IMF chief facing data-rigging allegations defends actions – Business News – Castanet.net

Nearly 140 countries have agreed on a tentative deal that would make sweeping changes to how big multinational companies are taxed and deter them from stashing profits in offshore havens where they pay little or no tax.
Under the agreement announced Friday, countries would enact a global minimum corporate tax of 15% on the biggest, internationally active firms, reaping an estimated $150 billion for government coffers once implemented.
U.S. President Joe Biden has been one of the driving forces behind the agreement as governments around the world seek to boost revenue following the COVID-19 pandemic.
“Today’s agreement represents a once-in-a-generation accomplishment for economic diplomacy,” U.S. Treasury Secretary Janet Yellen said in a statement. She said it would end a “race to the bottom” in which countries outbid each other with lower tax rates.
“Rather than competing on our ability to offer low corporate rates," she said, "America will now compete on the skills of our workers and our capacity to innovate, which is a race we can win.”
The agreement was announced by the Paris-based Organization for Cooperation and Economic Development, which hosted the talks that led to it.
The deal faces several hurdles before it can take effect. U.S. approval of related tax legislation proposed by Biden will be key, especially since the U.S. is home to many of the biggest multinationals. A rejection by Congress would cast uncertainty over the entire project.
The deal is an attempt to address the ways globalization and digitalization have changed the world economy. Alongside the minimum tax, it would allow countries to tax part of the earnings of companies whose activities, such as online retailing or web advertising, don't involve a physical presence.
On Thursday, Ireland announced that it would join the agreement, ditching a low-tax policy that has led companies like Google and Facebook to base their European operations there.
Although the Irish agreement was a step forward for the deal, developing countries have raised objections and Nigeria, Kenya, Pakistan and Sri Lanka have indicated they will not sign up.
Anti-poverty and tax fairness advocates have said the bulk of new revenue would go to wealthier countries and offer less to developing countries that are more dependent on corporate taxes. The G-24 group of developing countries said that without a bigger share of revenue from reallocated profits, the deal would be “sub-optimal” and “not sustainable even in the short run.”
The deal will be taken up by the Group of 20 finance ministers next week, and then by G-20 leaders for final approval at a summit in Rome at the end of October.
Countries would sign up to a diplomatic agreement to implement the tax on companies that have no physical presence in a country but earn profits there, such as through digital services.
The second part of the deal, the global minimum of at least 15%, would be enacted by countries individually according to model rules developed at the OECD. A top-up provision would mean tax avoided overseas would have to be paid at home. So long as at least the major headquarters countries implement the minimum tax, the deal would have most of its desired effect.
Back to Homepage
Must-Read Stories
Last month’s return to classrooms delivered big gains to the labour market, with B.C. adding 12,300 jobs in September.
The unemployment rate fell 0.3 percent points compared with August to land at 5.9%, according to new Statistics Canada data.
“British Columbia was the lone province with employment notably above its pre-pandemic level,” the national statistics agency said in its Friday report.
The country as a whole added 157,000 jobs in September while Canada’s unemployment rate fell 0.2 percentages points to 6.9%.
The latest national data represents the first time Canada has fully recouped the three million jobs lost at the outset of the pandemic in spring 2020.
And those national gains were led by women last month with another 99,700 jobs added after that demographic suffered disproportionate losses during the course of the pandemic.
“Just because employment has now returned to pre-pandemic levels does not mean that labour markets have recovered,” RBC senior economist Nathan Janzen said in a note.
“The unemployment rate is still more than a percentage point above February 2020 levels. Employment in higher-contact service sectors is still running more than 200k below pre-shock levels, even as government support programs begin to unwind.”
The province, meanwhile, made substantial gains in public administration (+9,000 jobs), while sectors such as healthcare (-13,800 jobs) and wholesale/retail (-3,400 jobs) experienced notable losses.
Vaccine mandates go into effect for B.C. health-care workers later this month, raising questions over whether more attrition might be ahead.
Government support programs such as the Canada Recovery Benefit expire at the end of October, “which could lead to more people rejoining the workforce in October, that is, unless it is extended,” TD senior economist Sri Thanabalasingam said in a note.
Back to Homepage
Must-Read Stories
At the outset of the Covid-19 pandemic, Colin Bates could only watch helplessly as many of his clients shut their offices and sent people home.
“The world changed dramatically for us here at that time as well," said the owner of several Jan-Pro commercial cleaning franchises in Ontario. "The next two weeks were terrifying for us because almost a third of our customer base called us up and stopped services.”
