B.C. businesses benefit from Bitcoin bull run

BC firms in bitcoin boom

While see-sawing volatility has always been part of Bitcoin, investor interest in the cryptocurrency has been consistent recently as its value flirts with levels as high as US$40,000.

It’s a trend working to the benefit of B.C. companies facilitating transactions.

As the cryptocurrency’s value soared in 2020, Vancouver-based Mogo Inc. (TSX;Nasdaq:MOGO) reported a 108% spike in Bitcoin accounts opened on the fintech company’s platform.

Mogo started as a fintech specializing in loaning money to young people through electronic transfers. Three years ago, shortly after Bitcoin’s 2017 bull run, Mogo launched its own Bitcoin products allowing users to buy and sell in real time.

While Bitcoin’s value dissipated after 2017, it began to surge again in 2020.

And by November of last year, Mogo reported a 135% monthly increase in the dollar amount traded on its platform. This came after the Vancouver fintech reported a 237% increase in Bitcoin accounts in the third quarter of 2020 compared with a year earlier.

Mogo president Greg Feller declined an interview request from BIV to discuss how the company has benefited from the most recent bull run – shares were trading at $5.07 to open 2021, up from $3.41 a year earlier, but in a statement he said the growing interest in Bitcoin is attracting new members to Mogo’s broader platform.

“While it’s early days for this asset class, we see Bitcoin as a great long-term opportunity to drive member growth, engagement with all our products, and ultimately member monetization,” he said.

In 2018, CEO Dave Feller – brother to Greg Feller – told BIV he likened Bitcoin to the “millennial version of digital gold” that users would like to invest in as they would a stock.

Entrepreneur Michael Vogel, the founder of Vancouver-based Netcoins Inc., said part of the renewed interest in the cryptocurrency can be attributed to yet another B.C. company.

Last spring, Canadian e-commerce giant Shopify Inc. (TSX:SHOP) revealed it would begin processing cryptocurrency payments via Vancouver’s CoinPayments Inc. (The company, which is now incorporated in the Cayman Islands, declined a request for comment.)

“People could now spend cryptocurrency on Shopify stores, which was huge,” Vogel said.

This development came as payments giant PayPal Holdings Inc. (Nasdaq:PYPL) was gearing up to facilitate Bitcoin transactions as well.

Vogel’s Netcoins also allows users to buy and sell bitcoins and other cryptocurrencies.

It got its start in 2014, around the time Vancouver was earning a reputation as a hotbed for Bitcoin activity.

The city was home to the world’s first Bitcoin ATM – one stationed inside a downtown coffee shop – and Vogel saw an opening to develop even more tools on the market for virtual currencies.

“We wanted to make it easy for people to buy Bitcoin in Canada, and it really wasn’t at that point,” said Vogel, who divested his remaining Netcoins assets in 2019 following its sale to another company.

He now serves as CEO and founder of Encore Ventures.

“The business model was pretty boring, but the tech behind it was really interesting,” Vogel said.


WestJet first to return 737 Max to Canadian skies after global grounding

WestJet's first Max flight

WestJet says it will operate the first commercial flight of the Boeing 737 Max in Canada since the aircraft was cleared to fly again in Canadian airspace.

The flight will take off from Calgary on Thursday and land in Vancouver, where company executives will hold a press event, WestJet says.

Starting Jan. 22, WestJet plans to fly the Max three times weekly between Calgary and Toronto.

The Boeing 737 Max was grounded in Canada for nearly two years following two deadly crashes that investigators said was caused by a faulty sensor system.

The Canadian government lifted its grounding order for the Max on Jan. 20 after approving a number of changes to the airplane's design, including allowing pilots to disable an alarm system found to be central to the crashes.

Max pilots will also be required to undergo additional training in flight simulators before they can operate the plane in Canadian airspace.

Aurora Cannabis lays off workers after signing new sales broker deal

Aurora lays off workers

Aurora Cannabis Inc. says it has laid off some workers after signing an agreement with an external sales broker.

