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Walmart fights with Visa, and Ottawa’s CCB money goes out: BUSINESS WEEK WRAP


Most Canadian families got some extra money in their bank accounts this week via the first instalment of a new program pitched in the last federal election.

The new Canada Child Benefit program replaces previous programs, and goes even farther, its backers say.

The average family will get about $ 2,300 more per year than under the old plans. It may feel like free money to lucky recipients, but the ambitious social program has a heavy cost to the public purse, with some estimates putting it as high as $ 22 billion over the next five years.

That has many cost-conscious critics saying it’s unsustainable.

“The program is going to be more expensive, even when you cancel out the other programs it’s replacing, It’s going to be a cost of an additional $ 3 [billion] to $ 5 billion a year,” Aaron Wudrick of the Canadian Taxpayers Federation told the CBC this week. “And that’s coming at a time where we’re running a fairly sizable deficit. So that is a concern to us.”

Credit card fee fight ramps up

It was a milestone week for a Goliath versus Goliath battle in the retail sector, as the world’s largest retailer fights with the world’s largest payment processor over fees — and consumers are stuck between the two.

Walmart stopped accepting Visa cards at three Thunder Bay-area stores this week, saying the fees the credit card service charges to process sales are too high. And if they can’t come to a deal, Walmart says it will soon ban Visa at all of its Canadian stores.

On The Money-Credit Card Annual Fees

Walmart and Visa are fighting over fees, and Canadian consumers are pawns in the fight. (Elise Amendola/Associated Press)

“Walmart is using its market muscle against the largest retailer in the world,” Carleton University business professor Ian Lee said. 

Walmart’s business model is built on economies of scale — it can demand cheaper rates from suppliers because it is so large and can promise such huge sales. But Walmart is in a constant push to cut costs as low as possible.

“They want to drive that rate down even more, because when you have the sales the size of Walmart,” Lee said, “if you can even move that dial down, that needle down by even two-10ths of one point, it makes an enormous difference on $ 500 billion in sales.”

Elon Musk’s ‘master plan’ 2.0

Tesla was back in the news this week, as CEO Elon Musk revealed the electric car manufacturer’s so-called “master plan” for the coming years. The last time the company tipped its hand was 2006, when it said it planned to do things like expand their network of charging stations and release an affordable mass-market model. 

With those goals achieved, Musk tipped his hand to what the company has up its sleeve moving forward on Tuesday.

Tesla plans to make heavy trucks, Musk said, and add solar panels to its electric cars. There was also nebulous talk about getting into ride-hailing — but with a fleet of self-driving cars.

It all sounds very exciting, but Tesla’s critics say the company is well known for trumpeting ideas that are already out there and claiming them as its own.

Still, when Musk talks, people listen. Which makes anything Tesla has to say news. 

“It’s sexy. It’s cool,” said Josipa Petrunic, CEO of the Canadian Urban Transit Research and Innovation Consortium. “[Now] it’s not just wonkish utilities and public transit agencies talking about this. It’s now a cool person in the auto landscape with sexy cars saying this can be done.”

Other stuff

Those were just a few of our offerings you may have missed this week. Be sure to follow us on Twitter for more, and to always stay up to date. In the meantime, here’s a day by day list of our most read stories this week.

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Friday

CBC | Business News

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