Before long however, the company saw a sharp increase in demand for disinfection services and enhanced cleanings for businesses that remained open, as employers looked to try and make the environment safe and reassure staff. Some large companies wanted the services daily, or even every few hours, he said.
The extra demand helped buffer the cleaning industry during the shutdowns, and companies say business is returning to normal even as many office buildings across the country remain sparsely staffed or empty.
"We continue to have strong demand for our business; we’re pretty much back at pre-COVID levels now," said Bates, who also heads the Ontario division of Jan-Pro.
"A big part of this is we need to help our customers, employees and visitors feel comfortable being back in the office," he added.
The company places decals at entrances, certificates in employee areas, and tent cards at reception to let people know the business has been disinfected.
"It’s important to signal to people, we understand it's not business as usual, we understand it's a different environment, and we are doing things as an employer to protect you.”
He said that the vast majority of businesses they serve have returned, although some have gone under. They also picked up new business when other cleaning operators shut down during the pandemic.
But while activity has improved, Bates said the Delta variant has stalled reopenings for the past three or months now, and business hasn't grown to where he expected it would be.
“The business has not picked up in the way we were hoping it would have at this point.”
Some larger players have seen growth during the pandemic, despite being exposed to the downtown office market that has seen so much pullback.
Quebec City-based GDI Integrated Facility Services Inc., one of the biggest operators in the space and one of the few publicly traded ones, said in its latest quarterly earnings that it had seen a 14 per cent increase in revenue compared with a year earlier, and an eight per cent gain when controlling for the unusual dip in 2020 revenue caused by the initial response to the pandemic.
“The COVID-19 pandemic continued to positively affect most of our businesses during the quarter,” said Claude Bigras, chief executive of GDI on their earnings call in August.
He said that the company, which cleans large offices as well as a wide range of other facilities like hospitals and hotels in both Canada and the U.S., has seen about 80 per cent of its usual business return.
Whiles some businesses have still not fully or even partially returned to the office, Bigras said the company has found that additional specialty services like high-frequency cleaning has made up for the shortfall in the number of businesses they serve.
There continues to be speculation about how many businesses will make remote work more permanent, which could reduce the demand for cleaning, but the companies are banking on a return to work.
“I think the trend is to come back to the office," said Joseph Imbrogno, president of JDI Cleaning Systems in Burlington, Ont. “We have hundreds and hundreds of customers, they’re ramping up to get back to work."
But he notes that it isn't likely to happen quickly. Many customers he speaks with say they want to get back to about 75 per cent capacity over the next six months.
In the meantime, Imbrogno said he continues to see fairly steady demand, even if it sometimes means going in less frequently because there are so few people in the office.
“You’d be surprised at how many offices, even though they were sort of skeleton staff, owners still invested in cleaning services to keep the folks that were there as safe as possible.”
Back to Homepage
Must-Read Stories
Statistics Canada says the economy added 157,000 jobs in September, bringing employment back to pre-pandemic levels for the first time.
The unemployment rate fell to 6.9 per cent, down from 7.1 per cent in August.
Statistics Canada says the unemployment rate would have been 8.9 per cent in September, down from 9.1 per cent in August, had it included in calculations Canadians who wanted to work but didn't search for a job.
The last time Canada had this large an employment gain was in June 2021, when the economy added 231,000 jobs.
In British Columbia, the unemployment rate was pegged at 5.9 per cent, down from 6.2 per cent the previous month.
In Kelowna, it was 5.4 per cent, down from 5.7 per cent.
The statistics agency says the job gains were widespread, but concentrated in full-time work and evenly split between the public and private sector. Gains were also notable in industries where many workers continue to work remotely.
Still, the ranks of long-term unemployed who have been without work for six month or more remained little changed last month and was still double the number recorded in February 2020.
Leah Nord, senior director of workforce strategies with the Canadian Chamber of Commerce, says the fact that nearly 400,000 Canadians are long-term unemployed should put a pause on any celebrations, particularly with no data to explain why they haven't been able to rejoin the labour force in months.
"Canadians want to work, most are not unemployed by choice, so we need to dig down and find out exactly what's holding them back so we can make evidence-based decisions," she says in a statement.
"Our full economic recovery depends on it."
Employment also fell by 20,000 in retail trade in September, bringing employment in the sector to within 71,000 jobs, or 3.1 per cent, of its February 2020 level. Statistics Canada notes that despite the easing of restrictions across Canada, employment in the industry has been around the same level since June.
