one to say, ‘This is a disaster,’” says a former employee. But by highlighting the risks of opening now, the senior employees’ hope was that Fisher would tell his boss back in Minneapolis, Target CEO Gregg Steinhafel, that they needed more time. ... Nobody disagreed with the negative assessment—everyone was well aware of Target’s operational problems—but there was still a strong sense of optimism among the leaders, many of whom were U.S. expats. The mentality, according to one former employee, was, “If there’s any team in retail that can turn this thing around, it’s us.” ... Roughly two years from that date, Target Canada filed for creditor protection, marking the end of its first international foray and one of the most confounding sagas in Canadian corporate history. The debacle cost the parent company billions of dollars, sullied its reputation and put roughly 17,600 people out of work.
Part I: I would like to examine two areas where the U.S. really does have documentable advantages. They are both incredibly important, one especially for good times with thriving capitalism and the other as a protection against possible bad times in the future that I for one fear ... In a world in which most things continue to work well, or at least well enough, the U.S. has the advantage of simply being more entrepreneurial. More of us risk starting new enterprises than do others in developed countries. ... You can even be associated with several bankruptcies and still be a strong-running candidate for President! How unlikely that would be anywhere else. And if three times more of us charge at the Internet, medical research, or social enterprises than in other countries, then we do not have to be better. ... The list of our advantages in Canamerica, as we could call it, is a very long one. First, we are uniquely defensible and difficult to attack. We are well-armed and well-organized. Less obviously, perhaps, we are more than self-sufficient in food production, energy, and mineable resources.
Part II: The positive effects of low resource prices are underestimated. The U.S. and global economies are likely to do significantly better this year than recent opinions predict. The U.S. has plenty of spare capacity to grow above its longer-term limits. The biggest risk would be China’s GDP becoming much more disappointing. ... The U.S. and global markets do not look like they are in bubble territory. They can always suffer a regular bear market (and are almost in one now). But I still believe we will have to wait longer for the BIG ONE and that global equity markets will regroup once more. ... Currently ultra-low resource prices are not sustainable, particularly those of grains and oil. Oil producers need $65/barrel and rising to finance new oil exploration. Resource prices will inevitably rise and as they do they will reduce once again the growth rates of the global economy.
Her speech was punctuated by European brand names, which functioned as a kind of currency. A maid’s monthly wages, she said, were probably the price of a pair of Roger Vivier satin pumps. A night out can cost half a suède Birkin bag. On Weymi’s last birthday, in March, she’d spent more than two Fendi totes—around four thousand dollars—on drinks in less than an hour. ... The Chinese presence in Vancouver is particularly pronounced, thanks to the city’s position on the Pacific Rim, its pleasant climate, and its easy pace of life. China’s newly minted millionaires see the city as a haven in which to place not only their money but, increasingly, their offspring, who come there to get an education, to start businesses, and to socialize. ... The children of wealthy Chinese are known as fuerdai, which means “rich second generation.” ... President Xi Jinping has spoken of the need to “guide the younger generation of private-enterprise owners to think where their money comes from and live a positive life,” and the government recently held an educational retreat for seventy children of billionaires, who were given a crash course in traditional Chinese values and social responsibility. ... Moneyed people leave China for various reasons. Some are worried about pollution. Others want to secure a good education for their children. ... for affluent Chinese, the most basic reason to move abroad is that fortunes in China are precarious. The concerns go deeper than anxiety about the country’s slowing growth and turbulent stock market; it is very difficult to progress above a certain level in business without cultivating, and sometimes buying, the support of government officials, who are often ousted in anti-corruption sweeps instigated by rivals.
