Dismal hiring shows economy stuck in low gear


WASHINGTON |
Sat Jul 7, 2012 3:24am EDT

WASHINGTON (Reuters) – U.S. employers hired at a dismal pace in June, raising pressure on the Federal Reserve to do more to boost the economy and dealing another setback to President Barack Obama’s reelection bid.

The Labor Department said on Friday that non-farm payrolls grew by just 80,000 jobs in June, the third straight month below 100,000.

Job creation was too weak to bring down the country’s 8.2 percent jobless rate and the report fueled concerns that Europe’s debt crisis was shifting the U.S. economy into low gear.

“We’re just crawling forward here,” said Nigel Gault, an economist at IHS Global Insight in Lexington, Massachusetts.

While Obama holds a narrow lead in most national polls, many voters are critical of his handling of the economy. Speaking at a campaign rally in Ohio, Obama said the pace of job creation needs to pick up.

“It’s still tough out there,” he said.

Mitt Romney, Obama’s Republican challenger, assailed the president for not doing enough to get people back to work.

“This kick in the gut has got to end,” Romney told reporters in New Hampshire.

U.S. stocks closed about 1 percent lower, while yields on U.S. government debt fell on bets the Fed would launch a new round of bond purchases to lower borrowing costs and spur hiring. The dollar fell against the yen, but rose against the euro as investors sought a safe haven.

HIRING STRIKE

Last month, the Fed extended a program aimed at keeping long-term interest rates down and said it was prepared to do more to spur the economic recovery if needed.

The somber jobs report could move the central bank closer to a third round of so-called quantitative easing, or QE3.

Reuters polled 16 primary dealers – the large financial institutions that do business with the Fed – and found 12 expect QE3 by year-end, with eight expecting it either at the Fed’s next meeting, which wraps up on August 1, or its subsequent gathering in September.

“You could see something as early as next month,” said Brian Levitt, an economist at OppenheimerFunds in New York.

Economists estimate roughly 125,000 jobs are needed each month just to hold the jobless rate steady. During the second quarter, job creation averaged 75,000 per month, down from an average of 226,000 in the first quarter.

Part of the slowdown could be because mild weather led companies to boost hiring during the winter at spring’s expense.

But weakness in everything from factory activity to retail sales suggests something more fundamental is at play and the jobs data buttressed that view.

In June, factories added 11,000 workers and construction employment edged up 2,000, the first gain since January and further evidence the long-depressed housing market is steadying.

However, hiring slowed sharply in the services industry, with retailers cutting 5,400 workers. Overall, private-sector hiring was the weakest since August.

UNCERTAINTY AND INSTABILITY

Debt woes have bogged down much of Europe, sending some countries into recession. The crisis in turn has dulled economic growth around the world and central banks in China, the euro zone and Britain all eased monetary policy on Thursday.

Europe is not the only weight on the U.S. outlook. Washington plans enough belt-tightening at the start of 2013 to easily send the economy into recession if Congress and the White House cannot find a way to avoid this “fiscal cliff.”

Until recently, the United States had been a relatively bright spot in the global economy, especially in manufacturing, and most economists still expect lackluster growth over the rest of 2012 rather than a slip toward recession.

Although jobs growth in June fell short of economists’ already subdued expectations for a 90,000 gain, the report did offer some hopeful signs.

Average hourly earnings rose 6 cents, the biggest increase in four months.

In addition, a measure of total hours worked hit its highest level since November 2008, suggesting business is brisk enough for employers to demand more from workers, even as they hold the line on hiring.

Temporary employment rose by the most in four months.

“I think a lot of that has to do with the uncertainty that everyone’s feeling,” said Joanie Ruge, an analyst at temporary staffing company Randstad Holdings US. “Employers are not feeling like things are stable.”

(Additional reporting by Herb Lash and Ernest Scheyder in New York; Editing by Andrea Ricci, Tim Ahmann and Andre Grenon)

Wall Street Week Ahead: Stimulus moves, profits to be focus


NEW YORK |
Fri Jul 6, 2012 10:44pm EDT

NEW YORK (Reuters) – Wall Street has been running in circles for the past two months, and the pattern may continue despite the upcoming start of the earnings season.

Quarterly report cards from blue-chips Alcoa and JPMorgan next week could fade into the background as traders jockey for position before key data from China and more central bank headlines next week.

