Monday, May 28, 2018

Strikes : Good or Bad?

WestJet Airlines          

      When the pilot's union of the pilots of WestJet voted 91% in favor of strike action, the travelling public started to worry about their travel plans.  WestJet Airlines employees were not part of a union until recently.  WestJet Airlines employees are WestJet owners, which was part of the commercials.  See, instead of having pensions like their Canadian competitor Air Canada, WestJet employees could purchase company stock as part of an employee stock purchase plan.
       On May 25th of 2018, WestJet CEO and head of pilot's union made an announcement that the threat of strike action has been eliminated and the people can book with WestJet with 100% confidence.  One of the major sticking points involved the soon to launch ultra low cost carrier Swoop.  Swoop was going to have pilots from other parts of the world and they would not be WestJet Pilots.  WestJet has come out and said that Swoop planes will be piloted by WestJet pilots.  This will likely mean, the cost to fly on Swoop will be increased to offset thee pay of the unionized pilot.   The parties have agreed to mediation and possibly binding arbitration to come to a contract.
           On this news of no strike action, the price of WestJet stock, WJA.TO, increased 5% and then started to retract to between 2 and 3%.

Canadian Pacific Railway

     Over the weekend, the unions of Canadian Pacific Railway gave a 72 hr strike notice after rejecting the company's latest offer. 

     What happens when a Class 1 railway goes on strike?  The economy is strongly affected as a lot of companies ship by rail to reduce cost considerably and the belief that it is more environmentally friendly.  Trains transport commodities such as coal, crude oil and grain. Trains also transport goods via intermodal containers and temperature controlled intermodal containers.
    The federal government will get involved very soon if the matter is not settled within a matter of days.  Canadian Pacific Railway is preparing for a work stoppage.  Their main competitor in Canada, Canadian National Railway, has stated they will not be able to accommodate shippers in the event of strike by Canadian Pacific Railway.

Are Strikes Good or Bad?

      Strikes can sometimes cause hardships for everyday people.  In 2011 or 2012, Metro Transit drivers of Halifax went on strike. The strike lasted approximately 6 weeks and it was during the winter.  A lot of people rely on buses to get back and forth to work and university.  A lot of people had to quit their jobs because they did not a viable means of transportation due to lack of money.  The bus drivers wanted higher pay, more safety and better work schedules.  Bus drivers get to pick their schedule of when their start time and which routes they will drive.  This picking of schedules is done by seniority.
       Was their anyone compensation for the public who had to quit their jobs? No there was not.  A goodwill gesture, Metro Transit made the buses free for 2 weeks to help their passengers financially.

         Union employees get paid more than regular employees to the same type of work.  I recall being told by someone in 2005, that their friend got paid $24 an hour to work at Canada Post's sortation plant in Halifax.  Canada Post is unionized.  Courier companies like Purolator and Sameday Worldwide pay their dock employees a lot less. Often times the courier companies work would be harder physically than Canada Post, which has lots of letter mail.

     When I was at Dalhousie University, the professors went on strike about 2 weeks before final exams. All classes were cancelled obliviously, or that was what we were told.  One professor decided to teach his class during the strike saying that you guys are paying for this course.  A few days before exams were scheduled to start, the strike was over.  A lot of students were stressed out during the strike wondering if their semester and possibly year ( full-year courses) were in jeopardy.
    Years ago, that a bus driver was suspended for taking his lunch break at a different time that when is lunch was scheduled.  The driver was late due to an accident and construction along his route.  The bus driver was part of a union.  So, his suspension lead to his fellow bus drivers walking off the job.  Did any of the bus drivers get fired?  No bus driver lost their job.  If a non-unionized employee did this, they would be fired instantly.

   When not a part of a union, there is no protection in a job.  A boss or fellow co-worker could scream at you and such.  If you quit your job, you will have a hard time to convince the employment insurance office that you had a valid reason for quitting.  Therefore, your source of income is lost completely as there is no job income or employment insurance income.  We all have been there or know of someone that quit a job because of a toxic work environment.
    Some worksites will not even allow non-unionized workers on site.


     Strikes can be good or bad depending on the individuals involved.  A strike can lead to better working conditions and higher pay for the employees involved.  The downside is that the public can drastically affected.  An example of the latter is when public transit goes on strike.  The travelling public could be left without a reasonable cost effective way to get to and from work.

Disclosure: Long WJA.TO

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Monday, May 21, 2018

How Events Affect The Markets

         The prices of stocks move up and down daily. More often than not, the fundamentals of the company do not change every single day.  The price of a stock goes up when there are more buyers than sellers and vice versa.  When an investor buys a stock on the stock market, the company does not make any money from you from this purchase.  The investor is basically buy shares from another investor (seller).  Besides the normal operations of the business, a business can also make money from selling of shares through an initial public offering (IPO) or offering shares for sale.

