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Carillion's collapse leaves Canadian road, hospital, military contracts in question

A deeper dive into the day's most notable stories with The National's Jonathon Gatehouse.

A deeper dive into the day's most notable stories

U.K.-based Carillion PLC, which was forced into bankruptcy on Monday, has 23,000 workers around the globe including 6,000 in Canada. Its Canadian contracts range from highway snowplowing in Ontario and Alberta, to property maintenance for hospitals, airports and malls across the country. (Darren Staples/Reuters)

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  • Canada could feel widespread effects as Carillion goes bust
  • North Korea keeps on rockin' in the not-so-free world with its Olympics announcements
  • Tunisia's winter of discontent as protests spread

Global builder Carillion bankrupt

The collapse of the United Kingdom's second-biggest construction firm seems set to reverberate around the world, including Canada.

Carillion PLC, which was forced into bankruptcy this morning, has 20,000 employees in Britain where it has been busy with more than 450 government contracts, including building hospitals and a high-speed rail line, and managing schools, military housing and prisons.

A woman cleans a door at Carillion's headquarters in Britain Monday after the company announced it is entering liquidation. Carillion has extensive contracts in Canada. (Darren Staples/Reuters)
It's a big enough deal to spur Prime Minister Theresa May to call a special meeting of the Cobra committee, which oversees emergency coordination.

During a debate in Parliament today, one MP asserted that the now non-functioning company has been providing cleaning, catering and other management services to 50 prisons, 9,000 schools, 200 operating rooms, and hospitals totalling almost 12,000 beds.

The company also has an extensive presence abroad, with 23,000 workers around the globe including 6,000 in Canada.

Carillion Canada is the country's largest road service contractor, responsible for plowing and maintenance along 40,000 kilometres of highways in Ontario and Alberta.

It has been involved in a number of high-profile construction projects, including the ongoing renovations of Toronto's Union Station — although the city parted ways with the company in 2014 over ballooning costs and performance issues.

In a statement released Monday, Carillion says it had no choice but to go into liquidation after weekend talks with creditors and government officials failed. The company has debt of more than than $2.6 billion, as well as a $1 billion pension deficit. (Aaron Chown/Associated Press)
A subsidiary, Outland, manages remote works camps across the country for mining, forestry and oil and gas firms. A property services division looks after some of Canada's largest airports, malls, commercial buildings and educational institutions, as well as hospitals in Toronto, Ottawa, North Battleford, Sask., and Nunavut, as well as base housing at CFB Petawawa.

The company's compulsory liquidation comes after the failure of last-ditch talks for a credit lifeline.

Carillion PLC is carrying more than $2.6 billion in debt, as well as a $1 billion pension deficit. It has been in trouble since the summer when it announced it was losing money. By Friday, its market capitalization had shrunk 93 per cent.

It's not yet clear what effect the death of the parent firm will have on Canadian operations.

Carillion has maintenance contracts in Canada for thousands of kilometres of roads, as well as malls, hospitals and private buildings. It's also involved in Canadian construction projects. (Yui Mok/Associated Press)
But there have been signs that not all was well. In September, for example, Ontario's Ministry of Transportation announced that it had reached a "joint decision" with Carillion to end an 11-year maintenance contract for the highways in Muskoka-Parry Sound, five years early.

There had been complaints about the quality and frequency of the work, especially during the area's frequent snowstorms.

A new firm is supposed to take over the region's road maintenance in September this year.

Keep on rockin' in the not-so-free world

Officials from North and South Korea met today for the second time in a week in an effort to iron out details of the Hermit Kingdom's participation in the Pyeongchang Winter Olympics.

The talks were held at Panmunjom, a.k.a. the truce village, in the demilitarized buffer zone between the two nations. They resulted in one concrete development, an announcement that the Samjiyon Orchestra — an unknown musical group, at least in the West — will play at the Games.

