All posts by David Lostracco

Mice, bedbugs and other luxuries of student living in Halifax

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One of the many mice that infested Claire's home. Photo: Clair Zimmerman
One of the many mice that infested Claire’s home. Photo: Claire Zimmerman

A mouse or two never used to bother her, but within a few months she was overrun by them, they took over her walls and set up a colony in her kitchen turning her oven into a lavatory rendering it unusable.

 

When she moved closer to Halifax’s North End Claire Zimmerman thought she was done with the shady student living conditions of the South End– entering into her last year of school she headed for the greener pastures of a charming apartment in a historic home. Like many students she found herself in an unwinnable battle with a wealthy landlord to provide decent living conditions.

 

Every spring thousands of students leave behind on-campus dorms in search of rental homes for the next year, no longer protected by the social contract and reputation of their post-secondary schools and now finding themselves dealing with a growing number of profit hungry landlords that know every loophole in a broken system. The landlords know the students lack the time, know-how and resources to stand up for themselves and have the advantage of a highly competitive rental market.

 

Claire’s living conditions didn’t improve when one day she came home from class at King’s College to find bedbugs in her furniture. Like with the mice, she says the landlord put the blame of her. Claire and her boyfriend were made responsible for replacing their possessions that were destroyed by the infestations.

 

Health and Wellness Nova Scotia provides resources for bedbug infested residents, but they do not track the infestations because the bugs a seen as pests and do not spread disease.

 

Linda Passerini, a senior health consultant with Health and Wellness Nova Scotia says her office receives a number of calls about bedbugs, but there’s little she can do other than to refer them to the resources.

 

She says houses with clutter and less than frequent cleaning practices increase the chances of bedbugs and that can be more common with student living situations.

 

Meanwhile the landlord blamed Claire’s cat for the mice and bedbugs told her to get rid of it for a few weeks while she poisoned the mice. When Claire declined, she was eventually asked to leave the lease, prematurely ending her tenancy. By that point she was relieved to be free of the pests and moved on with her life.

 

By the end of her tenancy, Claire had to deal with a number of issues including leaks, mice, bedbugs, broken appliances, lack of heating and decaying walls.

Aftermath of the mice in Claire's home. Photo: Claire Zimmerman
Aftermath of the mice in Claire’s home. Photo: Claire Zimmerman

 

She thought of seeking recourse through the Nova Scotia Tenancy Board, but figured it was an unwinnable battle, as her landlord is a high-powered Halifax lawyer and Claire thought she wouldn’t stand a chance. Out of fear she did not want to name the landlord or the exact location of the home.

 

“I feel it’s a very Halifax thing, we (tenants) see it as our fault and because we’re students we feel powerless,” Claire says.

 

She’s not alone, in researching this story dozens of students shared horrific tales of their battle landlords over erroneous illegal fees, infestations, broken promises and substandard living conditions and a system that is failing those it seeks to protect.

 

Another student, Rowenna Gerlach entering her fourth year at Dal had a similar story.

 

Last year she and a group of friends rented an apartment on Barrington Street in a small complex. It is a historic property, but the warmth of the charm didn’t last when temperatures fell last winter. Because heating costs were included in the rent, they did not have control over the thermostat. despite endless pleas with the landlord, the group of girls were forced to wear jackets indoors in order to be comfortable in the apartment. The landlord continued to control the heat and as a result it was between 16 and 19 degrees celsius most the winter.

 

When a parent of one of the tenants got involved on her daughter’s behalf, she was subjected to an endless game of phone and email tag and nothing was ever done about the problem.

 

One night Rowenna was awoken by chunks of falling plaster from the ceiling covering a number of her possessions in the white chalky substance, once again replacement costs and blame was placed on her.

 

Rowenna and her roommates, like Claire considered taking the matter to the tenancy board, but lacked the time and know-how to do so.