After three major central banks eased monetary policy this week, investors will comb through the minutes of the latest Federal Reserve policy meeting, which will be released on Wednesday, to see what officials said about a further round of asset purchases.

U.S. stocks face headwinds from a slowing global economy. Europe’s debt crisis has drawn much of the attention, but little clarity has emerged about how the euro zone’s debt and banking problems will be fixed despite numerous meetings.

The uncertainty has left the market in the hands of traders, who look for opportunities for quick returns, while investors, who are in the market for the long haul, watch from the sidelines.

The SP 500 flirted with going negative for the year shortly before posting its best week since December. The benchmark index is less than 0.1 percent above where it was two months ago.

“Traders are happy going in and out of the market within a range, but for the average investor it’s a market in which the path is still unclear,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

On Friday, the SP 500 closed down 0.55 percent for the week. The index has posted four weeks of gains and four of losses in the last eight.

CENTRAL BANKS TO THE RESCUE?

Weak U.S. labor market data on Friday raised the chances in favor of the Fed launching a new round of monetary stimulus to boost growth, according to a Reuters poll. ID:N9E8GO01T

The Fed’s minutes midweek will be followed Thursday by the Japanese central bank’s views on the health of its economy after a two-day meeting.

“If we do see additional asset purchases from the Bank of Japan that would depreciate the yen and would be a short-term positive for global equities,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

The recent central bank actions are seen as precautionary moves as the global economy stalls. Next week’s gross domestic product data out of China will help give the market important clues about the world’s second-biggest economy.

“Some of the negative news is built in, and I’m anticipating a positive surprise coming out of China,” Jacobsen said.

Economists expect China to report year-on-year GDP growth of 7.6 percent, compared to an 8.1 percent yearly gain in the first quarter.

Other Chinese data next week include inflation, loan growth, trade balance and retail sales.

Europe remains on traders’ minds despite an agreement last week that opens the door for troubled banks to receive rescue funds. However, Italian and Spanish borrowing costs have resumed their rise in a bearish sign for markets.

Testimony by ECB President Mario Draghi to Europe’s parliament on Monday will be followed by a meeting of euro zone finance ministers.

EARNINGS, OUTLOOKS … AND A BIG TRADING LOSS

Aluminum company Alcoa (AA.N) reports second-quarter results on Monday. Alcoa surprised Wall Street last quarter with a positive outlook, but the global slowdown could make it harder for the aluminum maker to keep its bullish stance.

JPMorgan Chase Co (JPM.N) will also report earnings next week, with investors eager to know how big the bank’s losses will be following a botched trade. The initial estimated loss at the bank was $2 billion but later reports indicated it could balloon to more than four times that.

“The idea is that analysts have been marking down not only earnings estimates but revenue estimates, and the reason is because of weakness in Europe, which is spilling over to weakness in global operations for many companies,” said Brian Gendreau, market strategist with Cetera Financial Group in Gainesville, Florida.

The U.S. economic calendar for next week includes import prices and trade, plus producer prices and the preliminary reading on July consumer sentiment from the Thomson Reuters/University of Michigan surveys.

(Reporting by Rodrigo Campos, additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

Founder Resentment: How to Avoid It

Founders are one of the most begrudged players in start-up land. Here’s why, and what you can do about it.

shutterstock images

One of the most challenging (and least discussed) aspects of business is the resentment that comes during negotations and dealmaking.  Whether you’re entering a relationship as an employee, investor, or founder, the friction of aligning two divergent perspectives to do a deal impacts people emotionally.  Blood pressure rises, people can get angry, and, in the worst-case scenario, take that baggage with them.

A wise man once said: “If both parties don’t feel cheated, you didn’t do a fair deal.”

While reaching an agreement often requires some work, simply reaching an agreement is typically easier than arriving at an outcome that makes everyone happy.  Without very thoughtful communication from both parties and a great deal of effort, achieving perceived “fairness” on both sides is rather uncommon.  Resentment can also emerge after time passes.  What is fair today might not seem fair tomorrow. 

Having known my fair share of employees, investors, and founders, I find founders are the parties that are most often the ones most resented in the start-up community.  There’s good reason founders get caught in the crosshairs of negative feelings.  First, they often hold some of the largest individual stakes in a given company. Founders also have many different partners to negotiate with–employees, investors, as well as each other.

