Bank CEOs see federal COVID spending providing a soft landing

Kevin Orland, Bloomberg News

Canada’s nearly $300 billion in COVID relief helped the nation navigate the pandemic’s acute phase, and now in its second act is poised to provide a soft landing for the economy.

That’s the view from the chief executive officers of some of the country’s top banks who spoke at the Bank of Nova Scotia financials summit on Wednesday. 

The Bank of Canada’s interest-rate increases are cooling parts of the economy. Still, consumers and businesses have extra cash on their balance sheets, which should help reduce the hit, the executives said.

“You see that in consumer deposits, you see that in business deposits -- the stimulus of COVID relief is still in the system,” Canadian Imperial Bank of Commerce CEO Victor Dodig said at the conference. “That will take some time to run off.”

The Bank of Canada on Wednesday delivered its fourth straight outsize interest-rate hike and said that rates will need to rise further to drag inflation down from four-decade highs. The increase follows a surprise 100-basis-point hike in July and half-point raises in April and June, making the current tightening effort one of the most aggressive ever.

Royal Bank of Canada CEO Dave McKay said he’s not concerned about the rate increases setting off a sharp recession because of the extra cash on hand, as well as the country’s strong labor market.

“As we play those forward in different scenarios, we see that as a shock absorber to any hard landing and therefore a quicker recovery,” McKay said. “That’s how we get our head around that this should be shallow and shorter, and therefore we should bounce back more quickly.”

McKay gave the Bank of Canada’s actions so far a vote of confidence, saying they’re reducing growth in mortgage loans, slowing purchase activity on credit cards and cooling investment- and non-investment-grade credit markets.

“That’s what the Bank of Canada wants,” McKay said. “It wants a slowing of activity. It has to start to collapse demand to get inflation down. So all of those are positive signs.

Cineplex to push for payout from Cineworld despite bankruptcy

The Canadian Press

Cineplex Inc. says it remains focused on recouping the value of a judgement against Cineworld Group PLC despite the U.K.-based movie theatre operator's bankruptcy filing in the U.S.

Toronto-based Cineplex was awarded $1.24 billion in damages after Cineworld walked away in 2020 from its $2.18-billion deal to buy the Canadian theatre chain, while Cineplex filed documents early this year pushing for an even higher payout.

Cineplex says it will explore all avenues available to advance its claims against Cineworld, though it notes that the movie chain indicated that it believes the bankruptcy filing has stayed Cineplex's claim against the company.

Cineworld, which has built up US$4.8 billion in net debt not including lease liabilities, said it had financing in place to help ensure its operations continue as usual while it undergoes a reorganization, with an expected exit from Chapter 11 bankruptcy during the first quarter of 2023.

A hearing on Cineworld's appeal of the judgment against it, and Cineplex's cross appeal, is scheduled for Oct. 12 and 13, but Cineplex notes that the bankruptcy proceedings add extra uncertainty to the outcome and Cineworld's ability to pay any damages awarded.

While Cineworld struggles with debt and lower-than-expected attendance, Cineplex said it remains confident in the recovery of its business with August volumes stronger than expected and its outlook optimistic for the months ahead. 

Major telecoms agree to emergency outage deal: Minister Champagne

The Canadian Press

The federal industry minister says Canada's major telecom companies have reached a formal agreement to "ensure and guarantee" emergency roaming and other mutual assistance in the case of a major outage.

The deal comes after a massive Rogers Communications Inc. service disruption on July 8 that affected millions of Canadians.

In the days after the outage, Minister of Innovation, Science and Industry François-Philippe Champagne directed the CEOs of Rogers and other telecom companies to develop a backup plan to prevent a similar scenario, giving them 60 days to do so.

He says the companies have committed to assist one another to ensure 911 connections aren't affected in the event of an outage.

Champagne says the agreement is only a first step in his network resiliency agenda.

He also says he is taking additional steps, including directing the Canadian Security Telecommunications Advisory Committee (CSTAC) to come up with further measures within six months to ensure robust and reliable telecom networks across the country.