 

Rowenna says she paid a deposit to the landlord in cash and the money is yet to be returned to her. She was not aware that according to the law a landlord can only demand a deposit if it is placed in a joint account with the tenant.

 

With vacancy rates across the province, city and the South End rising annually, landlords may be feeling the heat. The vacancy rate for three or more bedroom units in the South End has more than doubled since 2010 according CMHC statistics–students commonly live in such units

 

“I felt ignored and misled,” she adds “I feel because we were young they took advantage of us.”

 

Halifax's notorious Fenwick Towers. Photo: David Lostracco
Halifax’s notorious Fenwick Towers. Photo: David Lostracco

When she moved out, once again she scrambled to find a new place. When she hastily signed for a room in the notorious Fenwick Towers, only to show up on move in day with the apartment still inhabited by the previous tenants.

 

“We had to wait six hours in the parking lot with all of our things as they moved the people out,” she says.

 

The lease dictates that the flat would be “Professionally cleaned” before move in, but that promise was never kept.

Dal offers free legal aid to students dealing with tenant’s rights issues. Photo: David Lostracco

Although students may feel overwhelmed and helpless there are some resources to help them.

 

Dal offers free legal aid services to students and a number of online resources.

 

Fiona Traynor is a community legal worker at Dal’s legal aid services, she says the office gets a constant flow tenant-landlord disputes and requests for help navigating through the ever-changing laws. 

 

She says a growing problem is the number of landlords trying to collect various types of deposits and fees illegally.

 

She also says they can help with damage caused by bedbugs and mice if a landlord isn’t doing their part.

 

She urges student tenants to keep a paper trail, take pictures of damages and most importantly to read the act and the lease before making their decision.

 

For the most part it’s a losing battle as many students don’t do their homework before moving in and are overwhelmed as problems arise. As a result she says it’s mostly a reactive approach by students who come to the office after a problem has existed for a while.

 

She thinks something as minor as an inspection done with the landlord before moving in can be vital in proving negligence down the road.

 

“Read the act and ask a lot of questions before moving in.”

Another option is for students to get tenant’s insurance, but it isn’t easy.

 

Keith an insurance broker, who did not want to be identified says that a growing number of landlords are requesting that tenants have policies.

 

He recommends it for two reasons: to protect the tenants’ belongings and legal protection against liability.

 

He says students could be more likely to face liability claims. For instance a student learning to cook or operate an appliance for the first time could cause a fire or significant damages to property and insurance covers that.

 

He says it’s not as simple as it seems, many insurance companies will not ensure students because oftentimes there are three or more unrelated people living together in the same dwelling. He says alternative providers and custom policies might be the only options and they can be very costly as typical student dwellings are graded as a higher risks than simple family homes.

Halifax's "Peninsula South" region has the highest rents east of Montreal. Photo: David Lostracco
Halifax’s “Peninsula South” region has the highest rents east of Montreal. Photo: David Lostracco

 

Last year rent went up 1.4 per-cent in the South End, according to Guillaume Neault, a  CMHC analyst, students of Halifax have a few things working against them.

 

He says the location of the schools happens to overlap competitive rental areas, rent rates are already high and are rising each year.

 

He says the age of the buildings can also lead to premium rates as a number of students live in historic properties.

 

According to  his research 33 per-cent of South End dwellers spend 30 per-cent or more of their income on rent.
Note: Attempts were made to speak with the various landlords, but none have responded.

Higher costs, more impact? Inside the books of Halifax’s United Way

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For the United Way Halifax change is costing more. Photo: Creative Commons

Dream home lotteries, donations and bake sales have brought in a lot of cake for charities across Canada through the United Way of Halifax over the years, but overhead, operating costs and a growing competition for your donations has stagnated the organization.

 

A data analysis using their own annual financial reports, audited statements and the Canada Revenue Agency tax records has revealed that while their revenue is declining, director compensation, travel and vehicle expenses and occupancy costs are increasing.