A similar story played out in the hard-hit accommodation and food services sector, which saw its first decline in five months as 27,000 jobs were lost after gaining 211,000 positions between May and August.
The statistics agency also notes the employment rate remains just below the pre-pandemic figure, reflecting the fact that job growth hasn't matched population growth over the past 19 months.
CIBC senior economist Royce Mendes says the headline figures for the month likely seals the deal for the Bank of Canada to further ease the pace of its bond-buying program later this month.
He adds that there is still a ways to go to fully heal the labour market.
Back to Homepage
Must-Read Stories
The head of the International Monetary Fund said Thursday that a report alleging she had a role in data-rigging at the World Bank when she was a top official there was not an accurate representation of events.
The statement came a day after IMF Managing Director Kristalina Georgieva appeared before the agency's executive board, which is investigating allegations that in 2018 World Bank employees were pressured to alter data affecting its business-climate rankings of China and other nations.
The bank's "Doing Business” report ranked countries after evaluating its tax burdens, bureaucratic obstacles, regulatory systems and other business conditions. High rankings in the report were coveted by governments seeking to attract investment.
"I am pleased that I finally had the opportunity to explain to the IMF board my role in the Doing Business report and how I respected the integrity of the report,” Georgieva said in a statement released Thursday.
In addition to the statement, Georgieva's lawyers released the 11-page statement she delivered to the board on Wednesday in a meeting that lasted over five hours. The board is scheduled to meet again on the matter Friday.
Georgieva has denied any wrongdoing in the matter amid calls that she should resign from her position at the IMF. She served as chief executive officer of the World Bank from January 2017 to September 2019, before taking the top job at the 190-nation IMF, succeeding Christine Lagarde, who is now head of the European Central Bank.
The allegations of data-rigging come from a review conducted by the WillimerHale law firm that alleged Georgieva pressured the bank's economists to improve China's ranking at a time when she and other bank officials were attempting to persuade China to support a boost in the World Bank's funding resources.
The law firm's report prompted the World Bank to discontinue issuing the annual Doing Business report. It also fed into complaints that China's the world's second largest economy, has too much influence over global financial institutions.
As the world's largest economy, the United States is the largest shareholder at the IMF and World Bank, which are both based in Washington.
Asked if the Biden administration had taken a stand on whether Georgieva should step down from her IMF job, Alexandra LaManna, a Treasury spokesperson, said, “There is a review currently underway with the IMF Board and Treasury has pushed for a thorough and fair accounting of all the facts. Our primary responsibility is to uphold the integrity of international institutions.”
In her statement to the IMF's 24-member executive board, Georgieva said, “The WilmerHale Report does not accurately characterize my actions with respect to Doing Business 2018, nor does it accurately portray my character or the way that I have conducted myself over a long professional career.”
Back to Homepage
Must-Read Stories
B.C. has yet another unicorn on its hands following the debut of software firm Copperleaf Technologies Inc. (TSX:CPLF) on the TSX Thursday.
Shares reached $22.88 by the time markets closed at 1 p.m. PT after reaching as high as $24.44 each on its first day of trading. Shares were initially priced at $15 each.
With 57,639,516 shares made available to investors, Copperleaf’s valuation stands at about $1.3 billion (US$1 billion).
The company is best known for developing software that helps clients who manage critical infrastructure — such as electricity generation or natural gas distribution — to make investment decisions.
It began as a consultancy group in 2000 but CEO Judi Hess, who served as president of software firm Creo Inc. when it was sold to Eastman Kodak Co. (NYSE:KODK) for US$980 million, began shifting it to software products geared towards asset management after taking over in 2009.
The company has grown from 25 employees to 350 employees since Hess took over and the software is now being used to manage what Copperleaf estimates to be US$2.3 trillion of infrastructure.
Last month’s prospectus revealed revenue has been climbing steadily upwards since 2018, when it sat at $33.6 million. Revenue was $36.9 in 2019 million before jumping to $44.5 million last year.
Copperleaf is among a growing stable of unicorns — companies valued at US$1 billion or more — to emerge from the province over the last 10 months.
Firms specializing in everything from geofencing to non-fungible tokens; from COVID-19 treatments to legal-tech products, have been leading the explosion of unicorns since December 2020.
This surge of unicorns is unprecedented for the local economy.
David Raffa, president of Valeo Corporate Finance Ltd., said the local tech ecosystem is benefitting from private equity firms swimming in cash amid the pandemic, while credit markets are wide open and interest rates are at record lows.
