Air Canada said it will buy eight widebody planes from the European consortium Airbus Industrie for $1.4 billion. The airline also posted its best-ever second-quarter profit, earning $71 million in the three months ended on June 30. Rival Canadian Airlines reported its first second-quarter profit since 1990, earning $2.6 million.
EATON'S CUTS 'DEATH LIST'
T. Eaton Co. Ltd. said it will shut 17 of its 85 stores, rather than the 31 originally slated for closure. Eaton’s president, George Kosich, said municipal tax breaks, concessions from landlords and a surging economy spared the stores, savings hundreds of jobs.
The Reichmann family took another step towards resurrecting its real estate empire by purchasing three Toronto office buildings for $81 million. It was Camdev Corp.’s largest acquisition since Albert Reichmann’s son Philip and Paul Reichmann’s sonin-law Frank Hauer took control late last year. The firm has now changed its name to O&Y Properties Corp.
JOBS FOR NOVA SCOTIA
AT&T Canada Enterprises Inc. announced plans to open a $9-million call centre in Halifax, employing 1,000 customer service agents. Nova Scotia said it will pay the telecommunications giant $12 million over the next five years to train employees.
LAIDLAW LANDS DEAL
Laidlaw Inc. of Burlington, Ont., North America’s largest operator of schoolbuses and ambulances, will pay $430 million to acquire Dallas-based EmCare Holdings Inc., a provider of management services to hospital emergency rooms. CEO James Bullock said the deal is part of Laidlaw’s plan to expand its health-care operations.
JAPAN CLAMPS DOWN
Japan hit its biggest brokerage house and a top bank with the most severe penalties ever imposed on Japanese financial institutions following their involvement in a racketeering scandal. The punishments will shut down key divisions of Nomura Securities Co. and Dai-lchi Kangyo Bank Ltd. until the end of the year.
Billions of dollars gushed from Alberta’s oilpatch as two oil giants moved to boost their operations. Suncor Energy Inc. of Calgary announced a $2.2-billion upgrade to its Fort McMurray oilsands plant that will more than double production of light crude to 210,000 barrels a day by 2002. The plant, which employs 1,600 workers, is already undergoing a $600-million expansion, and the
even-larger facility could create up to 800 new jobs. Meanwhile, Gulf Canada Resources Ltd., which moved its executive offices to Denver last year, opted to expand through a $688-million friendly takeover of Stampeder Exploration Ltd. of Calgary. Gulf president J. R Bryan, who is known for launching bitter takeover battles, said he intends to create a separate division by combining Gulfs heavyoil and oilsands properties with Stampeder’s heavy-oil interests.
Brisk consumer spending kept the economy growing in May, as the country’s output of goods and services—or gross domestic product—rose a healthy four per cent over the same month last year. Wholesalers and retailers accounted for much of the growth. With orders up and inventories down, manufacturers said they intend to increase hiring. Expectations that the Bank of Canada may raise rates slightly to control economic growth and shore up the sagging dollar prompted the major banks to boost short-
term mortgage rates. But several shaved rates on mortgages of 10 and 25 years, and threeto five-year mortgage rates are unchanged.
“The government sector remains a weak link. Ongoing public-sector restraint has shaved one percentage point off overall growth in the past 12 months. However, the fiscal drag is beginning to subside.’’ —Scotiabank
“Healthy economic growth and generally low interest rates will continue over the next two years, which will help Canadian governments balance budgets. Once the federal budget deficit is eliminated, the federal government may deliver a sizable tax cut by 1999. ” —TD Bank
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