There are three types of resentment toward founders that seem somewhat common to me:

  • From investors who own part of the company’s equity but aren’t operating on it day-to-day.
  • From employees who own a smaller piece of the business but put in the same hours.
  • Co-founders who make different contributions to the business (in terms of hours or equity).

There is no perfect solution to the resentment issue simply because there is no truly fair arrangement.  For one thing, counter parties often define “fair” entirely differently. If you’re a founder and sense employees, investors, or co-founders are feeling resentful, you’re probably not alone. But it’s often a waste of time.

I recommend founders abandon attempts at “fairness.” The goal of negotiation–and business broadly–is not fairness. Instead, the objective is to advance the business in as reasonable a way as possible. Close the deal, move on to the next, and don’t look back. 

Inevitably, in hindsight, your rearview mirror will frame a winding road of business decisions that seem insufficient.  We all wish we could have driven in a straight line.  But it’s hard enough to make it to your destination, so don’t bother beating yourself or others up over how you could have done it better.  If all your partners–employees, investors, and founders–can enjoy the fruits of your labor when you arrive, you’ll all be happier.

Buffett, Zuckerberg & the Meeting of Billionaires

Allen Co.’s annual conference in Sun Valley, Idaho has a billionaire guest list. Check out which of Silicon Valley’s most famous are expected to be there.

Warren Buffett

Flickr/MeDill DC

Mark Zuckerberg, Peter Thiel, and Warren Buffett walk into a room in Idaho…

It’s not the start of a bad joke, just a glimpse of the guest list for Allen Co.’s annual media conference next week in Sun Valley, Idaho, reported Bloomberg

The Lakeland, Florida-based investment bank hosts the annual high-profile conference, which also counts Google chairman Eric Schmidt, Amazon CEO Jeff Bezos, and Apple CEO Tim Cook among expected guests.

The event, now in its 19th year, is closed to the public, and the schedule is top secret. But for the last two decades, the event has served as a casual gathering for top media executives and billionaires from all industries to discuss deals. And more and more, those billionaires are Silicon Valley’s most powerful players.

For example, last year, Newark, New Jersey Mayor Cory Booker met Zuckerberg, CEO of Face book, at the meeting. Soon after Zuckerberg donated $100 million to Newark schools.

This year, tech investors Marc Andreessen and Peter Thiel are also reportedly expected to show up, in addition to Twitter CEO Dick Costolo, and Yahoo CEO Ross Levinsohn.

Another new attendee on the list is the CEO of video-game publisher Activision Blizzard, Bobby Kotick.

Meet the Guys Behind Pinterest (Yeah, Guys)

Pinterest, the beautiful, wildly popular, image-sharing site, was founded by three friends with vastly different skills and interests. Here’s how it grew to a valuation of $1.5 billion.

Courtesy Company

Pinterest

Founders: Ben Silbermann, 29; Evan Sharp, 29

Year founded: 2009

Location: Palo Alto, California

2011 Revenue: Undisclosed

2012 Projected Revenue: Undisclosed

Employees: Approximately 40

Website: Pinterest

Facebook: Facebook.com/
Pinterest

Twitter: @Pinterest

Growing up, Ben Silbermann liked to collect things: stamps, insects, you name it. At Yale, he studied medicine and political science. After college, he got a job as a consultant in Washington, D.C.

Not exactly prototypical start-up material, but today he’s CEO of one of the world’s top social networks, Pinterest, which he co-founded and is valued at a staggering $1.5 billion.

Silbermann’s first foray into the Silicon Valley tech scene was cartoonishly wide-eyed. He’d feel bolts of excitement reading about start-up company hires and funding round announcements on tech blogs.

“I felt like it was a story of my time that I wasn’t a part of,” Silbermann told a rapt audience of hundreds at the South by Southwest Interactive Festival in Austin, Texas, this March, where he did a rare on-stage interview. (Heck, any interview with Silberman is rare. He declined to be interviewed for this article, saying he and his small team were working too hard to be interrupted.) Silbermann decided he should get his start at Google, and landed an entry-level job at the company’s display-advertising group.

The route to running Pinterest, which has nearly 20 million unique visitors a month and $138 million in funding, began in November 2009, when he and a college friend, Paul Sciarra, along with Evan Sharp, who had been studying architecture, started working on a site on which people could show collections of things they were interested in, on an interactive pin-board format.