The Edmonton-based cannabis company's spokeswoman Michelle Lefler confirmed the cuts but wouldn't disclose the number of staff impacted or what cities they were located in.

Lefler says the move was prompted by Aurora's recent decision to hire Great North Distributors Inc. to represent the pot company in sales activities across Canada.

She says the agreement had an immediate impact on some jobs, while other employees will remain with the company for a set time.

Despite the layoff, Lefler says Aurora will keep a sales leadership team to work closely with provincial partners and other key stakeholders.

Aurora laid off almost 1,000 workers last year after it closed some of its facilities to streamline its operations.


Central Mountain Air suspends service to Fort St. John

Fort St. John flights suspended

Central Mountain Air service in Fort St. John has been suspended through to March 1.

Officials confirmed the change due to the continued impacts of the COVID-19 pandemic on air travel. Fort Nelson service continues.

“With the current CoVid environment and its impact on demand, Central Mountain is evaluating a number of scheduled service routes as you would expect,” CEO Bob Cummings said.

CMA first suspended service last April during the first wave of the pandemic, and resumed in stages through the summer and fall.

“We want municipalities to continue to have access to essential medical and worker travel that keeps a base level of the economy functioning," Cummings said. "As well keeping a base level of service will enable recovery to occur much more effectively [with respect to] keeping the infrastructure and various associated groups functioning. We have been doing everything we can to try to continue service in an environment where virtually every flight is contributing to the debt/reducing cash available to the company.”

Local civic and business leaders met this week to discuss the pandemic’s impacts on regional air service, and draw government support for companies like Central Mountain Air that serve small, rural communities not covered by major airlines.

Air Canada and WestJet continue to operate commercial flights in Fort St. John to Vancouver and Calgary.

But companies like CMA are essential to maintaining regional connectivity across the north, said MLA Dan Davies. Davies said he and Opposition transportation critic Michael Lee will be lobbying Transportation Minister Rob Fleming for support.

“This is concerning. Many people in the region use CMA to attend medical or cancer care appointments in Prince George, especially during the winter months,” Davies said. “We are hopeful with pressure on the federal and provincial governments they can work with CMA to find a way forward.”

Ontario labour minister says 25 tickets issued in big-box store blitz

25 tickets in big-box blitz

Ontario's labour minister says 25 tickets were issued during a weekend inspection blitz of big-box stores that found the majority were following public health rules.

Monte McNaughton says the province ticketed stores for failing to enforce physical distancing and masking rules, and also for failing to have installed some plexi-glass barriers.

He says 242 stores were inspected over the weekend throughout the Greater Toronto and Hamilton Area.

McNaughton says a team of 50 inspectors, with the help of local bylaw officers, conducted the blitz.

The team found 76 contraventions of the rules, the majority of which were dealt with by issuing orders to improve.

McNaughton says the province will ramp up inspections of other workplaces in the coming weeks to ensure pandemic health measures are being followed.

He said that starting today, approximately 300 inspectors will begin to visit restaurants providing take-out meals, essential service businesses like gas stations, and farming operations to ensure rules are being followed.

McNaughton says overall, the inspections revealed that nearly 70 per cent of big-box stores were following the rules.

But the minister said after months of life in the pandemic, the compliance rates should be higher.

"This is truly disappointing," he said. "These corporations must do better. Shareholders have the responsibility to keep their workers and customers safe. I want businesses to know if they won't operate safely in this emergency, you won't operate at all."

Under the provincial rules, corporations can face $1,000 fines and workers can face fines of $750 for not following public health measures.

Meanwhile, York Region shared a list of retailers fined over the last week for violations of Ontario’s Reopening Ontario Act, among them major pharmacy and grocery locations.

Walmart, Shoppers Drug Mart, Sobeys and Costco locations are among those ticketed.

Ontario recently ordered people to only leave their homes for groceries, medical appointments, exercise and work that can’t be completed remotely.