 

Evelyn Barkhouse, chief operating officer of Halifax’s United Way says, “We are continually trying to lower expenses, cut the cloth where we can, but we have to operate a business.”

The United Way of Halifax is designated as a “Public Foundation” by the CRA not a “Charitable Organization” as many people assume. Public foundations are essentially fundraising organizations for other charities.

Barkhouse says they have gone as far as considering double-sided printing and copying to trim costs.

18 per-cent of expenses are classified as fundraising costs, however since 2010 30-39 percent of the United Way’s annual revenue has gone to costs other than funding for other charities–their primary objective.

 

Part of their expenses go toward what the organization calls “Community Impact”, a number of small local programs funded by the organization. Peter Mortimer who oversees this part of the United Way says it aims to fund local research-driven programs in Halifax.

 

He says the United Way’s role is as a project manager and ties together fundraising and vision.

 

“It about making a measurable lasting impact,” he says.

 

Despite higher expenses, the United Way has increased their funding for community impact annually each of the past five years.

 

According to their own audited financial statements community impact accounts for 46 per-cent of total expenses, but only results in 15 per-cent of money invested into the community. Community impact expenses include a portion employee salaries.

 

Mortimer says the expenses would be higher if the United Way used external contracted labour to run the program.

Another constantly rising cost for the organization is their 7000 square foot facility in the heart of downtown Dartmouth.  In 2013 occupancy cost them $230,000, $55,000 more than the same building cost them in 2009 according to their CRA filings.

 

When asked if they considered moving operations to a less costly neighbourhoods like Spryfield– a neighbourhood that the organization sought to make an impact in–Barkhouse says they had not considered such a location. She says that when the United Way was looking for a new home in 2002, they looked in Downtown Halifax and Bayers Lake- both of which she says would have been more costly than Dartmouth at the time.

 

The United Way operates a separate organization called The Tomorrow Fund started in 1985 with the hopes of investing funds to offset the operating costs of The United Way with interest from long-term investments, but thus far it has failed to do that. The fund remains active and the organization hopes it will eventually realize its purpose.

 

 

The problems with big charities

 

United Way of Halifax’s Detailed Expense Breakdown: 

Experts agree that charity is a big business in Canada.

 

“I’m more surprised when I see low operating costs, than high ones,” says Tom Juravich, a professor of sociology at The University of Massachusetts.

 

He researches and teaches how to investigate not-for-profits and charities in both The United States and Canada. He operates a website devoted to providing resources on the subject.

Juravich says high expenses and compensation costs are commons problems in both Canada and the United States. He notes working as director or senior manager of a charity can be extremely profitable.

 

He says most people are not entirely sure how much of the money they are donating is actually going to the disclosed cause.  It worsens for international charities operating programs outside of North America, but he says there are plenty of charities lacking transparency domestically as well.

 

Juravich says big established charitable brands like the United Way are more accountable than many smaller charities, but they have high operating costs due to their size and the amount of money they raise.

 

Charity Intelligence Canada researches and grades the level of transparency of Canadian charities, in their most recent grading The United Way of Halifax received a ‘B’ for transparency, but they also rated it as a four-star charity overall, which is the highest grade they give out.

 

You can see their grading criteria here.

 

How the United Way works

 

There are two main ways of donating money to The United Way of Halifax:

 

1) Donate directly: You may chose to donate to local programs by donating to the “General Fund”.

 

-or-

 

2) You can donate to your charity of choice through United Way’s designations.

 

If you donate directly The United Way says your money will be used locally, however if you donate through them than you can pick any organization that is recognized as a charity by the CRA.

 

Organizations the CRA recognizes include charities, non-profits and anything from hospitals to universities.

 

28 per-cent of donations to The United Way of Halifax are designated, because this money is technically raised by The United Way it is counted as a part of their revenue, even though in many cases it does not benefit local organizations or programs that have anything to do with the United Way.