 Major Events in Canada


        Over the past several months, there has been an ongoing battle between the provincial governments of Alberta and British Columbia and the federal government. The New Democratic Government (with help from the 3 Green Party MLAs) of British Columbia are against the expansion the Trans Mountain Pipeline that will increase the flow of oil from Alberta to British Columbia.  The expansion of the Trans Mountain Pipeline would allow Alberta to gets its resources to foreign markets beside the United States and within Canada.
        With the United States being the only country that receives Alberta oil and gas, Canada receives a lower dollar amount than what the corresponding products trade in the markets. Oil and gas moves by rail, truck and pipelines.  A few years ago, there was a major accident in Lac-Megantic, Quebec, involving the 72 crude oil rail cars rolled down an incline. Some of these cars derailed and caught fire.
        The pipelines are operating at full capacity, so the next option is transport by rail.  Although the government of  Canada and the US government have brought in regulations to improve rail safety, transporting oil and gas via trains is dangerous.  So the push is to have a safer alternative, and that safer alternative is pipelines.
       The NDP government of British Columbia campaigned on being against the pipeline expansion.  This government is concerned with the possible spills on their lands and in their coastal waters.  The expansion of the Trans Mountain pipeline would bring increase tanker traffic on their coasts.  The current Trans Mountain pipeline has been in existence for approximately 6 decades.
       The NDP government of British Columbia is using every tool at their disposal to try to stop the expansion of the Trans Mountain Pipeline.  The NDP government of Alberta and federal government are saying the pipeline will be built and that the pipeline falls into federal jurisdiction.  The Alberta government has passed a bill that will allow Alberta to restrict the flow of resources to British Columbia.  The governments of Alberta at the federal level have stated they will make an large investment in the pipeline to make sure it gets built.
       Kinder Morgan Canada has publicly declared a deadline of May 31 to proceed with the expansion of the pipeline or not.  A representative of Kinder Morgan Canada has recently stated that the likelihood of the project going forward is low despite due to the environment of protestors and opposition to the pipeline.
        As a result of the pipelines running at full capacity, the rail companies have benefited from increased use of rail cars to transport crude oil.

WestJet Airlines Potential Strike

   Canada has 2 major airlines.  These 2 major airlines in Canada are Air Canada and WestJet.  About a year ago, the pilots of WestJet joined a union.  Prior to that, employees of WestJet joined a union.  A couple of weeks ago, the pilots of WestJet voted 91% in favor of a strike. The pilots said , as part of a goodwill gesture to WestJet Passengers, they will not strike during the Victoria Day long weekend. So the pilots go walk off the job on Tuesday.
    WestJet Airlines have stated they will fully refund fares to passengers affected in the event of a strike.
    WestJet Airlines (WJA,TO) have recently released their earnings that were negatively affected by the rising fuel costs.  Their earnings report. along with the possibility of a strike, has caused investors to flee which lead to the stock to fall below $20 per share.


     The events that unfold on a daily basis can cause markets or , in particular, specific stocks to drastically move in one direction.  When their is rather bad news,  investors flee in droves and this causes a large drop in the price of a stock.
     If the WestJet pilots actually do strike, the federal government is likely to get involved real quick as to eleviate the incoveniece to the travelling public and people who use the airline as part of their business.
   How will the markets react in the next couple of weeks.  If Kinder Morgan decides not go ahead with the pipeline expansion or the NDP government will not allow the pipeline to be buidt, this will cause the price of Kinder Morgan and likely other companies in the same price to faul in value.

Disclosure: Long ENB.TO, ERF.TO, WJA.TO, CNR.TO

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Saturday, May 5, 2018

Dividend Income Update - April 2018

        The month of April 2018 is another month of dividend income landing in my accounts. This money is used to help pay my expenses if it is needed. If the money is not needed, it is ALL used to purchase new investments to further increase my cash flow.

 Non-registered Accounts 

  • Bank of Nova Scotia (BNS) - $16.40
  • Bank of Nova Scotia (BNS) - $29.49    (Transfer Agent) 
  • Bell Canada Enterprises (BCE) = $75.50
  • CIBC (CM) - $37.24
  • Cineplex  (CGX) - $14.00
  • Enerplus (ERF)  -$ 5.58
  • Dream Office REIT   (D.UN)  - $52.58
  • Restaurant Brands International (QSR) - $57.26
  • Rogers Communications Class B (RCI.B) - $96.00
  • Shaw Communications (SJR.B)    - $19.75

  • A&W Royalties Income Fund (AW.UN) - $5.17
  • Boston Pizza Royalties Income Fund   (BPF.UN) - $26.91
  • Cominar REIT (CUF.UN) - $10.80
  • iShares 1-5 yr Laddered Canadian Corporate Bond ETF (CBO) - $0.57
  • Dream Office REIT   (D.UN)  - $14.00
  • Horizons Natural Gas Yield ETF (HNY)  - $6.94
  • Killam Properties REIT (KMP.UN) - $  16.11
  • TFI International (TFII) - $10.50

Total = $494.80
   Restaurant Brands International (QSR.TO) pays its dividend in US dollars.  The amount above represents the Canadian dollar equivalent amount deposited to my brokerage account.