This report by The Canadian Press was first published Sept. 7, 2022.

New air passenger protection rules come into effect

The update comes as the Canadian Transport Agency tries to close a loophole that left some passengers unable to secure cash refunds after pandemic-related flight cancellations.

Starting Thursday, airlines will be required to issue a full refund for cancellations and delays if passengers are not placed on a new flight within 48 hours, including for reasons outside of the airline's control. 

Previously, the passenger rights regime only required refunds for flight disruptions that were within the airline's control, which excluded situations ranging from weather to war to unscheduled mechanical issues.

As well as a cash refund, the ticket price may also be reimbursed through credit or vouchers and is to be paid in full by the airline within 30 days. 

The original Air Passenger Protection Regulations were established in 2019, before air travel demand collapsed due to the COVID-19 pandemic.

Liberals to hike GST rebates, help with rent payments in new affordability plan

Mia Rabson, The Canadian Press

The federal government intends to temporarily hike GST rebate cheques in a bid to ease some of the hurt of inflation for lower income Canadians.

Prime Minister Justin Trudeau will announce a three-pronged plan to address affordability at the Liberal cabinet retreat in Vancouver today.

Cabinet ministers are gathering ahead of the fall sitting of Parliament with the economy and the cost-of-living crisis top of mind.

Two federal sources familiar with the plan say it will look to double some GST payments for six months, include help for Canadians struggling to pay their rent, and launch the first step of a national dental-care program.

The Canadian Press granted the sources anonymity to discuss matters not yet made public.

The Liberals already promised a $500, one-time top up to the Canada Housing Benefit and to start phasing in a national dental-care program in last April's budget.

Both are key demands from the NDP in the confidence and supply agreement that party made with the Liberals.

NDP Leader Jagmeet Singh has made it clear that not moving on those priorities could kill that pact that would see his MPs support the Liberal minority government on key votes until 2025.

Singh has also been asking for top-ups to the GST rebate and Canada Child Benefit, but neither were included in the agreement with the Liberals.

The Canada Child Benefit is not expected to be included in today's plan, but an increase to GST payments for six months is part of it.

Canadians with low and modest incomes based on their annual tax filings receive a GST cheque every three months as a type of rebate for some of the GST they pay.

The current benefit is up to $467 a year for a single individual with a maximum income of just over $49,000, $612 for married or common-law couples, and another $161 for children under 19 years old. The amount received is adjusted depending on income.

The payments are indexed to inflation but the increase in 2022 is based on inflation in 2021, which means payments for the GST credit and most other federal benefits went up 2.4 per cent.

Inflation averaged more than twice that in the first seven months of 2022.

The cabinet meeting comes nearly one year after the Liberals held on to power in the 2021 election, but also days before a new Conservative leader is named. 

Trudeau kicked off Wednesday's cabinet meeting with a speech acknowledging there are big challenges facing Canada and the world, but that he is energized to keep going and bring about the solutions the Liberal government is planning.

His comments, confirmed to The Canadian Press by two sources with knowledge of what was said, matched his repeated assertions, both publicly and privately, that he has no intention of stepping down before the next election.

Ministers were briefed at their meeting Wednesday afternoon by Michael Sabia, who is the deputy minister of finance, and private-sector economists, who helped paint a picture both of Canada's economy and inflationary pressures, and the global situation.

Finance Minister Chrystia Freeland said Wednesday there would be discussions around the table about how best to help Canadians most feeling the pinch of inflation, but without disrupting the federal fiscal balance.

The Liberal budget promised to introduce a national dental-care plan starting with coverage for children under the age of 12 in families with a household income below $90,000.

The first phase was expected to cost $300 million, rising to $1.7 billion annually once a full dental-care plan was implemented.

It is a complicated process because health delivery is a provincial responsibility and most provinces have some sort of dental-care coverage for low-income families already.

A $500 one-time top up to the housing allowance this year was budgeted to cost $475 million.

Europe’s Newest Reactor Is Ramping Up Much-Needed Power Supply

Lars Paulsson, Bloomberg News

(Bloomberg) -- Power output at Europe’s newest reactor is set to hit a landmark 1,000 megawatts overnight as it ramps up toward full production, bringing some relief to the region’s strained market.