“You build a dam dependent on a river and the water is piling up, piling up, piling up. Then the dam bursts. And so that’s what happened,” Raffa, whose Vancouver-based firm provides services for mergers and acquisitions and initial public offerings, told BIV in April.
Access to top-tier universities and the large talent pool paid in Canadian dollars at lower comparable salaries than their American counterparts have been particularly enticing, he added.
Brent Holliday, CEO of Vancouver-based Garibaldi Capital Advisors Ltd., said the local tech sector had been held back to a certain degree in years past owing to the lack of available talent in the city.
“Getting big financings in companies like Hootsuite [Inc.], BuildDirect[.com Technologies Inc.], etc., 10 years ago helped fuel a broader talent pool we have,” he told BIV in May.
Back to Homepage
Must-Read Stories
Walmart Canada says it plans to hire 12,000 permanent new employees to staff its retail stores, warehouses and delivery trucks.
The retailer says its hiring spree will include on-the-spot job interviews across the country on Oct. 14 and 15.
It says new workers are needed primarily to fulfil online orders in stores, work in various grocery departments such as bakery, meat and produce, stock store shelves, prepare warehouse orders for shipment and drive delivery trucks.
Horacio Barbeito, president and CEO of Walmart Canada, says the store is committed to offering good jobs and opportunities and welcoming thousands more associates to the company.
The retail chain's massive hiring push comes months ahead of the busy holiday season and could signal a potential labour crunch later this fall as competition for retail workers heats up.
Indigo Books and Music Inc. announced late last month on Twitter a hiring drive ahead of the holidays, with jobs available across the country.
Back to Homepage
Must-Read Stories
Canadians are being hit with all-time record gasoline prices heading into the Thanksgiving long weekend.
Federal government data shows the average national retail price for regular gasoline in Canada hit $1.45 per litre this week.
Many gas stations in the B.C. Interior went up to 157.9 cents a litre this week – a 14-cent jump in some communities.
Fuel price consultancy firm Kalibrate, which has data all the way back to 2007, says these prices are record highs.
Some markets have seen double-digit week-over-week price increases. 
Overall, Canadian fuel prices are more than 40 cents per litre higher than they were last year.
Crude oil prices are at seven-year highs, which is the main factor behind higher gasoline costs. Higher carbon taxes are also reflected in retail gasoline prices.
Back to Homepage
Must-Read Stories
A major Hollywood strike could be on the horizon for some 60,000 behind-the-scenes workers in the entertainment industry.
Over the weekend, members of the International Alliance of Theatrical Stage Employees overwhelmingly voted in favor of authorizing a nationwide strike for the first time in its history.
The International Alliance of Theatrical Stage Employees (or IATSE for short, pronounced eye-AHT’-see) is a 128-year-old union representing over 150,000 artists, craftspeople and technicians in the entertainment industry in the United States and Canada.
Comprised of cinematographers, costumers, set designers, script supervisors, hair and makeup artists, animators, stagehands and many, many more, the IATSE represents essentially everyone who works in any form of entertainment (including movies, television, theater, concerts, trade shows and broadcasting) who isn’t an actor, director, producer or screenwriter.
The three-year contracts that cover about 60,000 of the union’s members — one that primarily covers film and TV production in Los Angeles and Hollywood and another that covers other production hubs including New Mexico and Georgia — expired in July.
For the past four months the union has been negotiating new terms with the Alliance of Motion Picture and Television Producers. Those discussions fell apart on Sept. 20.
The IATSE says that the AMPTP have failed to address their biggest workplace problems, and membership voted overwhelmingly to give the organization’s president, Matthew D. Loeb, the ability to authorize a strike.
The IATSE says its members are subjected to excessive working hours, unlivable wages for the lowest paid crafts and failure to provide reasonable rest, including meal breaks and time off between marathon working days and weekend work. 
The Alliance of Motion Picture and Television Producers is a group that represents hundreds of entertainment companies, including the major Hollywood studios, streaming services and production companies, and negotiates essentially all industry-wide guild and union contracts.
In 2009, the IATSE and studios mutually agreed that new media productions required greater “flexibility” because the medium was not yet economically viable. That has changed in a big way, but the expectation of flexibility from crews has not. They feel they are being taken advantage of while streaming budgets and profits have reached blockbuster levels.
Back to Homepage
Must-Read Stories
The number of Americans applying for unemployment benefits fell last week, another sign that the U.S. job market and economy continue their steady recovery from last year's coronavirus recession.