Stores selling non-essential goods have been forced to temporarily close and operate solely through e-commerce and curbside pickups.

The Ministry of Labour, Training and Skills Development said it has conducted more than 34,000 COVID-19 related workplace inspections and halted unsafe work 55 times throughout the pandemic.

Bank of Canada keeps key interest rate target on hold

BoC holds key interest rate

The Bank of Canada says the national economy will go in reverse for the first quarter of 2021, hammering the hardest-hit workers again on the path to a recovery that rests on the rollout of vaccines.

Workers in high-contact service industries will carry the burden of a new round of lockdowns, which the central bank warns will exacerbate the pandemic’s uneven effects on the labour market.

Governor Tiff Macklem, in his opening remarks at a late-morning news conference, warned the first-quarter decline could be worse than expected if restrictions are tightened or extended.

As a result, the bank announced it is keeping its key interest rate on hold at 0.25 per cent, citing near-term weakness and the "protracted nature of the recovery" in its reasoning.

But the short-term pain is expected to give way to a brighter outlook for the medium-term with vaccines rolling out sooner than the central bank expected.

Still, the bank warns in its updated economic outlook that a complete recovery from COVID-19 will take some time.

Nor does the Bank of Canada see inflation getting back to its two-per-cent target until 2023, one year longer than previously forecast.

"There is clear reason to be more optimistic about the direction of the economy over medium-term. But we are not there yet," reads part of Macklem's opening statement.

"The resurgence in COVID-19 cases weighs heavily on the near-term economic outlook. And this underlines the ongoing need for extraordinary fiscal and monetary policies."

The bank’s latest monetary policy report, which every quarter lays out its expectations for economic growth and inflation, forecasts that COVID-19 caused the economy to contract by 5.5 per cent last year.

Despite an upswing over the summer and fall that may have spared the country from a worst-case economic scenario, the drive to a recovery will hit a pothole over the first three months of 2021.

The bank forecasts real gross domestic product will decline by 2.9 per cent in the first quarter of 2021 compared to the same period in 2020 before improving thereafter if severe restrictions start easing in February.

The bank is forecasting growth of four per cent this year, then 4.8 per cent next year, and finally 2.5 per cent in 2023.

Getting there will be like riding a roller-coaster as the bank warned that resurgence in COVID-19, or new, more virulent strains, could weigh down a recovery in one quarter before leading to strong upswing in the next.

Inflation may be equally rocky.

Gasoline prices, which have weighed down the consumer price index this year, will by March be “well above their lows of a year earlier,” the bank’s report said, even if prices hover around where they are now. That should significantly bump inflation, possibly pushing the headline reading to roughly two per cent in the second quarter.

The bump will even out over the rest of the year with the bank forecasting inflation for 2021 at 1.6 per cent. The outlook for subsequent years estimates 1.7 per cent in 2022 and 2.1 per cent in 2023.

Separately Wednesday, Statistics Canada reported the annual pace of inflation slowed in December as the consumer price index was up 0.7 per cent compared with a year earlier.

The agency also reported that the average last month of Canada's three measures for core inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was 1.57 per cent.

All the numbers in the bank’s lookahead rest on efforts to vaccinate Canadians by the end of the year without any hiccups in that timeline, which would mean broad immunity six months sooner than the bank previously assumed.

The bank says the shorter timeline should mean less scarring overall for the economy in the form of fewer bankruptcies and fewer workers out of jobs for long stretches, which makes it more difficult for them to get back into the labour force.

North American stock markets up in early trading, loonie climbs higher

Markets up in early trading

Gains the energy, technology and metals and mining sectors helped lift Canada's main stock index in early trading, while U.S. stock markets rose ahead of the inauguration of Democrat Joe Biden as president of the United States.

The S&P/TSX composite index was up 37.07 points at 17,994.44.

In New York, the Dow Jones industrial average was up 128.12 points at 31,058.64. The S&P 500 index was up 27.66 points at 3,826.57, while the Nasdaq composite was up 164.98 points at 13,362.16.