Finland’s Olkiluoto-3 nuclear unit will provide much-needed supplies to the Nordic nation’s taut power system when it reaches full capacity later this autumn, after imports from Russia were cut completely in May. The Finnish grid has warned of rolling power cuts this winter as Europe faces its worst energy crisis in decades. 

The reactor, which cost operator Teollisuuden Voima Oyj roughly $6.4 billion and was once set to be the world’s biggest, has been in test stage since starting in March. 

Tests at the full 1,600-megawatt level will take place in early October, TVO said in a statement. Regular production will be reached in December. 

Europe’s Newest Reactor to Save a Part of Strained Energy Market

Output from the plant stood at about 960 megawatts on Wednesday morning. 

©2022 Bloomberg L.P.

‘Star Trek’ Star DeForest Kelley Joining Nichelle Nichols in Space

Ashleigh Durden

The late DeForest Kelley, who played Dr. Leonard “Bones” McCoy on “Star Trek,” will be joining his costar Nichelle Nichols‘ ashes in a unique way … as they both go to deep space.

A sample of Jackson’s DNA will be onboard United Launch Alliance’s aptly-named “Vulcan” rocket with Nichelle’s remains as it launches into space later this year … creating a once-in-a-lifetime reunion mission.

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The announcement comes on the 56th anniversary of the OG TV series’ first episode … also known as “Star Trek Day.” Charles M. Chafer, co-founder of Celestis, says, “No mission to deep space would be complete without a ship’s doctor.”

DeForest, who’s best known for his role as the wisecracking Dr. Bones, died of stomach cancer back in 1999, but a close family friend and caregiver named Kris Smith tells TMZ she had kept a lock of his hair all this time. She donated it to Celestis so her friend could take one final “journey into interstellar space.”

She adds, “I think De would have loved to ‘go hopping galaxies’ again with cast and crew mates.”

Getty

‘Star Trek’ Icon Nichelle Nichols’ Ashes Going to Deep Space on Vulcan Rocket

DeForest and Nichelle won’t be alone … as we reported, the remains of ‘ST’ creator Gene Roddenberry, along with actors James Doohan (“Scotty”) and Majel Barrett Roddenberry (“Nurse Chapel”) will all be aboard when they’re launched into an orbit around the sun.

The Celestis Enterprise Flight is set to boldly go well beyond the Earth-Moon system, traveling between 150 million and 300 million kilometers into deep space.

Over 150 different capsules will launch from the rocket during the mission … along with DNA and cremated remains and tribute messages written by fans will be sent off, too.

Korean nuclear fusion reactor achieves 100 million°C for 30 seconds

Deneen Broadnax19 hours ago

 

A sustained, stable experiment is the latest demonstration that nuclear fusion is moving from being a physics problem to an engineering one

Physics

7 September 2022

By Matthew Sparkes

The Korea Superconducting Tokamak Advanced Research experiment

Korea Institute of Fusion Energy

A nuclear fusion reaction has lasted for 30 seconds at temperatures in excess of 100 million°C. While the duration and temperature alone aren’t records, the simultaneous achievement of heat and stability brings us a step closer to a viable fusion reactor – as long as the technique used can be scaled up.

Most scientists agree that viable fusion power is still decades away, but the incremental advances in understanding and results keep coming. An experiment conducted in 2021 created a reaction energetic enough to be self-sustaining, conceptual designs for a commercial reactor are being drawn up, while work continues on the large ITER experimental fusion reactor in France.

Now Yong-Su Na at Seoul National University in South Korea and his colleagues have succeeded in running a reaction at the extremely high temperatures that will be required for a viable reactor, and keeping the hot, ionised state of matter that is created within the device stable for 30 seconds.