    I received a total of $494.80 in dividend income for the month of April 2018.  This represents a 17.4%  increase from 3 months ago and 10.72%  increase year over year.  

    I received $0.00 from option premiums within my investment accounts in April 2018.

    I will update my dividend income tab with the new amount I will include my option premium income also.  It is great to see money from passive income sources deposited into my brokerage account every single month.

How was your dividend income for April 2018?

Disclosure : Long all securities above.

Photo Credit: www.mipaq,

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Thursday, May 3, 2018

Portfolio Update - April 2018

The month of April is now behind us.

The price of oil for WTI barrel of crude oil is trading over $65 dollars. The price seems to have found some support due to the OPEC cuts made during the past several months. Currently, the ongoing dispute involving the expansion of Kinder Morgan'sTrans Mountain pipeline. The expansion of the this pipeline would triple the capacity of oil from the oil sands that will allow the product to reach foreign markets.

The expansion of the Trans Mountain pipeline have lead to dispute between Alberta and British Columbia. The federal government is said to have federal jurisdiction and says the pipeline will be built despite the objections of the BC NDP government and BC Green Party. They are also protestors trying to block this pipeline expansion as they are worried about a possible spill on land or on the BC coast. Also, the expansion of the pipeline will mean more tanker traffic on the southern coast of British Columbia. The Canadian segment of Kinder Morgan, has publicly stated they do not think the pipeline can be built due to all the "fighting" and protestors that are currently at play. Kinder Morgan gave a deadline of May 31, to be able to go ahead with the project.

The price of gasoline in southern BC have reached record highs. Recently, Alberta passed legislation that will enable it to restrict the movement of its resources out of the province of Alberta. Basically, we are currently seeing a trade war between provinces. They have no exercised restricting their resources as of this date.

Portfolio Activity

During the month of March, I wrote about an option trade in WestJet Airlines. On April 20 2018, the short put option in WestJet was assigned. When a put option is assigned, the net premium received is substracted from the cost of the purchase. I sold 2 put contracts with strike price of $23 the adjusted cost basis of my purchase is $4496.90.

     ACB = # of contracts *100 *strike price - net premium received + option assignment fee

My brokerage currently has a $24.95 option assignment fee. Some brokerages have an option assignment fee while others do not.

WestJet Airlines (WJA.TO) trades on the Toronto Stock Exchange. WJA.TO currently pays an annual dividend of $0.56 per share. This option assignment increases my annual dividend by $112.00.
I will sell cover calls on this position, but have not been able to find a reasonable premium to write a call.

On April 25, I purchased 33 shares of Brookfield Renewables Partners LP at a cost of $33.48 per share for a total cost of $1274.91. I purchased my shares inside my TFSA. Brookfield Renewables Partners LP (BEP.UN.TO) trades on the Toronto Stock Excange. The company is also listed on the New York Stock Exchange under the ticker symbol BEP.

BEP.UN pays a distribution in US dollars and is converted to Canadian dollars. BEP.UN pays a distribution of $1.96 per year in US dollars. At the time of purchase, this purchased added $83.07 to my annual dividend/distribution.

Shares Purchased Via DRIP

0.373068 unit of BNS.TO @ $79.0473 for a total cost of $29.49 (transfer agent)

BNS.TO currently pays an annual dividend of $3.28. This DRIP adds $1.22 to my annual dividend income.


Dividend Increases

On May 2, Cineplex reported earnings. All the financial numbers were down YOY. The 2 metrics that were up are box office revenues per patron and concession revenues per patron. Cineplex is in the process of transforming itself into an entertainment company which will include movies instead of just a movie company. These projects like The Rec Room has high upfront cost. Cineplex (CGX.TO) has announced small dividend increase of $0.06 per share per year. The dividend was increased from $1.68 to $1.74, which represents an increase of 3.57%. This increase adds $6.00 to my annual dividend income.

This increase of $6.00 is equivalent to investing $171.43 of my own money at a 3.5% yield.


As of May 3, the value of the portfolio is $107516.98. This is a 1.159% increase over last month's total. The spreadsheet he investment tab above has been updated.

Disclosure: Long BEP.UN.TO,BNS.TO, CGX.TO

Please Note: All stocks are from the Toronto Stock Exchange except TTR which trades on the Venture Exchange.


I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.