Business Notes

June 5 2000

Business Notes

June 5 2000

Business Notes


Brains: small drain, big gain

Statistics Canada

confirmed that Canada is losing large numbers of highly qualified professionals to the United States. But the federal agency also reported that the brain drain is more than matched by an influx of highly qualified immigrants from other countries. The report estimates that the flow to the United States ranged up to

12.000 in 1991 and as high as

23.000 in 1997. It also found, however, that for every person with a degree that Canada loses to the United States, Canada gains four from elsewhere, including at least one with postgraduate qualifications.

Members of the health professions and the business community have long warned that Canada is losing its best minds because of uncompetitive salaries, high taxes and especially inadequate investment in research and advanced facilities. It can be problematic to rely on immigrants to fill the gaps, they say, since many lack the North American credentials necessary to practise their profession in Canada. The StatsCan study confirmed the medical exodus. The annual outflow of doctors and nurses to the United States is equivalent to about a quarter of the number who graduate each year.

A huge airline gets even larger

Chicago-based United Airlines Inc., the world’s largest carrier, is taking over US Airways Group Inc. of Arlington, Va. The $6.5-billion deal will create a gargantuan operation with 145,000 employees and 900 aircraft. By comparison, the planned merger of Air Canada and Canadian Airlines International Ltd. has boosted Air Canada’s fleet to 370 and employees to 40,000. If the U.S. deal passes regulatory hurdles, Air Canada customers will likely gain better access to American destinations: the airline already has an extensive code-sharing pact with United.

Financial Outlook

The prices Canadian manufacturers pay for key raw materials fell six per cent in April, a welcome respite amid generally rising prices. Falling costs for


Yearly change in the raw materials price index and selected index categories

RMPi..... +19.7%

Mineral fuels +47.2

Animals and „. _

animal products +14.5

Ferrous materials ; +10.5 Non-ferrous metals +10.2 Wood +5.6

crude oil were the main factor, taking the mineral fuel category down by 15.5 per cent. But even with April’s downturn, the raw materials price index is still up nearly 20 per cent on a year-over-year basis, again largely because of crude oil prices. They are still nearly 50-per-cent higher than they were last April.

Derek Burleton, senior economist at TD Economics, believes the big jumps 1 in raw materials prices are over and I that Canada can expect to see those § prices rising far more gradually for the g rest of the year—good news for the I export-driven economy.

ATI takes a dive

The shares of Markham, Ont.-based ATI Technologies Inc., one of the world’s biggest makers of computer graphics equipment, took a beating after the company warned that it will post a loss in the third quarter. Its shares ended the week down 45 per cent, at $13.90. Company officials blamed intense price competition and a global shortage of components.

Microsoft’s reckoning

The judge in the Microsoft Corp. antitrust case shocked the participants by abruptly calling an end to the penalty phase of the proceedings. U.S. District Judge Thomas Penfield Jackson, whose decision is due soon, suggested that splitting the giant software maker into three would be preferable to dividing it into two, as the U.S. justice department has proposed.

Oilpatch turmoil

Ranger Oil Ltd. of Calgary failed to obtain a court order blocking a hostile takeover bid from Petrobank Energy and Resources Ltd. of New York City. Ranger had alleged that the principals of Petrobank violated insider trading rules when they accumulated a fiveper-cent stake in Ranger earlier this year. Ranger’s board, which put the company up for sale in April amid shareholder discontent, opposes the leveraged bid from Petrobank, which is about a 10th Ranger’s size.

Ford buys Land Rover

Ford Motor Co. confirmed it will buy British-based Land Rover from Bayerische Motoren Werke AG (BMW) for $4.2 billion. The acquisition is the latest addition to Ford’s luxury-car lineup, which includes Volvo, Jaguar, Aston Martin and Lincoln.

Rail alliance

Canadian Pacific Railway Co. teamed up with three large U.S. railroads to invest in Arzoon Inc., which co-ordinates transportation services over the Internet. CP Rail and its new partners have lobbied against the proposed $8.7billion merger of Canadian National Railway Co. and Burlington Northern Santa Fe Corp. of Forth Worth, Tex.