Controlling this so-called plasma is vital. If it touches the walls of the reactor, it rapidly cools, stifling the reaction and causing significant damage to the chamber that holds it. Researchers normally use various shapes of magnetic fields to contain the plasma – some use an edge transport barrier (ETB), which sculpts plasma with a sharp cut-off in pressure near to the reactor wall, a state that stops heat and plasma escaping. Others use an internal transport barrier (ITB) that creates higher pressure nearer the centre of the plasma. But both can create instability.

Na’s team used a modified ITB technique at the Korea Superconducting Tokamak Advanced Research (KSTAR) device, achieving a much lower plasma density. Their approach seems to boost temperatures at the core of the plasma and lower them at the edge, which will probably extend the lifespan of reactor components.

Dominic Power at Imperial College London says that to increase the energy produced by a reactor, you can make plasma really hot, make it really dense or increase confinement time.

“This team is finding that the density confinement is actually a bit lower than traditional operating modes, which is not necessarily a bad thing, because it’s compensated for by higher temperatures in the core,” he says. “It’s definitely exciting, but there’s a big uncertainty about how well our understanding of the physics scales to larger devices. So something like ITER is going to be much bigger than KSTAR”.

Na says that low density was key, and that “fast” or more energetic ions at the core of the plasma – so-called fast-ion-regulated enhancement (FIRE) – are integral to stability. But the team doesn’t yet fully understand the mechanisms involved.

The reaction was stopped after 30 seconds only because of limitations with hardware, and longer periods should be possible in future. KSTAR has now shut down for upgrades, with carbon components on the wall of the reactor being replaced with tungsten, which Na says will improve the reproducibility of experiments.

Lee Margetts at the University of Manchester, UK, says that the physics of fusion reactors is becoming well understood, but that there are technical hurdles to overcome before a working power plant can be built. Part of that will be developing methods to withdraw heat from the reactor and use it to generate electrical current.

“It’s not physics, it’s engineering,” he says. “If you just think about this from the point of view of a gas-fired or a coal-fired power station, if you didn’t have anything to take the heat away, then the people operating it would say ‘we have to switch it off because it gets too hot and it will melt the power station’, and that’s exactly the situation here.”

Brian Appelbe at Imperial College London agrees that the scientific challenges left in fusion research should be achievable, and that FIRE is a step forwards, but that commercialisation will be difficult.

“The magnetic confinement fusion approach has got a pretty long history of evolving to solve the next problem that it comes up against,” he says. “But the thing that makes me kind of nervous, or uncertain, is the engineering challenges of actually building an economical power plant based on this.”

Journal reference: Nature, DOI: 10.1038/s41586-022-05008-1

YOU WON'T FIND IT HERE JUST SEPARATIST WHINING

FP Comment
Opinion: The world needs a win-win Ottawa-Alberta energy deal

You can’t destroy an energy system built on hydrocarbons without having a reliable alternative in hand

Author of the article: Donna Kennedy-Glans, Special to Financial Post
Publishing date: Sep 07, 2022 

Prime Minister Justin Trudeau speaks with Minister of Environment and Climate Change Steven Guilbeault at Rideau Hall in Ottawa,. 

PHOTO BY BLAIR GABLE/REUTERS FILES

When German Chancellor Olaf Scholz came to Canada last month hoping he could rely on Canadian natural gas to help ease Europe’s dependency on Russian energy, Justin Trudeau offered him a blue-skies hydrogen development but didn’t commit on liquefied natural gas (LNG) exports. Ottawa says it won’t stand in the way if the private sector wants to build new export facilities but everyone understands the real political deal on energy in Canada.

It comes in two parts: First, Trudeau and Steven Guilbeault, his activist-turned-politician minister of environment and climate change, will continue to champion an ambitious climate agenda regardless of what’s going on in the rest of the world. And, second, Ottawa is politically afraid of Quebec and will stand by and watch rather than challenge Premier François Legault’s exercise of a veto on pipelines or future oil and gas development in Quebec.

Five years ago, there was or at least seemed to be the makings of a very different deal on energy in Canada. It went like this: Alberta steps forward on carbon reduction and mitigation and the rest of the country relents on hydrocarbon exports. Alberta did step forward but the rest of the country hasn’t lived up to its end of the bargain.

