Business and Finance

Michael Yarde buys QuickTax software each year to prepare his family’s tax returns. But this year, he noticed a change. For the same $40 price, he could prepare fewer tax returns.

QuickTax Standard for 2007 includes two returns for Canadians with more than $25,000 in income, compared with five returns in previous years.

"The information was on the bottom of the box," Yarde said. "I admit I should have checked the box first, but I think the change should have been displayed more prominently. I’m sure other consumers will buy the product based on the previous releases."

Cameron Moore, QuickTax product manager, told me that most people didn’t need to prepare five returns.

"About 60 per cent of users prepare only one or two returns for $25,000+ in income," he said.

"We heard from customers who said: `I only do two returns. Why am I paying the same price as someone who does five?’" he said.

QuickTax allows buyers to prepare up to 18 returns for taxpayers with income under $25,000 at no extra cost.

There’s also an online version of QuickTax Standard that costs $19.99 per return. You pay only when you file, and if your income is under $25,000, you pay nothing.

While the package price hasn’t changed, Moore said buyers can take advantage of a $10 cashback offer if they file electronically.

It’s part of a green initiative by Intuit Canada, maker of the QuickTax software line.

"We know the average T1 tax return filed using QuickTax takes up to 18 pieces of paper if printed and mailed to the CRA," Intuit says.

If everyone filed electronically, "that’s 400 million pieces of paper saved."

However, the Eco-Choice option, as it’s called, involves lots of legwork by buyers.

First, you file your 2007 tax return electronically through Netfile same day payday loans. Then, you get a confirmation number from the Canada Revenue Agency and enter it into QuickTax to get a claim form.

You have to fill out the claim form and submit your application online by May 15.

Most claims are processed within six weeks, Intuit says, but that doesn’t include the time it takes for the cheque to come to you in the mail.

In my view, Intuit should lower the price on its downsized product. That’s better than offering a time-consuming rebate that won’t be redeemed in great numbers.

In last week’s column on Bloomex, a national online retail florist, I talked about a customer whose flowers were delivered late after she was told she could get same-day delivery.

Colleen Clarke said she ordered two arrangements on the morning of Dec. 31 after a Bloomex representative told her on the phone that she could get same-day delivery to Calgary and Edmonton.

Bloomex president Dimitri Lokhonia said he couldn’t track down every call made to the Ottawa head office. But he said Clarke placed her order at 1:30 p.m., just past the 1 p.m. deadline for same-day delivery – even though it was two hours earlier in Alberta.

Lokhonia said her plants were delivered to Calgary on Jan. 2 and to Edmonton on Jan. 3, according to the company’s terms and conditions. So, he couldn’t agree to a refund of the delivery charges.

"Bloomex’s goal is to provide the best quality product at the lowest possible price and we will never do compensation for cases like Ms. Clarke. Should we start doing it, our prices will go up," he said.

Write to onyourside@thestar.ca

or check the On Your Side blog at www.ellenroseman.com

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MONTREAL–Mega Brands Inc. disclosed Wednesday it intends to sell the American-based stationery and crafts business it acquired in mid-2005 for US$350 million.

The segment, primarily under the Rose Art brand, generated sales of about $200 million last year, producing pens and pencils, presentation boards and organizers, and craft and activity sets.

"The sale of the company's stationery and activities business is being considered as a means of generating meaningful cash proceeds to reduce its existing debt and allow the company to place increased focus on its core toy business," Mega Brands CEO Marc Bertrand stated.

"Our stationery and activities business has consistently delivered solid performance," Bertrand added.

"This is a strong business with solid market positions in North America and we believe it would be an attractive acquisition to both strategic and financial buyers."

Divesting the business would focus Mega Brands on its core toy business and provide a stronger and more flexible capital structure, the company said cash advance flexible payments.

There is no assurance a transaction will result, Mega Brands added, but "in addition to several other unsolicited expressions of interest for the stationery and activities business, it has received a letter from the former owners of Rose Art expressing an interest in acquiring this business but providing no particulars."

"This expression of interest is considered by the company in the context of its ongoing litigation initiated by the former Rose Art owners against the company."

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Bank of Montreal warned investors today it is poised to miss its annual earnings targets again this year after hefty debt-related writedowns caused its first-quarter profits to tumble 27 per cent to $255 million.

