Unpaid internships, bank job cuts & confusing contracts: BUSINESS WEEK WRAP

Prepare yourselves for a shock. According to Canada’s official watchdog for the telecom sector, the number of Canadians who made complaints about their phone, cable and Internet services actually went down this year.

It’s the first time in seven years that that’s happened. Canada’s Commissioner for Complaints for Telecommunications Services said in its annual report Tuesday that there were 11,340 complaints to the office this year from customers upset about bogus charges, poor service or billing errors on their TV, phone or internet bills.

That’s actually a decline of 17 per cent from last year’s level and a sign, some say, that the industry’s attempts to fix its broken image on the customer service front is bearing fruit. Ottawa enacted the Wireless Code this year, and the CCTS suggested the clarity that came with that law may have done a lot to clean up some of the more vexing industry complaints.

Smartphone Kill Switch

There were fewer complaints about telecom services this year, but one practice that seems to be getting worse is misleading contracts, the CCTS said. (Ben Margot/Associated Press)

“We are cautiously optimistic that the industry as a whole is becoming more focused on customer issues and on how it addresses customer problems,” was how the commissioner put it.

Hard as it may be to believe, complaints overall were down — and by a lot. But the report did say there’s one area that still bothers many Canadians.

Complaints about misleading contracts were up by almost 75 per cent, far and away more than any other category. That’s an issue the Wireless Code specifically tried to tackle, so an increasing number of misleading contracts is something the industry — and consumers — would be well served to keep an eye on.

Work for free?

When you’re central bank governor, choosing your words carefully is a life skill. And that’s a lesson Stephen Poloz learned this week when he inadvertently waded into the debate about unpaid work.

In a series of comments in Ottawa, Canada’s top central banker essentially said that his advice for any young person looking for work in this tough economy is to be willing to get experience on your resume at any cost — even if it’s free work.

To some, that’s just helpful advice. But to others, it is part of a systemic problem. Headlines were full this year of stories about unpaid internships exploiting students, with some estimates suggesting there’s as many as 300,000 young people toiling away in “internships” across the country that accomplish little more than having them do menial jobs for no money, and letting companies cut back on labour costs.

India Uber Asia

Canadian taxi drivers say ride-sharing services like Uber put them at a disadvantage. (Rafiq Maqboo/Associated Press)

It’s a complex issue, and one everyone seemed to have an opinion on this week. And while it seems likely that Poloz will think twice before sharing his views off the cuff in future, the subject of how to get young people working is probably a good discussion for Canadians to have. 

Scotiabank axes 1,500 jobs

When you’re a bank raking in more than $6 billion in profit this year, the optics aren’t good when your newly minted CEO comes out and announces you plan on firing 1,500 employees, 1,000 of them across Canada. It’s a big, ugly number that’s sure to dominate the news cycle

But that’s exactly what Scotiabank CEO Brian Porter did this week, saying the bank would be streamlining its workforce as part of a cost-cutting plan that also includes writing down hundreds of millions of dollars.

The reaction was swift, and predictable, with critics panning the company’s apparent heartlessness in their slavish devotion to the almighty dollar. But as Don Pittis wrote in one of our most-read stories this week, there’s nothing particularly shocking about it.

Banks are in the business of making money, and there’s nothing wrong with that. That’s good for them, good for their shareholders, good for their employees — and good for Canada, Pittis wrote.

Scotiabank has long had a reputation for being one of the more international banks we have, with a track record of expanding into areas where it sees growth, like it did in Asia and Latin America decades ago. Sometimes those bets don’t go well, but more often than not they do. Banks must manage their risk, so if they think it’s a time to retrench a little before the next bout of expansion, that may prove to be best for everyone in the long run.

Visa and MasterCard cut rates

Speaking of being in the business of making money, the two biggest credit card companies on earth did something this week that they’re not in the habit of doing: they promised to lower their fees.

Not the fees that consumers pay, but rather the fees paid by merchants. Every time they process a transaction for a retailer, the card companies take a fee of somewhere between one and three per cent of the purchase price. Those fees can add up, and retailers say since the explosion in so-called “premium” cards they’ve gotten worse.


Stephen Poloz accidentally waded into the debate over unpaid internships with some comments this week.

But the card companies say they’re going to cap the average rate of fees at no more than 1.5 per cent for the next five years at least. Retailers say they’re happy to pass those savings on to consumers in the form of lower prices, but there’s a body of evidence from when this happened in other countries that suggests the savings will be negligible — and worse, the card companies will be likely to just jack up fees somewhere else to make up for it.

As one prominent bank analyst told us this week, “consumers bear the brunt of the change.”

Road rage as cabbies flight to block uberX

There was another battle over fees in the news this week as a taxi driver lobby group launched a national campaign to get people to think twice before signing up with ridesharing services like Hailo, Uber and Lyft.

If you’ve never heard of them, all three let users pay for taxi rides via a smartphone app. With some, it’s a taxi that shows up, and the prices are the same. With othera, notably uberX, it’s not a conventional taxi cab — but it comes cheap enough that you might not care.

The cab companies say they’re unsafe, and such services are just an accident waiting to happen from a passenger safety level. Uber, meanwhile, says their drivers are all bonded and insured, and the campaign is just sour grapes from an industry they describe as a cartel.

The services have proven popular with riders. But drivers remain on the fence. As one told the CBC’s Sophia Harris this week, “It’s not fair competition because we have to follow the regulations [but] they don’t.”

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