The Canadian dollar traded for 78.80 cents US compared with 78.52 cents US on Tuesday.

The March crude oil contract was up 71 cents at US$53.69 per barrel and the February natural gas contract was down seven cents at US$2.48 per mmBTU.

The February gold contract was up US$19.00 at US$1,859.20 an ounce and the March copper contract was little changed at US$3.63 a pound.

Shareholders give OK to West Fraser deal to buy Norbord, consolidating wood sector

West Fraser deal approved

Shareholders of West Fraser Timber Co. Ltd. and Norbord Inc. have approved a $4-billion all-stock deal that will marry two of Canada's big wood product producers.

Norbord chief executive Peter Wijnbergen, who will join West Fraser as president of of engineered wood, said in November that the combined company aims to be a “one-stop shop” for construction customers.

The combined company says it will operate as West Fraser with headquarters in Vancouver and a regional office in Toronto, with West Fraser shareholders owning 56 per cent of the company, and Norbord shareholders owning about 44 per cent.

Executives said when the deal was announced that the new West Fraser will have 10,000 employees.

The deal comes as lumber prices have hit record highs twice in the past six months, according to lumber statistics from RBC Dominion Securities Inc. analyst Paul Quinn.

Statistics Canada says annual pace of inflation slowed in December

Inflation rate slows

The annual rate of inflation slowed in December as the pace of rising food prices decreased and the cost of air travel compared with a year earlier fell, Statistics Canada said.

The agency said Wednesday the consumer price index was up 0.7 per cent in December compared with a year earlier, after posting a year-over-year increase of 1.0 per cent in November.

Prices rose in six of the eight major components on a year-over-year basis in December.

Food prices posted a year-over-year increase of 1.1 per cent in December compared with 1.9 per cent in November as the cost of fresh vegetables rose 1.1 per cent compared with 4.6 per cent in November. Prices for fresh fruit fell 6.0 per cent year over year.

Transportation prices were down 0.6 per cent as air transportation prices fell 14.5 per cent.

"Inflation is muted in Canada and still very much bearing the scars of the health and economic crisis," TD Bank senior economist James Marple wrote in a report.

"As the worst point in the crisis moves further into the rear-view mirror, price growth will pick up. Driven by rising energy prices, the headline rate is likely to hit two per cent by the second quarter of this year."

Statistics Canada said gasoline prices in December were down 8.5 per cent compared with a year earlier, but up 3.3 per cent compared with November as oil prices rose.

Excluding gasoline, the annual pace of inflation in December was 1.0 per cent compared 1.3 per cent in November. In British Columbia, it was 0.8 per cent, down from 1.1 a month earlier.

The average of Canada's three measures for core inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was 1.57 per cent for December, down from 1.67 per cent in November.

Netflix's big 4Q lifts video service above 200M subscribers

Netflix at 200M subscribers

Netflix’s video streaming service has surpassed 200 million subscribers for the first time as its expanding line-up of TV series and movies continues to captivate people stuck at home during the ongoing battle against the pandemic.

The subscriber milestone highlighted Netflix’s fourth-quarter results released Tuesday. The service added another 8.5 million subscribers during the October-December period, capping Netflix’s biggest year since its inception as a DVD-by-mail service in 1997. Netflix ended the year with nearly 204 million worldwide subscribers.

The fourth-quarter gains easily topped the projections of the roughly 6 million additional subscribers projected by Netflix's own management and Wall Street analysts, even as the company began rolling out price increases of 8% to 13% in the U.S. Netflix's stock surged by more than 12% extended trading after the latest subscriber numbers came out.

After upending the DVD-rental industry, Netflix introduced the then-revolutionary concept of streaming TV shows and films 14 years ago. At that time, its service had a mere 6 million subscribers.

The streaming service began to grow rapidly seven years ago when Netflix started producing its own shows and accelerated a worldwide expansion that now spans more than 190 countries. Since the February 2013 debut of its first original series, “House of Cards,” Netflix has attracted more than 170 million additional subscribers.