The designated money in 2013 went to 1083 different organizations.

 

The organizations people chose to donate to through the United Way of Halifax ranged from cancer research to churches, to universities, to international organizations, to Rabbit Rescue of Ontario.

When asked if they were reconsidering a change the designation program to only include organizations approved by The United Way–as other United Way branches do– Barkhouse says they are not.

 

She says the goal is to promote gifts to their own organization, but they have no control over who people designate too.

 

The United Way takes a small percentage of the designated money as a processing fee.

 

They do not provide a breakdown of where designated funds go to, but the data analysis shows 28 per-cent of donations made through the program are designated.

 

Who’s at the top?

Catharine Woodman, CEO of Halifax’s United Way. Photo: Government of Nova Scotia

 

Managing the cake and eating it too, the CEO of the United Way of Halifax is Catherine Woodman.

 

She has been with the organization as the CEO since 2005.

 

Despite the financial stagnation and rising expenses, the top salary at the United Way of Halifax increased  from $80,000-$120,000 bracket to the  $120,000-$160,000 between 2011 and 2013.

 

Her responsibilities include overseeing the entire operation and being the face of the campaign.

 

Multiple attempts were made to contact Woodman for this story, but she was not available.

 

She is active on Twitter and Facebook.

 

Her social media presence is a mix of local initiatives, United Way news and vacation pictures from around the world.

Ontario’s cheap grocery battle

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Food Basics is Metro inc’s discount store in Ontario. Photo: Wikimedia Commons

Honey let’s go grocery shopping, milk is on sale!

You may have noticed that discount grocery stores in Ontario have been blasting out aggressive front-page ads lately featuring everyday items like milk, juice, bread, bananas and sugar at lower than expected prices, this high-cost/low-profit battle has led to Metro Inc.’s sluggish numbers in 2014.

In fact Metro Inc. might be close to losing the discount grocery market battle in Ontario because of it. It could also work out to being a smart move that decreases sales, but increases profits.

For years Metro’s Food Basics was a major force in the cheap food business, but heavy competition from Sobeys’ FreshCo, Loblaws’ No Frills and Wal-Mart has pushed their market share down.

Food Basic’s re-entered the staple-item-driven front-page flyer advertisements once again this year after the banner took a significant hit in market share in 2013. Basic’s went toe to toe with competitor’s ads, but three quarters into 2014 they are once again rethinking the strategy to preserve profits.

Perry Caicco is an analyst for CIBC who researches Metro for investors. He notes that Metro had stayed in the fight throughout the first half of 2014, but has significantly reduced their aggressive ads this summer.

This can be seen in their Canada Day ad that was less note-worthy than their competitors.

The impact seems to be most evident in their EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) across the board which is down in Q3 and annually from 2012 and 2013.  EBITDA is down 3.5 per-cent from last year.

According to their third quarter report net income is up slightly from a year ago, but Metro has not met the earnings projections made by CIBC. In Q3 sales were up 1.4 per-cent from 2013.

Rising commodity prices factor into cost and may be responsible for the sluggish stock price following the release of the third quarter results this week.

Generally stores keep prices in line with the competition and try to avoid shocking consumers with fluctuating prices every week, but over time they tend to sway with the longer market trends.

With staple items seemingly on the front-page of every competitor’s flyer every week, it remains to be seen how sales will be affected by Food Basics’ lack of aggression.

For example a 4L bag of milk may cost the customer $3.97 at a discount grocery store, but the company is losing nearly 2$ on that same bag.

For Food Basics this loss in margin might be too much to stomach.

Metro inc. declined to comment citing “competitive reasons” .

 

Price matching

Walmart leads the way with its no-limit price matching. Photo: Wikimedia Commons

Sorry we don’t do that here.

Another difference between Food Basics and their foes in the discount grocery business in Ontario is their price-matching policy.

Unlike FreshCo, No Frills and Walmart, Basics is not in the business of price matching competitors’ specials.