Unemployment claims fell by 38,000 to 326,000, the first drop in four weeks, the Labor Department said Thursday. Since surpassing 900,000 in early January, the weekly applications, a proxy for layoffs, had fallen more or less steadily all year. Still, they remain elevated from pre-pandemic levels: Before COVID-19 hammered the U.S. economy in March 2020, weekly claims were consistently coming in at around 220,000.
After hitting a pandemic low of 312,000 in early September, claims had risen three straight weeks, suggesting that the highly contagious delta variant was at least temporarily disrupting a recovery in jobs.
Contingent Macro Advisors said the recent uptick was also partly caused by backlog in processing orders in California and other states. Shutdowns at auto plants resulting from a shortage of computer chips could make the numbers volatile over the next few weeks, Contingent said, but “the trend towards lower jobless claims remains intact.''
Overall, the job market has been rebounding with surprising strength since the spring of 2020. Forced to shut down or restrict hours as a health precaution, employers slashed more than 22 million jobs in March and April last year. But massive aid from the federal government and the rollout of vaccines has supported an economic recovery, providing consumers with the financial wherewithal to spend and the confidence to return to restaurants, bars and shops.
So far this year, employers have been adding 586,000 jobs a month, and this month's employment report, due Friday, is expected to show they tacked on another 488,000 in September, according to a survey of economists by the data firm FactSet.
Companies are now complaining that they can't find workers fast enough to fill their job openings, a record 10.9 million in July.
Altogether, 2.7 million Americans were receiving some type of jobless aid the week of Sept. 25, down by 97,000 from the week before. In early September, the federal government stopped additional aid — including $300 a week on top of traditional state benefits — that was meant to ease the economic impact of the pandemic.
Back to Homepage
Must-Read Stories
Lululemon Athletica Inc. is joining the booming personalized at-home exercise trend with the launch of Mirror, a large electronic device for streaming workout classes.
The athleisure retailer says the mirror-like machine, which can be mounted to a wall, is available for in-store demonstrations in Canada starting Thursday and will be available for purchase on Nov. 22.
The device, which looks like a giant glossy hybrid between a smartphone and TV, sells for a base price of $1,895 in Canada plus a $49 monthly subscription fee to access live and on-demand workouts including yoga, kick-boxing and meditation.
Lululemon acquired Mirror in July 2020 for US$500 million as the pandemic catapulted the at-home fitness market to new heights.
Celeste Burgoyne, president of the Americas and global guest innovation at Lululemon, says the Vancouver-based company has seen rapid growth of its Mirror platform since launching in the United States.
She says Mirror will enable more guests to experience "a digital sweatlife offering like never before."
 
Back to Homepage
Must-Read Stories
The head of the International Monetary Fund met on Wednesday with her agency's executive board, which is conducting an investigation into alleged data-rigging at the World Bank, the sister global lender where she was formerly was a top executive.
The IMF is investigating allegations that in 2018 World Bank employees were pressured to alter data affecting its business-climate rankings of China and other nations.
The IMF board heard from IMF Managing Director Kristalina Georgieva, who has denied any wrongdoing in the matter. She served as chief executive officer of the World Bank from January 2017 to September 2019, before taking the helm of the IMF in October of 2019.
In a statement, the IMF said the meeting was part of the its board's ongoing review of the issue. The board said it met Monday with attorneys from WilmerHale, the law firm that conducted the investigation.
“The executive board remains committed to a thorough and timely review and expects to meet again soon for further discussion,” the IMF said.
The law firm’s investigation prompted the World Bank to cancel its annual “Doing Business” report. The report evaluated a country's tax burdens, bureaucratic obstacles, regulatory systems and other business conditions. Its rankings were used by governments to attract investment.
The law firm's investigation found that as part of the preparation of the 2018 report, Georgieva pressured the bank's economists to improve China's ranking at a time when she and other officials were attempting to persuade China to support a boost in the World Bank's funding.
The incident has led to calls for Georgieva to resign from the IMF's top job. It has also served to underscore long-standing criticism that China wields too much influence over global financial institutions.
Georgieva has denied all wrongdoing. “Let me be clear. The conclusions are wrong. I did not pressure anyone to alter any report,” she said last month.
The controversy is occurring as the 190-nation IMF and the World Bank, prepare to hold their annual meetings virtually next week.
Back to Homepage
Must-Read Stories

source

Leave a Comment

Your email address will not be published. Required fields are marked *