Netflix gained another 37 million subscribers last year, a 22% increase from 2019. Its stock fared even better, rising by 67% last year. The Los Gatos, California, company now boasts a market value of more than $220 billion.

For all its success, Netflix still faces challenges in the coming years from bevy of deep-pocketed rivals, with perhaps the most formidable posed by a more experienced and even larger entertainment company: Walt Disney Co.

After deciding to stop licensing its library to Netflix, Disney introduced its own video streaming service 14 months ago. The service, Disney Plus, has proved far more popular than anyone imagined, accumulating nearly 90 million subscribers in its first year, emboldening the company’s management to predict that it will boast as many as 260 million subscribers at some point in 2024.

“It is super impressive what Disney has done," Netflix co-CEO Reed Hastings said in Tuesday video discussion with investors. “It gets us fired up about increasing our membership and increasing our content production."

To retain and attract subscribers, Netflix already had been spending so much money on original programming that the company usually ends up shovelling out more cash than its video services brings in from its subscribers, although it has remained profitable under the accounting standards allowed in the entertainment industry.

The company earned $542.2 million on revenue of $6.64 billion in the fourth quarter, a relatively thin profit margin.

But Netflix finally stopped burning through cash last year, largely because government restrictions imposed during the pandemic curtailed the production of programming. Netflix posted a positive cash flow of $1.9 billion during 2020, the first time that has the company hasn’t had a negative cash flow for an entire year since 2011.

In another breakthrough, Netflix predicted it will no longer need to raise additional cash from lenders to help finance its original-programming budget. The company said it doesn't expect to experience the same drain on its cash as it has for most of the past decade, even as it ramps up production of its original programming again and gears up to release at least one original film per week on its service throughout this year.

Federal court strikes down major Trump climate rollback

Last-minute slap at Trump

In a last-minute slap at President Donald Trump, a federal appeals court struck down one of his administration’s most momentous climate rollbacks on Tuesday, saying officials acted illegally in issuing a new rule that eased federal regulation of air pollution from power plants.

The Trump administration rule was based on a “mistaken reading of the Clean Air Act,” the U.S. Court of Appeals for the District of Columbia ruled, adding that the Environmental Protection Agency "fundamentally has misconceived the law.” The decision is likely to give the incoming Biden administration a freer hand to regulate emissions from power plants, one of the major sources of climate-damaging fossil fuel emissions.

EPA spokeswoman Molly Block called the agency’s handling of the rule change “well-supported." The court decision "risks injecting more uncertainty at a time when the nation needs regulatory stability,” she said.

Environmental groups celebrated the ruling by a three-member panel of the Court of Appeals.

“Today’s decision is the perfect Inauguration Day present for America,'' said Ben Levitan, a lawyer for the Environmental Defence Fund, one of the groups that had challenged the Trump rule in court.

The ruling “confirms that the Trump administration’s dubious attempt to get rid of common-sense limits on climate pollution from power plants was illegal,'' Levitan said. "Now we can turn to the critically important work of protecting Americans from climate change and creating new clean energy jobs.”

A coalition of environmental groups, some state governments and others had challenged the Trump administration’s so-called Affordable Clean Energy, or ACE, rule for the power sector. The rule, which was made final in 2019, replaced the Clean Power Plan, the Obama administration's signature program to address climate change.

The court decision came on the last full day in office for the Trump administration. Under Trump, the EPA rolled back dozens of public health and environmental protections as the administration sought to cut regulation overall, calling much of it unnecessary and a burden to business.

Trump, who campaigned in 2016 on a pledge to bring back the struggling coal industry, repealed the Obama administration’s plan to reduce emissions from coal-fired plants that power the nation's electric grid. The Clean Power Plan, one of President Barack Obama’s legacy efforts to slow climate change, was blocked in court before its 2017 repeal.