Where a customer can bring in a major competitor’s flyer into these stores and receive the advertised price, they can’t do this at Basics.

Walmart and No Frills have the most aggressive price-matching policies and FreshCo has a limited one. This may be causing a riff with Basics shoppers.

A 2013 poll done done by Redflagdeals.com, a popular consumer information website found that 60 per-cent of shoppers preferred No Frills, 29 per-cent FreshCo/Price Chopper and only 11 per-cent said they preferred Food Basics. Although the sample size was small it is likely indicative of Basic’s perception in the eyes of consumers.

Red Flag Deals visitors and commentators are informed consumers that care about getting a deal. Commenters are required to provide significant personal information to comment and partake in polls on the site including location. Many of the commenters on this subject have posted thousands of times on the site. The commenters praise FreshCo and No Frills’ price match policies as why they shop where they do.

Price-matching is costly to stores, but they know it is a strong factor in customer retention.

Both FreshCo, Walmart and No Frills advertise price matching on the front-page of their flyers every week.

Many retail companies see price-matching as a cost of doing business.

 

Cost of food and the front page

Bringing home the bacon might not be as easy as it used to be.

Recently released data from Statistics Canada shows that bacon prices in Canada are up over 25 per-cent in 2014 from a year ago.

Despite the aggressive advertising, as a whole Canadians are paying more for many staple food items in 2014.

Of the top ten food items costing Canadians more in 2014, 9 of 10 were meats, including hot dogs up nearly 18 per-cent and ground beef up 15 per-cent from 2013.

This might be why chicken has been a prominent front-page item amongst the discount banners this year. Chicken is costing consumers only one per-cent more this year.

Meat items are frequently featured on front-pages of flyers because they are not considered to be “Pantry Items”, meaning that customers are less likely to stockpile significant quantities as they would cans of soup.

The overall higher prices of these items increases the importance of aggressive promotions on them to shock and awe would-be customers.

Celery was the product that saw the biggest decline in price, costing consumers more than 20 per-cent less than a year ago.

Of the 10 food items costing Canadians less none were meats and 8 of 10 are pantry items including: peanut butter, flour and coffee.

Celery and Grapefruit were the only fresh items to make the list.

Massive class action progressing against drug causing breasts in boys

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Gynecomastia causes enlarged breasts in men. Photo: Wikimedia Commons
Gynecomastia causes enlarged breasts in men. Photo: Wikimedia Commons

Two Canadian law firms are teaming up and combining their class actions against Janssen inc. over an antipsychotic medication that caused gynecomastia (male breasts) in patients.

 

The drug, Risperdal was not approved for treating minors. It is a potent antipsychotic, but has been prescribed for treating ADHD in youths.

 

The product label only mentions gynecomastia as a side-effect for adults, but does suggest that metabolic side-effects were more prevalent in minors during testing.

 

To put it simply, Toronto lawyer Bryan McPhadden says, “We allege that they (the patients) were not warned correctly about the risks of gynecomastia.”

 

McPhadden’s firm is teaming up with Joseph Prodor’s Vancouver based firm in what now appears to be a unified class action against Janssen inc., a branch of Johnson and Johnson.

 

As recently as July, 24 McPHadden had been pursuing class actions separate from Prodor’s in a number of Canadian Provinces, most recently in Nova Scotia where a class action was launched on behalf Ryan Hanna, an 18 year of man from Sydney NS that had breast reduction surgery to reduce the breasts he developed after taking the drug for nearly a decade. The legal filings allege that the breasts were a direct result of years of prescribed Janssen inc. ADHD medications: Risperdal and Invega.

 

The drugs have a long legal history that has resulted in class actions across the globe, most notably in The United States where both citizens and States have sought and received financial compensation on behalf of boys who developed breasts as a result of taking the drug.