As global warming thaws the Arctic, Russia is leading the rush to exploit the region’s resources. In late 2013, on a platform in the Pechora Sea, Gazprom became the first company to produce oil offshore in the Arctic, after jailing 30 Greenpeace protesters and confiscating their ship. On the east side of Yamal a partnership led by another Russian company, Novatek, is building a giant terminal to liquefy gas and export it to East Asia and Europe by ice-breaking tanker—though over time there may be less and less ice to break. ... Russia is not alone. More than a fifth of the world’s conventional oil and gas that has yet to be discovered lies above the Arctic Circle, according to a 2008 estimate by the U.S. Geological Survey, and the region is rich in other minerals too. ... Given the hype on both sides of the argument, what’s striking is how patchy the Arctic rush actually is. Few companies have dipped their toes into Arctic waters, and fewer still are making a profit. Last fall Royal Dutch Shell abruptly abandoned its multiyear, seven-billion-dollar effort to extract oil from the Chukchi Sea off Alaska after drilling a single unpromising hole. Record-low oil prices likely contributed to the decision. So did the astronomical costs of operating in a region where infrastructure is sparse, distances are huge, and the weather remains horrific.
Not only were their parents indeed Russian spies, they were Russians. The man and woman the boys knew as Mom and Dad really were their parents, but their names were not Donald Heathfield and Tracey Foley. Those were Canadians who had died long ago, as children; their identities had been stolen and adopted by the boys’ parents. ... Their real names were Andrei Bezrukov and Elena Vavilova. They were both born in the Soviet Union, had undergone training in the KGB and been dispatched abroad as part of a Soviet programme of deep-cover secret agents, known in Russia as the “illegals”. After a slow-burning career building up an ordinary North American background, the pair were now active agents for the SVR, the foreign spy agency of modern Russia and a successor to the KGB. They, along with eight other agents, had been betrayed by a Russian spy who had defected to the Americans. ... Nearly six years since the FBI raid, I meet Alex in a cafe near the Kiev railway station in Moscow. He is now officially Alexander Vavilov; his brother is Timofei Vavilov, though many of their friends still use their old surname, Foley. ... “They showed us photos of our parents in their 20s in uniform, photos of them with medals. That was the moment when I thought, ‘OK, this is real.’ Until that moment, I’d refused to believe any of it was true,” Alex says. He and Tim were taken to an apartment and told to make themselves at home; one of their minders spent the next few days showing them around Moscow; they took them to museums, even the ballet. An uncle and a cousin the brothers had no idea existed paid a visit; a grandmother also dropped by, but she spoke no English and the boys not a word of Russian.
Twenty-five years after the first diamonds were found in Canada’s Northwest Territories, it’s still a game of hurry-up-and-wait. For every thousand grassroots exploration projects, only one becomes a mine. Snap Lake, one of three operating mines in the region, was shuttered by De Beers last year, a casualty of harsh geography and falling diamond prices. Government attempts to add production value with a cutting industry collapsed years ago; all that remains of “Diamond Row” in the territorial capital Yellowknife is a line of derelict buildings behind barbed wire. ... And yet the dream lives on. At a time when global miners are shedding assets, De Beers is about to open the largest new diamond mine in the world, Gahcho Kué, 280 kilometers (175 miles) northeast of Yellowknife. A little further north, Rio Tinto Group last year found—and just sold—the largest gem-quality diamond ever recorded in North America at its Diavik mine, the 187-carat Foxfire. Dominion Diamond Corp. last week agreed to extend the life of the neighboring Ekati mine beyond 2020.
The city, with its stunning views of the mountains and yacht-dotted harbor, has long been one of the world’s most expensive places to live but price gains have reached a whole new level of intensity this year. Low interest rates, rising immigration, and a surge of foreign money—particularly from China—have all driven the increases. ... After copious warnings over the last six months, including from the Bank of Canada, that price gains are unsustainable, the provincial government of British Columbia moved last week. Foreign investors will have to pay an additional 15 percent in property-transfer tax as of Aug. 2 and city of Vancouver was given the authority to impose a new tax on empty homes. ... Demand for luxury cars has risen alongside housing prices in Vancouver, with 1,100 high-end vehicles on the streets of Vancouver as of Dec. 31, 2015, almost double the 2009 count, according to the Insurance Corporation of British Columbia.