But at first, going was slow. So was user-adoption. “It was, like, catastrophically small numbers,” Silbermann said. “After nine months, Pinterest was still under 10,000 users, and a lot of them weren’t using it every day.”

Silbermann and his team labored long and hard over the most miniscule site details, such as typeface contrast. They fully coded dozens of versions of the pin screen before selecting and launching one in March of 2010.

Today, that final design (a grid of bulletin boards), and its ease of use, has made Pinterest wildly popular around the world–particularly in the United States and Asia. It hosts boards from a wide range of people: men’s style enthusiasts, architects, yogis, and suburban moms pinning DIY projects and ruffled bloomers on chubby toddler butts. “There are a lot of people who use it for what I call ‘core lifestyle activities,'” Silbermann said with a smile. At South by Southwest he seemed proud that unexpected satire boards have emerged, such as ones mimicking the Romney family’s style, and that museums, such as the San Francisco MoMA, have joined.

The Pinterest team (which Sciarra, who had been listed on SEC documents as the company’s CEO, left in March) has been less forthcoming about plans to build the site into a profitable company, but gave one hint recently: “It has to be something that speaks to the arc of the product itself, which is discovering things [users] didn’t even know they needed,” Silbermann said.

Just last month, a study found Pinterest surpassed Facebook in terms of retail outlets or brands that fans “follow” or “like.” A survey by PriceGrabber, a price comparison site, found that 21% of Pinterest users polled had purchased items they spotted on the site.

There’s a lot that remains to be seen in Pinterest’s future. Two years into heads-down hard work on building out the site, Silbermann has some life-balance advice for future CEOs: “It’s important to have people in your life who can talk to you about other stuff: life, sports. It’s going to take a long time to build a big product that’ll change the world.”

Being CEO Makes Me a Better Mom

Apply the skills that you learn from being CEO to your role as Chief Mom Officer (CMO).

Mother and Daughter Coloring on Floor

Getty

Since my article on the myth of work-life balance a couple of posts ago, my life has gotten even more complicated. My son, Zane, was recently diagnosed with some developmental issues–nothing that can’t be overcome, but the situation is very real nonetheless. My work-life balance is once again upset, and I have had to relocate my equilibrium. As hard as it has been, though, my experiences as CEO of Happy Family have also trained me to be the perfect mom for Zane, especially right now. Here are some of the transferable skills that anyone can take from the office to the home:

1. Being CEO requires that you set goals, organize a team, and manage that team until you reach those goals. This cycle continues for every milestone met, but one example of how this has worked at Happy Family follows:

Many years ago, I set the goal of creating a viable, nutritious alternative to the archaic jar of baby food. I believed that in doing so, we would achieve annual sales of over $50M. I gathered the perfect team of employees and nonprofit/corporate partnerships, and led and collaborated with that amazing team to accomplish that goal. With the right teamwork, I have seen our small business move mountains and achieve what seemed impossible to many onlookers. We are now past the goal and setting a higher bar.

More recently as a mom, I have worked with doctors in many different fields to understand what is going on with Zane and then what realistic developmental goals are for him. After setting those goals with a general goal of total recovery, I then identified and organized a team, consisting of those doctors, therapists of many fields, experts, close friends and family members and we all work toward Zane’s milestones, which are lofty yet achievable.

2. Managing relationships is a big part of being CEO (especially as you grow and get more and more employees. More employees means more personalities with increasingly varied skill sets, and more personalities means more potential for personality clashes…you can see how this can get complicated, right?) One thing that I often talk about in our Happy meetings is how we are all working toward a common goal. This can be a very powerful reminder for everyone to work together.

In my role as CMO, managing relationships looks like this:

Part of Zane’s treatment includes 32 hours a week of intense therapy from seven doctors and therapists from five different specialties. These specialists often disagree with each other on what Zane’s treatment should be, but ultimately our goal is the same: to synergistically combine many expert approaches to holistically help Zane overcome his developmental delays as soon as possible and thrive. Again, I find myself in a situation where I’m managing these relationships, making sure we are all on the same page with the most current progress and information, and reminding each member of Team Zane of this common goal.