Canada’s fourth-largest bank is just four months into its 2008 financial year. It had vowed in late November to deliver robust earnings per share growth of 10 per cent to 15 per cent in fiscal 2008 after missing most of its 2007 financial goals.

Chief executive officer Bill Downe told investors attending BMO’s annual meeting in Quebec City that he takes responsibility for where the bank “fell short” last year but promised to grow the bank’s businesses “despite the weaker credit environment.”

The tone of BMO’s earnings release, however, appeared less optimistic about the near-term outlook. “Given the significance of charges recorded in the first quarter, our current expectations in respect of fiscal 2008 provisions for credit losses,

The prolonged difficulties in the capital markets environment and the expectation the economy will not perform as well as anticipated when we established our targets, we do not expect to achieve our annual earnings targets,” BMO said.

That prompted investors to push BMO’s stock further in the red. Its shares fell 3.54 per cent, or $1.71, to $46.65 during late-morning trading on the Toronto Stock Exchange guaranteed cash advance loan.

BMO’s earnings, meanwhile, declined for the third consecutive quarter. For the three months ended Jan. 31, net income was $255 million or 47 cents a share. That compared with year-ago earnings of $348 million or 67 cents a share.

As previously announced, the bank’s results included after-tax losses of $362 million relating to certain trading activities and valuations adjustments and an increase in the general allowance for credit losses.

Excluding significant items, net income was $617 million or $1.19 per share for the November to January quarter. Nonetheless, analyst Andre-Philippe Hardy of RBC Capital markets called BMO’s first-quarter earnings “weak,” saying they reflect capital markets and credit challenges.

BMO continues to leave the door open to another $495 million pre-tax charge if the restructuring of its Apex and Sitka Trusts fails. Those trusts deal in asset-backed commercial paper and face several outstanding collateral calls.

Dominion Bond Rating Service placed the notes of both trusts “under review with negative implications” late yesterday. CEO Downe told investors this morning that discussions to restructure the trusts are ongoing.

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Forget all those bonus-points schemes, here’s the ultimate credit-card plan: Buy the issuer’s stock. Investors in MasterCard’s initial public offering (IPO) two years ago have enjoyed a five-fold increase in share value. Now the far larger Visa Inc., the largest credit card firm, whose 44 billion transactions eclipse the total for MasterCard and #3 player American Express combined, aims to raise $17 billion (U.S.) in the biggest IPO in history.

A few reasons why that might appear to be a bad idea: A record number of North Americans have maxed out their credit cards, which they fell back on as falling home prices destroyed their ATMs’ status as a ready source of home-equity loans. And with U.S. consumer spending further depressed by an economic downturn, and North American equity markets in a funk over the global credit crunch afflicting major banks, even modest IPOs are a tough sell in this market.

But on the bright side, Visa boasts an Economics 101 advantage – namely, high barriers to entry. Go ahead, just try to replicate Visa’s global ubiquity, technology refined over the decades, and brand-name awareness. Which is why you can count Visa Inc.’s substantial rivals on the fingers of one hand. And it’s a nearly risk-free business: The banks and other institutions that pay Visa to issue its cards are stuck with customer defaults, not Visa.

As for the jittery global credit market, credit demand remains strong in emerging super-economies in Asia as well as the Middle East. And when credit conditions finally ease in North America, credit card use will rebound much earlier than bank loans and other forms of credit. If Visa and its underwriters don’t get greedy, and are reasonable in pricing their IPO, the San Francisco-based firm’s shares might make a nice hedge against your credit-card burden.
 

Maitre chez nous?

We can’t help noticing the Canada Pension Plan Investment Board’s interest in acquiring a 40 per cent stake in Auckland International Airport Ltd. You can’t go much further afield than that in search of the reliable, utility-like returns with modest upside potential that Canada’s institutional investors crave.

There has to be some reason why the CPPIB, Caisse de depot et placement du Quebec, Ontario Municipal Employees Retirement System (OMERS) and the Ontario Teachers’ Pension Plan keep turning their backs on locally available prospects like world-class steelmaker Dofasco Inc., aluminum giant Alcan Inc. and, most recently, global leader CHC Helicopter Corp., all snapped up by foreign buyers, contributing to the "hollowing out" of Corporate Canada.

