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Air Canada is paying up… kinda
Air Canada and the federal government finally reached a deal after months of negotiations on Monday. The government has proposed a financial aid program for the airline including $4 billion in repayable loans and a $1.4 billion loan specifically for customer refunds. The government will also take a $500 million stake in Air Canada.
As part of the deal, Air Canada has agreed to provide refunds starting April 13 for passengers who purchased non-refundable tickets but did not travel due to COVID-19 since February 2020. This is good news for Canadians who have been battling with the airline and their credit card companies over the past year in hopes of getting some money back.
What’s in the agreement?
- Resuming regional routes that were suspended due to COVID-19. This is a major win for rural and smaller communities that have been cut off from the rest of the country since June 2020.
- Senior executives’ total compensation will be capped at $1 million. It’s still a lot but not quite as high as compensation packages execs got during the 2008 financial crisis. Referred to as “golden parachutes,” CEOs pocketed millions of dollars in bonuses while lower-level employees were fired, often with no severance.
- Dividends and share buybacks will be restricted while the airline is borrowing money. Restricting share buybacks essentially means Air Canada cannot purchase their shares back from the market, which can boost their financial statements, but also could lower the share price.
Why Should I Care?
Your tax dollars are being used to help Air Canada! Knowing how the airline plans to use the money is important for keeping the company accountable to everyone, not just shareholders.
Coinbase Goes Public and the Public Goes Bananas…
Coinbase, a San Francisco based crypto exchange platform, made its public debut on the stock market this past week.
For those who have not heard about the company before, Coinbase allows users to invest, exchange, save, and hold bitcoin* (and other cryptocurrencies). The company’s mission is to “create an open financial system for the world” – a mission somewhat juxtaposed with its history of discrimination against female and Black employees.
Coinbase chose to go public via a direct listing. A direct listing is when a company goes public without the help of intermediaries or underwriters. Many popular companies, such as Spotify and Slack, have similarly gone public via the direct listing. This strategy is cheaper than an IPO but the low-cost advantage comes with certain risks as there is no guarantee that the shares will sell.
Coinbase did not have that problem. In fact, Coinbase’s share price successfully opened at $381 and climbed up to around $430 in Wednesday afternoon’s session, giving it a whopping $99.6 billion valuation. The listing especially attracted retail investors that were interested in getting into the cryptocurrency market without buying any coins at all.
Coinbase public listing is a win for the crypto economy. Many experts believe the company’s success indicates accelerating adoption of bitcoin and other crypto currencies. It came as no surprise that many crypto currency prices (ahem…dogecoin) simultaneously soared.
It remains to be seen if the interest in Coinbase and crypto economy will remain at the current level. There is a ton of uncertainty as the company’s valuation is still in flux. Most financial advisors will tell you not to put all your eggs in one basket and find the balance between risk exposure and potential to make $$$.
*To read more about bitcoin, be sure to read our latest piece on the topic.
Conservative Climate Plan: Does Carbon Need a Saving’s Account?
Last week, federal Conservative party Leader Erin O’Toole revealed his party’s climate policy, which includes a mandatory carbon levy — a major shift for a party that opposes the Liberal party’s carbon tax. O’Toole proposed scrapping the current government’s carbon tax and implementing a “low carbon savings account” for individuals that would fund environmentally friendly purchases.
What exactly is O’Toole proposing?
The proposed consumer price would begin at $20 per tonne and rise to a maximum of $50 per tonne. This is in contrast to the current government’s carbon-pricing scheme that sets the price at $40 per tonne, and rises each year until it reaches $170 per tonne.
The Conservative plan is to introduce a “zero emission vehicle mandate,”, similar to BC’s policy, that requires 30% of light duty vehicles sold to be zero emissions by 2030.
The climate strategy seeks to meet the international emissions targets set by the Paris Accord, but O’Toole failed to mention any plan to reach net-zero emissions by 2050.
Everyone’s Putting a Price on Carbon
The Conservative climate policy was released just in time for the Liberal government to table its first pandemic budget, which will include its plan for economic recovery. The timing of the budget release has some convinces another federal election is around the corner.
While the Conservatives’ climate plan has received some criticism, it looks like all major Canadian political parties are (finally) campaigning on the fact that climate change is an existential threat and an economic opportunity where carbon pricing is essential.
Things we read and liked:
The evolution of ‘mommy bloggers’ – and what that represents about how society perceives women’s labour.
Stacy Lee Kong writes persuasively about the argument for police abolition.
Confusing but intriguing: how influencer’s social media clout can become crypto currency.
Anne Helen Petersen on class performance and straight teeth.
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