The Trump administration substituted the Affordable Clean Energy plan, which left most of the decision-making on regulating power plant emissions to states. Opponents said the rule imposed no meaningful limits on carbon pollution and would have increased pollution at nearly 20% of the nation’s coal-fired power plants.

Market forces have continued the U.S. coal industry’s yearslong decline, however, despite those and other moves by Trump on the industry’s behalf.

Andrea McGimsey, senior director for Environment America’s “global warming solutions” campaign, said Trump's “Dirty Power Plan” was "clearly a disastrous and misconceived regulation from the start. As the Trump administration leaves office, we hope this ruling will be reflective of a much brighter future'' for renewable energy such as solar and wind power.

Wyoming Sen. John Barrasso, the top Republican on the Senate energy panel, denounced “activist judges” on the appeals court who "seem intent on clearing the decks for the incoming Biden administration to issue punishing new climate regulations'' that he said will shut down power plants and raise energy costs.

But Rep. Kathy Castor, D-Fla., chairwoman of the House Select Committee on the Climate Crisis, called the ruling a timely rejection of Trump's effort to roll back the Obama-era Clean Power Plan.

“It looks like we’re kicking off a new era of clean energy progress a day early,” Castor said. "It’s almost poetic to see our courts vacate this short-sighted and harmful policy on Trump’s last full day in office.''

GM teams up with Microsoft on driverless cars

GM teams up with Microsoft

General Motors is teaming up with Microsoft to accelerate its rollout of electric, self-driving cars.

In the partnership announced Tuesday, the companies said Microsoft’s Azure cloud and edge computing platform would be used to “commercialize its unique autonomous vehicle solutions at scale.”

Microsoft joins General Motors, Honda and other institutional investors in a combined new equity investment of more than $2 billion in Cruise, bringing its valuation to about $30 billion. Cruise, which GM bought in 2016, has been a leader in driverless technology and got the go-ahead from California late last year to test its automated vehicles in San Francisco without backup drivers.

Auto companies have been joining forces and bringing technology firms on board to try to spread out the enormous costs -- and by nature, risks -- of developing self-driving and electric vehicles.

Honda is in on the Cruise project with GM, Volkswagen and Ford have teamed up with Pittsburgh autonomous vehicle company Argo AI, and Hyundai joined with Fiat Chrysler last summer in a deal to use Waymo’s driverless car technology.

Toyota and Uber are also working together, while Amazon skipped over the automaker part of the equation and last summer bought self-driving technology company Zoox, which is developing an autonomous vehicle for a ride-hailing service.

Mass adoption of driverless vehicles — and profits — are still a ways off, said industry analyst Sam Abuelsamid of Guidehouse Insights.

“The reality is that the automated driving landscape is taking much longer to mature that had been anticipated a few years ago,” Abuelsamid said. “It's probably going to be mid-decade before we start to see significant volumes of these vehicles.”

Abuelsamid added that the importance of adding a company like Microsoft to the mix is its cloud computing power and the ability to analyze data from the vehicles to improve the technology.

“Microsoft is a great addition to the team as we drive toward a future world of zero crashes, zero emissions and zero congestion,” said GM Chairman and CEO Mary Barra. “Microsoft will help us accelerate the commercialization of Cruise’s all-electric, self-driving vehicles and help GM realize even more benefits from cloud computing as we launch 30 new electric vehicles globally by 2025 and create new businesses and services to drive growth.”

General Motors has been aggressively revamping its image, saying the industry has reached a history-changing inflection point for mass adoption of electric vehicles. The 112-year-old Detroit automaker this month unveiled a new corporate logo to signify its new direction as it openly pivots to electric vehicles. It wants to be seen as a clean vehicle company, rather than a builder of cloud-spewing gas-powered pickups and SUVs.

GM scrapped its old square blue logo for a lower case gm surrounded by rounded corners and an ‘m’ that looks like an electrical plug.

Shares in GM jumped more than 9% in afternoon trading, to $54.58.

More Business News

Data from CryptoCompare
Castanet Proud Member of RTNDA Canada
Press Room