3. I know how to compartmentalize what’s going on, separating the professional realities from the personal (and often emotional) feelings. At Happy Family, I often have to take a step back and remember that the business that I have poured my heart and soul into for so many years is still just a business. I am very emotionally attached to Happy Family (and often think of it as my first baby), but it is so important that I ultimately view this business as a professional side of who I am. Believe it or not, being able to separate my emotions from getting Zane the help he needs has been an invaluable skill. Don’t get me wrong, this has been emotionally trying as a mother at times, but after processing through the lows, I am able to dig in and manage the process professionally, which allows for traceable progress and will eventually mean succeeding at the biggest challenge I’ve had to face yet.

Dwolla: Taking On the Banking System

Dwolla isn’t just taking on PayPal. Ben Milne’s start-up is disrupting the whole world of banking.

Courtesy Companies

Dwolla

Founder: Ben Milne, 29

Year founded: 2008

Location: Des Moines, Iowa

2011 Revenue: Undisclosed

2012 Projected Revenue: Undisclosed

Employees: 25

Website: Dwolla

Facebook: Facebook.com/
Dwolla

Twitter: @Dwolla

Most college-age kids are thrilled to open their first credit card account. Ben Milne was not one of them.

Back when he was 18, Milne, the founder of Dwolla, a cashless payment start-up, dropped out of the University of Northern Iowa and launched Elemental Designs, an e-commerce site that sold speakers. After three years, the company was topping a million in revenue, but Milne was paying up to $55,000 in interchange fees—a small percentage of each transaction taken by credit card companies. In a resale business like Elemental Designs, where margins are king, a small percentage fee could make or break the profitably of a sale.

“Basically,” he says, “I got really, really pissed off about interchange fees.”

So in 2008, Milne sold Elemental Designs to focus on what would eventually become Dwolla (a portmanteau for “dollar” and “web”), a payment network that circumvents interchanges fees for merchants. The company, based in Des Moines, has a fairly simple proposition: Users sign up for a Dwolla account by entering their social security number and bank routing number. Then, to pay a merchant or a friend, the user can send a payment directly from their checking account through an e-mail, text, or directly to another Dwolla account. They can also use Facebook, Twitter, and LinkedIn to send money. Transactions under $10 are free; above $10, Dwolla takes 25 cents.

“Basically, I got really, really pissed off about interchange fees.”
–Ben Milne, founder of Dwolla

Behind the site’s sleek, consumer-facing exterior is a deeply developed web of connections between banks, credit unions, and even the Federal Reserve. From 2008 to 2010, Milne threw himself into the world of payments, becoming an expert on the Automated Clearing House, the 40-year-old electronic network between financial institutions that’s a notoriously convoluted and complicated system.

“I think the stunning thing—the most distinctive thing—about Ben, is that I’ve never once seen him frustrated,” says Matt Harris, one of Dwolla’s investors. “He’s just a really positive guy. He kind of just smiled his way through the thorn bushes.”

It didn’t take too long for Dwolla to catch on.  By the beginning of 2012, the company began processing $30 to $50 million a month in transactions, and signed up more than 100,000 users. Investors, too, took notice. Milne’s assistant had to create an Excel spreadsheet to keep track of some 700 suitors wanting a piece of Dwolla.  In February, Dwolla raised a $5 million Series B round of financing, and in April, the company hired its 25th employee in New York.

Milne says he’s not after creating the next PayPal—in fact, his sights are much higher.

“I’m not sure at what point a light bulb goes off and I say ‘We’ve succeeded!’ but I do know that we have a long way to go,” Milne says.

Burma releases student activists

Authorities in Burma have released more than 20 political activists after detaining them for a day, ahead of a planned commemoration Saturday of the 50th anniversary of a brutal military crackdown on students.

Kyaw Ko Ko, leader of the All Burma Federation of Students Union, said 23 people were arrested in the crackdown, which began Friday night. His group had organized the commemoration.

On July, 7, 1962, students in Rangoon, the former name of Yangon, Burma’s biggest city, staged a protest against the military regime of Gen. Ne Win, which had taken power four months earlier. Their protest was suppressed by force, and on July 8, the army blew up the student union building at Rangoon University. It is believed that dozens of students were killed in the crackdown.

“The authorities picked us up to prevent us from commemorating the July 7 event. The authorities are overly anxious and these [arrests] should not happen anymore when the country is on the road to democratic reforms,” said Sithu Maung, 25, a student activist who was one of those detained.

He said the authorities explained their concerns, but the student group insisted its intention was not to create unrest but to remember the fallen heroes and let a new generation know the history of the student movement.

