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TORONTO — Mounting debts and a challenging retail market are forcing Payless ShoeSource Canada Inc. to shutter all of its North American stores by May.
The Kansas-based discount footwear retailer said Tuesday that it will soon file for creditor protection in Canada, making way for liquidation sales at the 248 locations it owns in the country.
Kelowna has one Payless ShoeSource store that is located in Orchard Park Shopping Centre, and Vernon’s is in Village Green Mall. A call to the Kelowna store on Tuesday was directed to the company’s head office in Kansas, but it is not granting interviews.
The move comes just after Payless filed for bankruptcy in the U.S. and after Ohio-based shoe brand DSW Inc. shut down its Town Shoes Ltd. brand and the 38 stores it had in the country, saying the “competitive landscape for mid-luxury, mall-based footwear has dramatically changed, comparable sales have deteriorated consistently and generated significant operating losses.”
Payless, which was founded in 1956 and previously filed for bankruptcy in 2017, has faced a similar market, revealed its chief restructuring officer Stephen Marotta in a press release, where he said the brand had tried to rejig its operations to no avail.
“The challenges facing retailers today are well documented, and unfortunately Payless emerged from its prior reorganization ill-equipped to survive in today’s retail environment,” said Marotta, who joined the company in January.
“The prior proceedings left the company with too much remaining debt, too large a store footprint and a yet-to-be realized systems and corporate overhead structure consolidation.”
Documents filed with the Ontario Superior Court on Tuesday show the company’s Canadian operations, which employ about 2,400 workers, had an oversupply of inventory as recently as this winter and was forced to sell merchandise at steep markdowns.
The documents said the company failed to pay February’s rent for 220 stores it owns in Canada and reported an operating loss of more than US$12 million last year.
Marotta said in the filings that the company has been unable to integrate its physical stores with a digital offering. Only 200 stores are equipped with such a service, he said, leaving Payless “unable to keep up with the shift in customer demand.”
As a result, he said Payless will begin closing its 2,500 North American stores at the end of March, though some will be open until the end of May while the company conducts liquidation sales.
SECHELT, B.C. — Residents of an upscale neighbourhood on B.C.’s Sunshine Coast will officially be barred from returning to their dream homes today.
Sinkholes throughout the subdivision have prompted the District of Sechelt to issue evacuation orders covering 14 properties.
The homes, with views overlooking Sechelt Inlet, are similar to others in a nearby subdivision valued at over $1 million, although the BC Assessment Authority values most of the buildings in the Seawatch subdivision at zero.
An engineering report issued to the district says future sinkholes or landslides within the subdivision could damage infrastructure or buildings, and injury or death are possible consequences.
The district has informed residents by email that fences around the subdivision will be locked Friday afternoon and only RCMP and firefighters will be permitted inside after that.
A statement issued by the district says Concordia Seawatch Ltd. designed, built and sold the subdivision, despite engineering reports as early as 2006 describing the development of sinkholes.
VICTORIA — British Columbia residents can expect to pay over eight per cent more on their BC Hydro bills over the next five years.
The government says the first increase of 1.8 per cent will be implemented April 1, if the B.C. Utilities Commission approves the added expense.
The announcement comes after a report commissioned by the NDP government says BC Hydro customers will pay $16 billion over the next two decades because the Crown utility was pressured by the former Liberal government to sign contracts with independent power producers.
The report says the Liberals manufactured an urgent need for electricity but restricted BC Hydro from producing it, forcing the utility to turn to private producers and sign long-term contracts at inflated prices.
Former B.C. Treasury Board director Ken Davidson authored the study, which estimates the cost to the average residential BC Hydro customer will amount to about $4,000 over the next 20 years, or about $200 per year.
Davidson’s report recommends all future energy purchases be made at market rates and finds BC Hydro must be allowed to meet supply obligations through a reasonable level of market trading, rather than by generating all electricity within the province.
The government launched a two-phase review of BC Hydro last June in an effort to identify cost savings at the utility.
Energy Minister Michelle Mungall says Davidson’s report also concludes the agreements forced upon BC Hydro were mainly with run-of-river producers, whose power is primarily available during spring run-off, when B.C. doesn’t require it.
“B.C. didn’t benefit. BC Hydro customers didn’t benefit. A small number of well-placed independent power producers benefited, and customers were stuck with a 40-year payment plan,” Mungall says in a news release.
Government and BC Hydro staff warned the former Liberal administration against requiring lengthy contracts with independent producers, but the advice was rejected, the minister says.
“As a result, these contracts have already cost customers $3.2 billion and are set to cost billions more over the next two decades,” she says.
B.C.’s construction workers should see pay raises of more than 10 per cent over the next two years.
The estimate comes from members of the Independent Contractors and Business Association in its annual wage and benefits survey.
The survey of 1,000 construction companies says they’ll give workers an average pay raise of 4.8 per cent this year and 5.3 per cent in 2020.
