MICROSOFT G SEARCHES FOR A ONE-SIZE- FITS-ALL SOLUTION PAGE 3 WEDNESDAY, MAY 8, 2013 SECTION B ..................................................................................................................................................................................................................................................................................................................................................... DISCIPLINED INVESTING, DEPENDABLE RESULTS Report on Business kjharrison.com EDITOR: DEREK DeCLOET ..................................................................................................................................................................................................................................................................................................................................................... S&P/TSX DOW S&P 500 DOLLAR GOLD OIL GCAN 10-YR 12,464.11 (+10.19) 15,056.20 (+87.31) 1,625.96 (+8.46) 99.56 (+0.24) 1,448.80 (-19.20) 95.62 (-0.54) 1.817% (+0.022) COMPETITION INVESTING In Toronto’s Fears of fare war hit airlines crowded WestJet’s plans to add capacity send shiver through sector – even as record results roll in skyline, ............................................................................................................................................................................................................................................................................... Peter Munk GUY DIXON TORONTO The Calgary-based carrier will gins, if airlines are unable to fill Despite those results, the share BRENT JANG VANCOUVER launch its regional subsidiary the extra seats or have to slash price of WestJet declined more sees gold ................................................................ WestJet Encore in late June, just ticket prices to do so. than 7 per cent, down $1.85 to WestJet Airlines Ltd. is heading as Air Canada introduces its new Analysts pushed the company $22.87 Tuesday on the Toronto to the runway with an expanded low-cost leisure carrier Rouge on the capacity question during a Stock Exchange. Air Canada’s ................................................................ fleet, raising concerns that the this summer. first-quarter conference call, in stock price also fell sharply, off TARA PERKINS surge in capacity will lead to a Such extra capacity has the which WestJet unveiled record 7.6 per cent. REAL ESTATE REPORTER renewed industry price war. potential to corrode profit mar- earnings. WestJet, Page 12 ................................................................ Peter Munk says he’s largely out of the real estate game, but he is GLOBAL ECONOMY putting his money in one surpris- ing spot – Toronto condos. The 85-year-old founder and DOWN UNDER’S DOWNTURN chairman of Barrick Gold Corp. – and former head of real estate gi- ant Trizec Properties, which was sold to Brookfield Properties Corp. in 2006 for more than $5-billion – is now spending some of his personal wealth on financ- ing condo projects in Canada’s most populous city. It’s a contrarian move. Policy makers in Ottawa, including Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney, have suggested that they think too many condos are being built in Toronto’s core. Research firm Urbanation Inc. said Monday that 2,728 new con- dos were sold in the city during the first three months of this year, down 29 per cent from the prior quarter and 55 per cent from the first quarter of 2012. Some devel- opers have shelved project plans amid the sales downturn, and the number of new buildings that opened in the first quarter of this year was the lowest since the third quarter of 2009. The num- ber of unsold units in projects that are going ahead has climbed to 18,845, up 21 per cent from a year ago. But Mr. Munk, who believes in Toronto’s long-term future, is unfazed. “That’s the wonderful thing about the markets; if all of us had A strong currency, triple-A credit rating and a commodities-heavy economy – the same view, we couldn’t afford to buy anything,” Mr. Munk said Australia looks a lot like us. But as Tavia Grant reports, the country’s cooling growth in an interview. “It’s wonderful to and Tuesday’s surprise interest-rate cut doesn’t mean Canada will follow suit. PAGE 13 have opposing views.” Condos, Page 12 BROADCASTING MARKET WATCH Cable’s channel changer: The fight to be Netflix North The Dow at 15,000 Despite another record for ............................................................................................................................................................................................................................................................................... the index, investor confidence STEVE LADURANTAYE as Netflix Inc. flix’s success by offering popular Communications Inc. is develop- remains lukewarm. MEDIA REPORTER The streaming video service – titles over the Internet for a low ing a service that would give sub- Page 14 ................................................................ which now has close to two mil- cost. scribers access to movies and Canadian television providers are lion Canadian subscribers paying But that competition has been television shows and is also con- ................................................................ planning to cut their own cords, $7.99 a month for access – is fac- slow to materialize in Canada, sidering developing television Investing Q&A with several of the country’s larg- ing intensifying competition in which has helped Netflix almost series solely for digital distrib- est media companies developing the United States by well-funded double its number of subscribers ution to enhance the product’s John Heinzl takes your questions subscription-based services to cable and technology companies here in the last year. appeal. in a live chat today at noon (ET). compete with online rivals such that are trying to replicate Net- That’s about to change: Rogers Rogers, Page 12 tgam.ca/DqLX ..................................................................................................................................................................................................................................................................................................................................................... Connect with us: @globebusiness facebook.com/theglobeandmail linkedin.com/company/the-globe-and-mail WHAT’S IN A NAME? officemaxcanada.com OfficeMax GRAND&TOY It’s the coming together of experience and expertise, a trusted Canadian brand strategically aligns with its parent company OfficeMax, a global leader in office solutions. From product and supply chain leadership, to sustainability best practices, now, more than ever we are committed to meeting the constantly evolving needs of our customers no matter where they are doing business — whether down the street or coast to coast. Better together. B12 • REPORT ON BUSINESS G THE GLOBE AND MAIL • WEDNESDAY, MAY 8, 2013 CD CAPITAL’S PROJECTS ..................................................................................................................................................................................................................................................................................................................................................... TORONTO MONTREAL BUCHAREST HUNGARY & ROMANIA 155 Redpath Sixty Colborne Ma Condos Victoria City Centre EuroMiniStorage A 470-unit residential condomin- A 300-unit residential condomin- A 150-unit residential condomini- A 350,000-square-foot shopping 2,000-unit, self-storage facilities ium project located in the Yonge- ium project, with retail space on um project located between two centre in northwest Bucharest that CD Capital says have “set the Eglinton neighbourhood. the ground level, located in the green spaces 10 minutes from with direct subway access; it also standard for self-storage in Hun- historic St. Lawrence Market area downtown Montreal and served has 1,900 parking spaces. gary and Romania.” adjacent to the downtown busi- by two Métro stations. ................................................................ ness core. Source: CD Capital ..................................................................................................................................................................................................................................................................................................................................................... FROM PAGE 1 Condos: ‘For me, it’s a significant amount of money for real estate’ ..................................................................................................................................................................................................................................................................................................................................................... “I’m not particularly invest- perial Bank of Commerce econ- 9 ing in condo projects, I’m omist Benjamin Tal. investing with a man who I He estimates that about 31,000 think is absolutely tops,” he households will form annually added. in the Greater Toronto Area The developer that Mr. Munk over the next few years; if that’s is backing is CD Capital, headed the case, then the projected in- by Todd Cowan and Jordan crease in homes in the region Dermer. CD Capital’s projects in- would suggest overbuilding, he clude the 300-unit Sixty Col-