Tuesday, June 3, 2008

Ontario Catholic Teachers Layoff

Toronto Catholic School Board trustees voted to cut 85 jobs. This decision was made in an effort to balance their budget. The Toronto Star reports the Toronto Elementary Catholic Teachers union has said it's not fair for the board to balance the budget on the backs of its members, and said the cuts are beyond what's necessary to address declining enrolment, which this year is about 900 students across the board.
Declining enrolment, and budget shortfalls, affects many districts. It will be interesting to watch how others try to handle these issues.
And it's not just the teachers who are getting cut. Board trustees decided to: implement a 10 per cent reduction to school budgets, lay off 32 support staff, such as caretakers and secretaries, cut contract child and youth workers, and they have also agreed not to hire secondary teachers to fill job openings. Naturally this is bad news to current staff, but it will also impact the hundreds of graduates seeking jobs.
It's worth noting that Alberta is on the verge of a teacher shortage with an estimated 17,000 teachers retiring in the next 12 years.

Sunday, June 1, 2008

Same Company More of Your Cash

This from The National Post:
The Ontario Teachers’ Pension Plan, which injected a lifesaving 35 million ($35.4 million) Canadian dollars into hybrid locomotive maker RailPower Technologies in January, has ponied up another 20 million Canadian dollars to help the company build a new factory in Quebec.
Teachers’ investment is in the form of a convertible debenture, the same way it put money into the company in January. If both debentures are eventually converted to common shares, Teachers would own about 75 per cent of RailPower, which is based in the Montreal suburb of Brossard.
Read about the initial investment here.
Current RailPower Technologies stock price: TSE:P

Don't Count on Penison

Workers "shouldn't be counting on their pension" said Brian Leitch, a lawyer representing US Airways. The statement was made after management asked a federal bankruptcy judge to authorize reductions in its pension.
This may be worth noting as the OTPP recently hired Rakesh Gangwal, former US Airways Group Inc. chief executive officer, as a "senior advisor." Gangwal worked for the company from 1996 to 2001. On August 11, 2002, US Airways Group, Inc. filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. US Airways terminated its pensions.
The federal government's Pension Benefit Guaranty Corp. (PBGC) took over the pension plan from US Airways. The plan was about 40% funded. The federal agency covered a percentage of that amount.

Wednesday, May 21, 2008

London Life Pensioners Sue For Their Money

Former London Life workers are launching a class action lawsuit against the company, going after $11 million they say they are owed in pension money. The suit is being filed by a group of workers who were fired in 1996. They argue that they did not receive a fair amount of the pension they paid into. "It's our money, not London Life's money. It is our pension plan," said Barb McGee, 62, a former worker living in London, Ontario.

London Free Press has the full story.

Tuesday, May 20, 2008

Ontario Teachers Pension & BCE

The financial press is loaded with articles about the Teachers Pension and Canadian telecommunications company BCE. Teacher's is part of a group planning a big buyout of BCE. It's a huge deal. I can't imagine how much time and energy the folks who run the Ontario Teachers Pension Plan are spending on this. Why are the teachers so convinced owning BCE is good for retired, and soon to be retiring teachers?
Could the BCE deal collapse? Would all the time and energy have been better spent in less complicated deals that might have drawn similar returns?

Recently, in the US, a similar deal went through. Media conglomerate Clear Channel was bought-out by two private equity firms with financial backing from banks. The deal has some similarities to the buyout OTPP is a part of.

The Wall Street Journal's Deal Journal wrote about the pending BCE deal and its similarities to the Clear Channel deal:

This deal, unlike the Clear Channel one, is still awaiting Canadian regulatory approvals and the outcome of the bondholder appeal to the Quebec Court of Appeal, which could go to the Supreme Court of Canada. These approvals are expected, however. If BCE is in peril, financing is not the only thing that could kill it. The banks stand to lose around $3 billion on this deal, which is about the same that the could have lost on the Clear Channel deal, which was half the size.

It’s quite possible– and even probable — that BCE will play out just like Clear Channel, with a lot of huffing and puffing ending in a deal everyone can live with. But, as Jane Fonda always warned before any significant exertion, don’t forget to breathe.

Wednesday, April 23, 2008

A Tale of Two Stories

The Toronto Star and the Globe and Mail both published stories about the release of a new report outlining declining enrollment and school closings in Ontario. Coverage of the report was mixed with neither providing background about the organization that published the report People for Education, although the Toronto Star referred to it as a "lobby group." The Toronto Star's coverage didn't mention Dalton McGuinty as much as the Globe's story, which included these references to McGuinty:
- ...the self-described “Education Premier” said the number of schools across the province is no measure of Ontario's education system. For every school that has closed under the Liberals, Mr. McGuinty said a new one has been built.
- “Schools open and close in the natural order of things,” Mr. McGuinty said Wednesday before a cabinet meeting. “The issue is, how are we doing in terms of academic achievement?
School closures aren't all bad, he added.
- “If (school boards) can put more money into supports for kids and less money into supporting buildings which aren't really serving their intended purpose, that's probably a good thing.”
Full Globe Story (Toronto Star story in previous post)
The 11 page report is available here.

Schools Closing, What About the Jobs?

News today about declining enrollment and school closings but curiously nothing about the jobs that will vanish.
From The Toronto Star: The lobby group People For Education reports that School boards across Ontario have are considering closing at least 50 schools and are reviewing the viability of nearly 300 others.
Among the report's findings:
- Ontario schools have lost 90,000 students over the last six years.
- In four of Ontario's northern boards, enrolment has declined by more than 20 per cent since 2002, one by 36 per cent.
- Only nine English-language boards have had enrolment increases, all in the 905 region.
Full Toronto Star Story