 

These lawsuits have centred around two key arguments: 1) the product labels did not indicate the risks associated with the drug and 2) the pharmaceutical representatives that sold and promoted the drugs acted unlawfully in their promotion of the drug for off-label purposes.

Risperdal comes in may forms, but is commonly prescribed as an injectable. Photo: Wikimedia Commons
Risperdal comes in may forms, but is commonly prescribed as an injectable. Photo: Wikimedia Commons

 

In Canada it’s a bit of a different case. Risperdal was never approved for treating minors; though in Canada doctors are allowed to prescribe any medication that they feel will help a patient. The Canadian cases our based upon the notion that patients were not warned of the risks of developing gynecomastia.

 

McPhadden's class action is not yet certified in Nova Scotia courts. Photo: David Lostracco
McPhadden’s class action is not yet certified in Nova Scotia courts. Photo: David Lostracco

Court documents show that weight gain was a known side effect of the drugs, but the plaintiffs argue that weight gain actually made it more difficult to detect the enlarged breasts.

For over a decade Philadelphia attorney Steve Sheller has brought and won several actions over the same drug. The cases are at various stages, but some have resulted in multi-million dollar payouts to the plaintiffs. The total paid out thus far in the US has been over an estimated 1.6 Billion dollars.

Sheller’s cases were strengthened by proving that J&J engaged in off-label promotional activities such as financial rewards for prescribing the drugs.

 

Sheller’s class actions took in many cases over five years to resolve and many remain in courts yet unsettled.

 

It remains to be seen how the cases in Canada will play out, but the McPhadden and Prodor’s consortium is encouraging to the plaintiffs’ cause.

 

The medical side

Risperidone3Dan.gif
Risperdal as a molecule. Grapic: Wikimedia Commons

Dr. Steve is an American physician who did not want to be fully identified due to the controversial nature of this case, he sympathizes with the plaintiffs, but also sees the ambiguous proof that the judgments rely on.

 

“Teenagers and young adults are very body-conscious and gynecomastia at that age comes at the worst possible time. It can be a huge blow to one’s self-esteem.  Although it is correctable, the treatment can be very invasive and carries some risk itself.“

 

Risperdal can cause an increase in a hormone called Prolactin, this is the cause most lawyers use for gynecomastia (male breasts) in Risperdal users.

 

However, patients with prolactin secreting tumors rarely get gynecomastia,but high prolactin levels have been blamed for gynecomastia for years.

 

A recent review of the medical literature said that Risperdal was “probably” associated with gynecomastia.  Dr. Steve says “probably” doesn’t by any means mean it does definitively cause gynecomastia.

 

Some doctors prescribed risperdal despite some early warnings in the literature.

 

“So as always, it’s not a slam-dunk.  The kids who were on this medication were pretty mentally ill to be put on it in the first place.”

 

Financial Implications

 

In their 2013 annual financial filings Johnson and Johnson acknowledges the numerous legal actions facing them.

 

Despite the 1.6-billion USD the company paid out to satisfy Risperdal legal proceedings in the United States in 2013, the company does not foresee ongoing legislation impacting their cash flow going forward.

 

The company does note that a large one-time payment could have an adverse temporary financial effect in a given quarter or period’s financial statement.

 

The company has extensive insurance against potentially catastrophic legislation or liabilities against them.

 

The Canadian and UK class actions against Johnson and Johnson over Risperdal are significantly smaller in the number of plaintiffs in the class and therefore the payouts are expected to be smaller.

 

Annual sales of Invega were up 6-million USD in 2013, but sales for Risperdal fell 7.5-million USD in 2013 and 17.5-million USD since 2011. The company lists competition from generic drugs as the reason for the decline and not the litigation surrounding the product.

 

The company’s earnings per share were up nearly 1 USD in 2013 and nearly 1.5 USD since 2011 and the company’s overall stock price increased 33 per-cent in 2013.

Interactive Map: Major Risperdal Related Legal Cases