Association president Chris Gardner says the construction industry remains strong with just over half of those companies expecting more work in 2019 than they did the year earlier.
VICTORIA — The British Columbia government is promising to tackle cellphone costs, ticket scalpers, money laundering loopholes and poverty in a throne speech that also addresses an unfolding scandal at the legislature.
The province’s minority NDP government said Tuesday that making life more affordable will be the hallmark of its initiatives and legislation in the coming months.
“Affordability remains the biggest challenge facing B.C. families,” said Lt.-Gov. Janet Austin, who read the throne speech. “Many people are working two or three jobs, commuting further for work, and spending less time with their families, just to make ends meet.”
Premier John Horgan said the government’s elimination of Medical Services Premiums by January 2020 amounts to the largest middle-class tax cut in a generation, saving families about $1,800.
Opposition Liberal Leader Andrew Wilkinson said he has grave concerns about the government’s direction, especially when its throne speech barely mentions the economy or creating good jobs.
“The government says people are working two and three jobs and still can’t get ahead,” he said.
Green Leader Andrew Weaver, whose three elected members of the legislature have an agreement to support the NDP minority, said the government offered a laundry list of populist issues, but no real future focus.
“What was really missing was a vision,” he said. “A vision for a prosperous future grounded in innovation.”
The government will continue its freeze on ferry fares on major routes and keep discounts on secondary and northern ferry routes for a second consecutive year, Horgan said at a news conference.
“We’re going to focus on a whole host of other economic activities,” he said. “When we invest in schools, in hospitals, in our kids, we’re making investments in our economy.”
The details of the government’s long-awaited poverty reduction strategy will be contained in next week’s budget, Horgan said.
The government passed legislation last year to cut B.C.’s overall poverty rate by 25 per cent and the child poverty rate by 50 per cent over the first five years of the plan.
Other items in the government’s political agenda include rules to prevent the unfair resale of concert tickets and tabling legislation that makes B.C. the first province in Canada to implement the United Nations Declaration on the Rights of Indigenous Peoples.
“For too long the social justice elements of reconciliation have been ignored and the economic benefits to everyone have long been forgotten,” said Horgan.
Horgan said the government believes there is a need to provide greater transparency in cellphone billing and it is promising to advocate for more affordable mobile phone options.
“For us it’s a consumer protection issue,” said the premier, who acknowledged B.C. will have to work with the federal government on cellphone cost issues.
The throne speech stated reforms will be implemented as well to restore trust in the legislature after two top officials in the legislature were suspended over allegations of spending abuse.
NDP house leader Mike Farnworth said earlier the government will work to develop tighter checks on all officials at the legislature to ensure strict spending and reporting rules.
Clerk of the house Craig James and sergeant-at-arms Gary Lenz have denied any wrongdoing in response to a report detailing allegations against them by Speaker Darryl Plecas.
The government said it also plans dig into the structural causes of money laundering, closing legal and regulatory loopholes that allow for the illegal operation.
Two separate investigations are underway into the issue and Horgan said he would wait to read those reports before deciding if a public inquiry is necessary.
“I’m committed to making sure we get to the bottom of this,” he said.
A snow storm that disrupted travel on Vancouver Island also wiped out traditional ceremonies at the B.C. legislature Tuesday associated with the throne speech.
The usual military honour guard, ceremonial cannon salutes and a performance by the band from nearby Canadian Forces Base Esquimalt didn’t take place because of the weather.
But Austin still received a red carpet welcome to the legislature.
VANCOUVER — Coastal GasLink must submit a notice of construction at least 48 hours before it starts work under its permit to build a pipeline that is opposed by some members of the Wet’suwet’en First Nation, the B.C. Oil and Gas Commission said.
The commission has warned the Calgary-based company after it received complaints from the Office of the Wet’suwet’en that alleged that Coastal GasLink engaged in construction without an archaeological impact assessment and also destroyed traplines and tents.
A letter from the commission dated Thursday says Coastal GasLink didn’t submit the required notification on Jan. 22.
Hereditary Chief Na’Moks said the 48-hour notice won’t help because the process isn’t being followed.
“There is no consultation with us,” he said.
The ideal step would be to go back to the drawing board and talk to the proper rights and titles holders, he said, adding that it should be the province and federal governments consulting with the Indigenous people, not industry.
In another statement the commission said the archaeological assessment report was reviewed and accepted by the province’s archaeology branch in September 2016, and that Coastal GasLink has met the requirements of its permit.
Coastal GasLink is building a natural gas pipeline from northeastern British Columbia to a liquefied natural gas export facility at Kitimat, a $40 billion project.
Wet’suwet’en hereditary chiefs oppose the pipeline, setting the stage for the arrests of 14 people at a blockade last month as RCMP enforced a court injunction obtained by Coastal GasLink.
On Thursday, the provincial government said it is undertaking a process with the Office of the Wet’suwet’en focused on First Nation’s title, rights, laws and traditional governance throughout their territory.