Ne Win’s 1962 coup was the beginning of almost five decades of repressive military rule.

Current President Thein Sein, a former general, came to power with military backing after a 2010 general election. He has initiated reforms, including reconciliation with Aung San Suu Kyi, the leader of the country’s pro-democracy movement, that are intended to boost economic development and have been well received by the international community.

“Even when the president has repeatedly said his government is making real reforms, it is very disappointing that there are some in the government who still cannot abandon their old habits,” said Ko Ko Gyi, a leader of a failed 1988 democracy uprising who has spent many years in prison.

Student organization goes ahead with demonstration

Those detained included several activists who were freed from prison in January under an amnesty for political prisoners, Kyaw Ko Ko said. The amnesty was part of the liberalization policies initiated by Thein Sein’s government to promote political reconciliation.

The authorities had warned the students’ union not to carry out Saturday’s commemoration, and the use of a hall where the event was supposed to held in Yangon was not allowed after its owner came under pressure, the activists said.

A group organized by Ko Ko Gyi and his colleagues, the 88 Generation Students, let the event be held at their office instead. Some 300 people gathered there, where they heard Min Ko Naing, a colleague of Ko Ko Gyi, praise the courage of the new generation of student activists who organized Saturday’s commemoration.

Maung Maung Lwin, a freed activist in Mandalay contacted by phone, confirmed that all the detainees had been released by Saturday night.

“We were not mistreated but we didn’t have a good night’s sleep,” he said.

Those detained included four activists from Yangon, four from Mandalay, four from Shwebo, seven from Myingyan, three from Lashio and one from Sagaing, according to Kyaw Ko Ko.

Access to Information Act turns 30 amid calls for reform

Defence Minister Peter MacKay’s helicopter ride that led to embarrassing headlines and head-scratching explanations. Former international co-operation minister Bev Oda’s infamous $16 orange juice. Citizenship and Immigration Canada’s faked citizenship ceremony.

These are a few of the many stories uncovered in documents obtained through the Access to Information Act, a law that received royal assent 30 years ago on July 7, and came into force almost a year later, on Canada Day 1983.

The act has proved popular over its three decades. Treasury Board statistics show access requests are up 42.7 per cent over the last five fiscal years, in part because the government’s 2006 Accountability Act brought more institutions, including the CBC, under the law.

For the same time period, the number of requests completed within the mandated 30-day time limit increased by 35.7 per cent.

So as we commemorate the 30th anniversary of the law, we should conclude that all is well, right?

Not exactly.

Long-standing problems with the access to information law have prompted calls for a substantive change, something the Conservative government, like previous governments, has been reluctant to do.

‘What we really need to consider is whether we have the right exemptions, the right balance … between the information that needs to be protected and the information that should be disclosed.’—Information commissioner Suzanne Legault

For example, instances where requesters got absolutely nothing increased by 49.1 per cent over the last five years. And during the same time period, the number of requests that were extended beyond their original 30-day deadline increased by 18.6 per cent — a slower rate of increase than the growth of requests, but still acknowledged as a problem.

In January, access and privacy commissioners from across the country sent a letter to the Treasury Board, the department responsible for administering access to information, repeating past pleas to reform a law that has been surpassed by legislation with more teeth in other countries.

“During the past decade,” the commissioners write, “official statistics and investigations of complaints confirm there has been a steady decline in compliance with access-to-information legislation. Timeliness and the amount of information disclosed are two important measures which demonstrate this trend.”

To this end, the federal information commissioner, Suzanne Legault, has been calling for more powers to allow her to order departments and Crown corporations to hand over records if they’re taking too long. Right now, she can only recommend that they do so.

But Legault won’t give a cut-off period after which she should be allowed to bring down the hammer.

Information commissioner Suzanne Legault holds a press conference on Parliament Hill in May, following the tabling in Parliament of her most recent special report on access to information. The legislation received royal assent 30 years ago, on July 7, 1982.Information commissioner Suzanne Legault holds a press conference on Parliament Hill in May, following the tabling in Parliament of her most recent special report on access to information. The legislation received royal assent 30 years ago, on July 7, 1982. (Sean Kilpatrick/Canadian Press)

“I think we’d have to look at it more broadly,” she said in an interview with CBC News in her office overlooking the Ottawa River. “I just think we need to have a basic timeline that is more defined than what we have now, which basically says a ‘reasonable extension under the circumstances.'”