In short, FPAQ—the Federation of Quebec Maple Syrup Producers—is OPEC. Formed in 1966, the federation was tasked with taking a business in which few could make a decent living—the price went north to south with the quality of the yield, which went north to south with the quality of the spring—and turning it into a respectable trade. This was accomplished in the classic way: quotas, rules. You control supply, you control price. You limit supply, you raise price. Because Quebec makes 72 percent of the world’s maple syrup, it’s been able to set the price. As of this writing, the commodity is valued at just over $1,300 a barrel, 26 times more expensive than crude. ... By making syrup production seem like a good business instead of just an eccentric survivalist hobby, it has brought a great increase in production, much of it in the U.S. Just like OPEC, which, with its near monopoly, spurred the search for new sources. With oil, it’s the deep deposits reached only by fracking. With syrup, it’s forests in Vermont, New Hampshire, and especially New York State, which, Canadians tell you with a shudder, has three times more maple trees than all of Quebec’s maple farms combined. The French province produces 72 percent of the world supply, but if the Americans ever make the push to self-sufficiency, French Canada is cooked. ... nearly 540,000 gallons of syrup had been stolen—12.5 percent of the Reserve—with a street value of $13.4 million.
De Beers, the world’s biggest diamond company, marked the opening of its Gahcho Kué mine in September. ... the aim of extracting more than 12,000 carats (2.4kg) of diamonds each day. Gahcho Kué is an astonishing endeavour, the biggest new mine in the world in over a decade. De Beers has no plans for another. ... The diamond business gained its sparkle around 1866, when a farmer’s son picked up a glistening pebble on the bank of the Orange river in South Africa. For most of the next 150 years, De Beers would dominate the global market. Success depended on manipulated supply and skilfully cultivated demand. ... Much has changed since then. De Beers can no longer control the market. Though it is the biggest producer by value, it accounts for only a third of global sales, down from 45% in 2007. It faces many uncertainties, from synthetic diamonds to changing relationships with polishers and cutters. Its loosening grip is reflected in increased volatility: its sales fell 34% in 2015, before bouncing back by 30% last year. Meanwhile the source of the demand that drives sales—the link between diamonds and love—looks weaker than it used to. ... But one forecast seems solid: there will be fewer new diamonds. ... diamonds’ principal value has nothing to do with science. ... They are a “Veblen good”, as items that gain their value solely from their ability to signal status are named, after Thorstein Veblen, an economist who wrote about the spending of the rich.
The performing powerhouse, founded in 1984 in Quebec, now encompasses 10 “resident” shows in the U.S. and Mexico, including O, and eight traveling productions, which tour to 130 cities around the world. Even as traditional circuses continued a long decline—in January, after a run of 146 years, Ringling Bros. and Barnum & Bailey Circus announced that it would soon shut down—a stunning 10 million people saw a Cirque show last year. Its extravagant productions are famed for their mixture of daredevil acrobatics and lowbrow clown comedy, pop hits and New Agey compositions, and daring design. (O, for example, takes place in and above a 1.5-million-gallon pool of water.) But lately Cirque has branched out in unprecedented and potentially lucrative ways: There are plans to launch a theme park and a kids’ entertainment project, and to design an interactive NFL store in New York’s Times Square. There are—of course—plans to go big in China. ... The year before the acquisition, Cirque reportedly brought in $845 million in revenue. (By comparison, all the shows on Broadway combined brought in $1.37 billion last season.) ... sees Cirque as a way to play a bigger, counterintuitive trend: a yearning for live entertainment in a digital era.
Here are the facts: there were 5,400 properties on the market at the end of February, half of last year’s figure. That amounted to just one month of inventory—the time it would take to sell all available properties—compared with 5.6 months in Manhattan. Supply isn’t keeping up with demand. ... While Canada’s west coast city of Vancouver has grabbed international attention for its soaring prices in recent years, Toronto is now in the eye of the country’s housing hurricane. The price of an average house in Toronto and its suburbs rose 28 percent in February to C$875,983 from the prior year, the sixth straight month of above-20 percent growth. ... “Nothing is more bubbly right now than the Toronto housing market,” David Rosenberg