The head of South Korea's delegation, Lee Woo-sung, leads his team across the border for a meeting with North Korean officials on Monday. (Getty Images)
But the inclusion of a very recognizable face in the North Korean delegation has observers betting that they know who else will be entertaining the crowds next month. Hyon Song-wol is the lead singer of the country's most famous pop group, the all-female Moranbong Band.

Formed in the summer of 2012, with its members reportedly hand picked by Supreme Leader Kim Jong-un, Moranbong is supposed to be the North's answer to the South's infectious and ultra-popular K-Pop.

Members of North Korea's Moranbong Band leave their hotel in Beijing on Dec. 10 after a show. The invitation-only performances in China were aimed at strengthening ties between the traditional allies. (STR/AFP/Getty Images)
But in practice, their string-heavy music sounds more like '80s synth-pop filtered through Lawrence Welk.

Moranbong does perform some non-vocal Western covers, like Paul Anka's My Way. But the majority of its act is composed of gaudy, patriotic numbers like My Country is the Best, and what might best be termed as "message songs," like This Land's Masters Say.

Here's one of Moranbong's biggest hits, With Pride. "We are unique in this world, in our socialist country," go the lyrics. "Let's leave the others behind with pride."

Foreign music is strictly outlawed in North Korea — a ban aided by the fact that less than two per cent of the country has access to the internet, and only one per cent has satellite TV.

But domestically engineered pop is ubiquitous, as this Vice piece notes, with the population in Pyongyang awakened at 6 a.m. each morning by loudspeakers blaring "Where Are You, Dear General?" by the Pochonbo Electronic Ensemble.

(Hyon Song-wol was also their lead singer. Here she is performing the hit Excellent Horse-Like Lady.)

North Korean leader Kim Jong Un and his wife Ri Sol Ju watch a performance by the Moranbong Band in this undated photo released by North Korea's Korean Central News Agency (KCNA). (KCNA via REUTERS)
The musical olive branches, however, shouldn't obscure the fact that tensions on the peninsula remain at dangerous levels.

Tomorrow, a 13-nation summit begins in Vancouver, where the U.S., U.K., Canada, Australia and others will try to forge a plan to contain Kim's regime and force it back into the nuclear box.

And if that doesn't work, the Americans are busy making preparations for war, planning for new military exercises, mobilization centres for reserve call-ups, and dusting off contingency plans.

Perhaps revamping Hawaii's civil-defence system is a good place to start.

This smartphone screen capture shows an incoming ballistic missile emergency alert sent by mistake to hundreds of thousands of people on Saturday by the Hawaii Emergency Management Agency system. (Caleb Jones/Associated Press)

Tunisia's winter of discontent

Seven years on, Tunisians are wondering what has happened to their revolution.

The protests that led President Zine El Abidine Ben Ali to flee the country on Jan. 14, 2011, were born of two decades of frustration with a corrupt and repressive regime, and an economy that provided prosperity for only a select few.

People demonstrate in Tunis on Sunday, marking the seventh anniversary of the toppling of president Zine El-Abidine Ben Ali. (Zoubeir Souissi/Reuters)
The promise of the Arab Spring has largely failed to materialize. And for the past week, in the dead of North Africa's winter, crowds have again taken to the streets to demand change.

Thousands filled the centre of Tunis on Sunday to peacefully celebrate the anniversary of the dictator's departure and press for new reforms. "The government tricked people," activists chanted as they marched.

Tunisian President Beji Caid Essebsi greets bystanders as he arrives for a event in Tunis on Sunday. Tunisian authorities announced plans to boost aid to the needy in a bid to placate protesters whose demonstrations over price hikes degenerated into days of unrest. (Slim Abid/Associated Press)
At nightfall violence flared as police used tear gas to subdue a gathering of youths in the suburb of Ettadhamen.

It was a day after Beji Caid Essebsi, the new president, visited the community to announce $70 million in increased social benefits for the country's poor and middle class — a move he hoped would quell the outrage.