Cabinet confidences exemption

Legault has also echoed the demand of her predecessors by asking for the power to view records considered to be cabinet confidences.

Under the law, a department can withhold a document if it’s deemed to be one that cabinet uses to make a decision. This exemption has been likened to a loophole the size of a Mack truck, into which governments can throw all kinds of records, some of which may simply run the risk of embarrassing a minister if made public.

As a matter of fact, when many journalists see this exemption, they automatically complain, such is the level of their suspicion. If a requester complains to the information commissioner about this exemption, Legault’s investigators do not have the right to review the records to determine if the exemptions are just.

Admittedly, governments should — and in some cases, must — retain the right to keep certain information secret. But that is balanced by the public’s right to know. Other institutions covered by the act, including Crown corporations like the CBC, have their own exemptions for competitive and other reasons.

“What we really need to consider is whether we have the right exemptions, the right balance, if you wish, between the information that needs to be protected and the information that should be disclosed,” says Legault. “This is the information age.… Cabinet confidences are still not reviewable by this office. And that is a huge issue.”

Legault announced Friday her office will undertake a review of the Act to make recommendations to Parliament for changes.

When CBC News requested an interview with Justice Minister Rob Nicholson, his spokesperson said he was unavailable, and, instead, emailed a link to a discussion paper the department issued in 2006.

“It is possible that the review of sensitive cabinet confidence information by the information commissioner and the courts would expose and undermine the collective decision-making of ministers and would run contrary to the principles of collective decision-making by ministers and their accountability for those decisions to Parliament,” the paper concluded.

The government doesn’t talk much about access to information, other than to point out that it introduced the 2006 Accountability Act to apply it to 70 more institutions. The act also ushered in the significant “duty to assist clause” that obliges information officers to be as helpful as possible.

While advocates applaud these changes, they have consistently argued that they don’t go far enough.

So why the lack of appetite for further reform? Now that the Harper government has a majority, it’s acting quickly on several of its priorities, but access to information does not appear to be one of them.

One of the Conservative Party’s predecessors, the Reform Party, used access to information in a way that few parties had ever dared, and experienced great success in keeping the Chrétien government on its toes.

The 2006 Department of Justice paper cited by Nicholson concluded: “There is a widely held view that the Access to Information Act is not broken, but that over time we have learned some lessons about how the system works which can help us to make it better.”

It would be nice to know what some of those lessons are.

If you have knowledge of this issue that you’d like to share, please email david_mckie@cbc.ca

Central Canada heat eases as West warms up

Western Canada is about to be hit by the same weather system that has been scorching many parts of the American Midwest, while Central Canada is getting relief from record-setting temperatures.

A mass of warm air will settle in from Manitoba to British Columbia over the next five days, when temperatures are expected to be in the high 20s to low 30s.

Heat alerts and humidex advisories were issued across southern and central areas of Ontario the province and as far east as Montreal on Friday.

Thunderstorms across much of southern Ontario were in the forecast, a day after 11 temperature records were broken.Thunderstorms across much of southern Ontario were in the forecast, a day after 11 temperature records were broken. (CBC )

Dr. Barbara Yaffe, acting medical officer of health for Toronto, declared the city’s extreme heat alert over Saturday morning after it was issued Wednesday. Temperatures were to reach the high 20s and forecasters predicted thunderstorms could sweep through much of southern Ontario.

Environment Canada said the temperature hit 36.3 C at Toronto’s Pearson airport on Friday, eclipsing the 1998 record of 34.7 C. It was one of 11 records that fell in Ontario.

More seasonal temperatures were in the forecast Saturday.

Meanwhile, a number of U.S. regions are still sweltering in extreme heat.

Forecasters say it will feel like 40 C or more in Manhattan on Saturday. People in Philadelphia will feel a high temperature, with humidex, of 44 C. Washington D.C. has a predicted high of 38 with a humidex of 49.

Heat warnings are also in effect for several Midwestern states, including Iowa, Indiana, and Illinois.

People in the U.S. Northeast and Midwest have endured nine consecutive days of oppressive heat. About 3,000 temperature records have been set in the U.S. in the past two weeks.

Scores of people are still having to tough it out without air conditioning. About 350,000 in a dozen states and Washington D.C. are still without power, a full week after violent storms fuelled by the heat.