Does Auckland Airport, serving a nation of about 3 million people, offer superior returns to, say, Dofasco? No, just more stable ones cash advance. With Dofasco, there’s always the risk of a cyclical downturn, even if it’s matched by subsequent booms in demand for the high-quality specialized products that were Dofasco’s forte.

Canada once suffered a capital shortage and was understandably reliant on Europeans, mostly British bond buyers, to finance the likes of the CPR and Hudson’s Bay Co. Today there’s no shortage of investment capital in Canada. But to a large degree, Canadian pensioners’ money is not being reinvested in Canada, and loss of economic sovereignty is the result.

European and Asian nations are inclined to block takeovers of firms regarded as national champions by fiat, citing national strategic interest. Hell will freeze over before the U.S. parts with Boeing Co. and France lets Airbus SA slips away.

We’d stop short of that. But it’s time to examine why Canada’s largest pools of capital are financing the economic development of other nations while Canada goes begging for Canadian buyers of iconic Canadian assets.

It may be time to relax the fiduciary risk-aversion policies of institutional investors in selected cases, backstopped by federal guarantees to make up the difference on Canadian assets that dip in value. Unless we’re content, of course, with continuing to be the only branch-plant economy in the G-8 indefinitely.

Snowbird book list

Our latest contribution comes from Karen Sencich, who recommends Diana Gabaldon’s Outlander (Delacorte, 1991), first in a six-part series of novels about intrigue in the Scottish highlands in the 1700s. "Readers will marvel at the courage and sacrifice of the heroine and the inspirational story of humanity and the power of personal integrity," says Sencich, who reports that friends often re-read the entire series.

This day in history

Born on this date in 1847, this Edinburgh native spent his latter years at his summer home in Cape Breton occupied with pioneering experiments in aviation, having already invented a globally ubiquitous device.

(Answer, reverse: Lleb Maharg Rednaxela)

Quotable tycoon

"Humanity’s greatest advances are not in its discoveries, but in how those discoveries are applied to reduce inequity. Whether through democracy, strong public education, quality health care or broad economic opportunity, reducing inequity is the highest human achievement."

–Bill Gates, philanthropist and cofounder of Microsoft Corp., Harvard University commencement address, June 2007.

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Ontario Power Generation Inc., the province’s electricity generation company, says its annual earnings rose to $528 million from $490 million amid general production improvements.

OPG received an average price of 4.6 cents per kilowatt hour for the output from all of its generating stations in 2007, equal to that of 2006.

Income was boosted by an increase in earnings from nuclear funds, non-electricity generation revenue, fossil fuel-based generation, a decrease in income tax expense and lower depreciation costs related to the service lives of coal-fired generating stations.

But those favourable impacts were partly offset by lower generation from OPG’s Pickering nuclear stations, and higher nuclear and fossil maintenance expenses.

"In 2007, safety performance was the best since the company’s inception in 1999, and the performance of our generating stations improved significantly," CEO Jim Hankinson said Friday.

"The reliability of our generating stations improved over the previous year, with the exception of the Pickering A and B nuclear stations, where one-time events unfavourably affected production in 2007," said President and CEO Jim Hankinson.

Electricity generated in 2007 of 105.1 terawatt hours was essentially equal to production of 105.2 TWh in 2006. But electricity production from OPG’s nuclear stations of 44.2 TWh in 2007 decreased from 2006 production of 46.9 TWh.

"Production at the Pickering A station decreased primarily as a result of a requirement to perform modifications to a backup electrical system, and repair work required due to a component failure during inspection," the company said.

In addition, production at the Pickering B station during the first quarter of 2007 was affected by an inadvertent release of resin by a contractor from the water treatment plant into the demineralized water system.

Hydroelectric production of 31.9 TWh was slightly lower than production of 33.3 TWh in 2006, due to lower water levels pay day loans. Fossil-based production increased to 29.0 TWh in 2007 from 25.0 TWh in 2006, mainly as a result of lower generation from OPG’s nuclear and hydroelectric generating stations.

OPG said it continues to pursue several hydroelectric generation projects and, if government approval is obtained, plans to explore and develop nuclear and natural gas generation projects.

"The list of new generation projects that OPG is undertaking is unprecedented," Hankinson said.

"In consultation with our shareholder, we will develop these much-needed new sources of electricity supply to help meet Ontario’s future electricity needs."

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