What began early last week as small, local protests against tax and price hikes that took effect on Jan. 1 has quickly ballooned into a national crisis, with running street battles between authorities and the disaffected. Police stations have been attacked and burned, stores looted, and at one point, rioters armed with knives and firebombs even took on a train.  

Riot police clash with protesters during demonstrations against rising prices and tax increases in Tunis on Jan. 10. (Zoubeir Souissi/Reuters)
One person has died in the unrest, and many more have been injured, including 100 police. The government says it has arrested 780 rioters so far.

Fixing the issues fuelling the anger won't be easy, however.

The Tunisian dinar has lost more than 60 per cent of its value since 2011, and inflation is running close to 10 per cent. More than 35 per cent of young people are unemployed.

Protesters carry flares and shout slogans in central Tunis on Sunday. Police stations have been attacked and stores looted in recent days in Tunisia as citizens protest tax and price hikes that took effect on Jan. 1. (Anis Mili/AFP/Getty Images)
The International Monetary Fund is demanding "urgent action" on the government's deficit in exchange for the loans — $2.93 billion through 2020 —  that are keeping the country afloat. The IMF is particularly keen to see the public sector, which accounts for half of Tunisia's spending, cut down to size.

Tourism took a nosedive following the 2015 ISIS-inspired beach attack that killed 38, and hasn't really recovered.

Attempts to attract more foreign aid have largely failed. And last year, there was a sharp increase in the number of Tunisian migrants trying to cross the Mediterranean.

Manoubia Bouazizi seen in 2011 with a poster of her late son Mohamed, the fruit seller whose self-immolation sparked the revolution in Tunisia and ignited the Arab Spring protests. (Fethi Belaid/AFP/Getty Images)
The Arab Spring began in Tunisia, in the dusty town of Sidi Bouzid, when a fed-up young fruit vendor named Mohamed Bouazizi set himself alight in protest in front of the local police station.

Seven years and six governments later, with little hope in sight, it appears in danger of ending there as well.

Quote of the moment

"I am not a racist. I am the least racist person you have ever interviewed."

- U.S. President Donald Trump, responding to the question that has been on many people's minds, as he arrived for dinner at one of his golf clubs last evening.

U.S. President Donald Trump, right, and House Majority Leader Kevin McCarthy arrive for dinner at Trump's golf club in West Palm Beach, Fla., on Sunday. (Kevin Lamarque/Reuters)

What The National is reading

  • Sri Lanka's president rejects move to let women buy alcohol (BBC)
  • Historic flight school could fall victim to pilot shortage (CBC)
  • South Africans vandalize H&M stores in protest of 'monkey' shirt (Africanews)
  • Young Emmanuel Macron wrote a steamy novel inspired by his wife, claims book (Guardian)
  • Reported hijab attack on 11-year-old girl 'did not happen,' say Toronto police (CBC)
  • Turkey vows imminent strike on Kurdish enclave in Syria (CBC)
  • Marvel draws up Chinese superheroes as it plots push into Asian market (Japan Times)
  • Fish collision may have sunk Sydney to Hobart race yacht (Sydney Morning Herald)

Today in history

Jan. 15, 1971: Television's Take 30 asks: What is smut?

Once upon a time, someone called Toronto "the smut capital of Canada" (a person who had apparently never been to Montreal.) Still, dirty books, the men who liked them, and the police morality squad were a combustible mix in the early '70s. And Paul Soles' mustache fits right in.

Take 30: What is smut?

53 years ago
Duration 26:22
Featured VideoPolice crack down, but pornography continues to sell. Take 30 finds a complex debate in Toronto, the country's "smut capital."

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Jonathon Gatehouse

CBC Investigative Journalist

Jonathon Gatehouse has covered news and politics at home and abroad, reporting from dozens of countries. He has also written extensively about sports, covering seven Olympic Games and authoring a best-selling book on the business of pro-hockey. He works for the national investigative unit in Toronto.