Na’Moks said reconciliation should be led by the Indigenous people and not by industry or an elected official.
VANCOUVER — Interfor Corp. says the company has increased lumber shipments from Canada to China as a result of tariffs imposed on its U.S. production.
“We’ve seen a marked increase in volume from Canada,” said Barton Bender, vice-president of sales at Interfor on an earnings conference call Friday.
“We’re still active on some products in the South to China. We’ve tried to keep our shipments fairly consistent to that market. So the combination of the two, we think Canada is a net benefactor of those tariffs. And our volumes have shown so.”
The increased shipments from Canada come after China imposed retaliatory tariffs of up to 25 per cent on some U.S. goods last year, as the world’s two biggest economies continue with tense trade talks.
The ramp-up in Canadian exports across the Pacific come despite shipping costs that are roughly 50 per cent higher than from the southern U.S., Bender said.
Interfor, along with other Canadian forestry companies, has invested in U.S. lumber production in recent years as they faced log supply issues in B.C. and softwood tariffs on exports to the U.S.
The constraints on B.C. operations, along with falling prices, pushed Interfor to curtail some B.C. capacity in the fourth quarter, said company CEO Duncan Davies on the call.
“The decision to curtail operations in the B.C. Interior in the fourth quarter was taken partly in response to the drop in sales returns and partly in response to the rapid increase of log costs in the region during the second half of the year.”
The industry has been on a rollercoaster of prices in the past year as they spiked to record highs last summer before plummeting in the fourth quarter in part over U.S. housing market concerns.
Elevated prices in the first half of the year helped lead to “the best year in Interfor’s history” from a financial perspective, Davies said.
The company earned $112 million or $1.60 per share for 2018, compared with $97 million or $1.39 per share a year earlier.
Fourth-quarter results came in at a loss of $13.2 million or 19 cents per share, compared with earnings of $36.2 million or 52 cents per share for the same quarter in 2017.
The adjusted fourth-quarter loss was 29 cents per share, worse than the 20-cent loss expected by analysts according to Thomson Reuters Eikon.
Interfor’s shares were trading down 4.9 per cent on the Toronto Stock Exchange in mid-afternoon trading.
VICTORIA — A review of legal cases involving B.C.’s public insurer says despite public perception, the agency isn’t lowballing claimants in its settlement offers.
The review conducted by legal counsel in the Ministry of the Attorney General was released Wednesday and says the Insurance Corporation of British Columbia is running a “very sound” legal department.
It says the cases reviewed do not validate “whatsoever” longtime criticism that ICBC makes inappropriately low settlement offers with the effect of driving claimants to retain lawyers and then unnecessarily pushing lawsuits to trial.
Instead, the review says the longer a claim takes to reach a resolution, the more it costs, and it blames the difficulty of getting prompt trial dates and loose deadlines for filing court material as factors.
The review recommends compelling claimants to give more in-depth descriptions of their claims before they launch lawsuits and shortening the limitation period to 18 months for an action to begin.
It also recommends implementing a roster of independent, qualified medical experts as a source of objective assessment for soft-tissue injuries like whiplash.
The review was conducted using aggregate data, as well as 100 randomly selected claims files closed between 2013 and 2017, ranging from minor injury claims to catastrophic ones.
It was done after ICBC saw significant increases in motor vehicle accidents, as well as jumps in the number and severity of claims, the number of claims involving litigation and higher costs from them over the past six years.
VICTORIA — Auditor general Carol Bellringer says BC Hydro has deferred $5.5 billion in expenses that it plans to recover from ratepayers over time.
Bellringer focuses on the deferred expenses in a report on the public utility’s use of rate-regulated accounting to control the prices it charges customers.
She says rate-regulated accounting is used widely across North America, but cautions that Hydro has largely overridden the role of the independent B.C. Utilities Commission to regulate rates.
Last June, the B.C. government launched a two-phase review of BC Hydro to find cost savings and look at the direction of the Crown utility.
The review came shortly after a planned government rate freeze was overturned by the utilities commission, which resulted in a three per cent rate increase in April 2018.
A statement by BC Hydro and the government says a key objective of the review due this month is to enhance the regulatory oversight of the commission.
The federal Competition Bureau wants B.C. to re-examine its taxi regulations to permit more competition in the industry and improve services for riders and businesses.
The bureau’s report says it will urge a B.C. government committee reviewing transportation network services to level the playing field for taxis and ride-hailing providers.
An all-party legislative committee on Crown corporations was asked last year to provide recommendations on regulations on transportation network services for the legislature by March 31.
The Competition Bureau says it will submit recommendations to the committee to ensure fair regulations that do not favour taxi providers or ride-hailing platforms.
The bureau says it will urge the committee to allow drivers to have the flexibility to choose their own service areas and allow market forces to determine how many drivers are available to serve passengers.
Transportation Minister Claire Trevena introduced legislation last year that she said could see ride-hailing services introduced in B.C. sometime this year.