How do I know? I was there as that deal was being shaped. In the final years of the Progressive Conservative government in Alberta, people in the province understood the need to get on board with a federal climate plan. In 2013, I was named the province’s first minister responsible for electricity and renewable energy and that meant figuring out ways to phase out coal-fired electricity, put a price on carbon and invest in renewables. When the NDP was elected in 2015, Premier Rachel Notley implemented a carbon tax, accelerated the phase-out of coal-fired electricity (which required investment in electricity infrastructure, buyouts of coal plants and significant investment in renewables) and put an admittedly loose-fitting cap on oilsands emissions.

What has Ottawa done in return? Earlier this summer, Guilbeault moved the cap from the oilsands to the entire oil and gas sector, where it’s a much tighter fit. Private-sector actors in the Canadian energy sector understand the need to transition the oilsands and other hydrocarbon energy resources to lower carbon intensities. Investors, lenders, corporate employees and consumers increasingly demand decarbonization. But you can’t destroy an energy system built on hydrocarbons without having a reliable alternative in hand.

The Germans and the Brits wreaked havoc on their hydrocarbon-based energy systems for the last decade and Russia’s war in Ukraine has now awakened them to the dangers of destroying one system without having another to replace it. Even Elon Musk, founder of Tesla and champion of electric vehicles, said as much in Norway recently: fossil fuels are needed right now to keep civilization functioning until we can reach sustainability with renewable energy. That is especially true for a northern country like Canada.

Most of us would like to think we are pragmatists. But there’s no denying that partisanship and old rivalries between provinces percolate up from time to time, much like a river that goes underground only to pop up in unexpected places. Two events slated for early October — the UCP leadership race, which has the effect of replacing Alberta’s premier, and Quebec’s provincial election, which seems likely to strengthen Premier Legault’s hand — both have the potential to stir up emotions on energy.

Danielle Smith, likely Alberta’s next premier, is talking about sovereignty-association, using Quebec as her template. With hydrocarbon prices soaring, oil and gas revenues are pouring into the Alberta treasury and the now fabulously rich UCP government is using the surplus to pay down debt. A robust financial foundation for talk of sovereignty-association is inciting some of the same “turn-off-the-tap” instincts that a more progressive Conservative premier, Peter Lougheed, gave voice to 50 years ago in response to Pierre Trudeau’s confiscatory National Energy Plan.

In these extraordinary times, political actors in Ottawa seem oblivious to the sentiments being stirred up by the combination of their new edict for emissions caps on Canada’s oil and gas sector and their evident unwillingness to stand up to Quebec. Of all people, Guilbeault, the guy who scaled Toronto’s CN Tower to unfurl a gigantic Greenpeace sign accusing Canada and the U.S. of being “climate killers,” should understand how citizens can be incited into taking matters into their own hands.

Insecurity and maybe, this winter, even chaos in Europe are expected to accelerate the design of more efficient battery storage, and in the long term that innovation may end the use of hydrocarbons to power engines. But for now a world hungry for our hydrocarbons needs Canadians to work out the obvious domestic energy deal the planet needs from us.

Donna Kennedy-Glans was Alberta’s associate minister of electricity and renewable energy, 2013-14. Her new book is Teaching the Dinosaur to Dance: Moving Beyond Business as Usual.

Defeated at the Supreme Court, Ontario will dramatically raise the industrial carbon price
 
By Isaac Callan & Colin D'Mello Global News
Posted September 7, 2022 


WATCH ABOVE: After suffering a supreme court defeat, the Ford government is raising the carbon price on industrial emissions, while remaining ideologically opposed to what the government calls a tax. Global’s Queen’s Park Bureau Chief Colin D’Mello reports.


A year after losing its court battle over the federal carbon tax at Canada’s supreme court, the Ford government appears to have capitulated and is raising the price of carbon for industrial polluters under its own emissions program.

A regulatory proposal amending Ontario’s emissions performance standards (EPS) shows the price per tonne of carbon from industrial emitters will balloon from the current $40 per tonne to $65 in 2024 and spiking at $170 in 2031.

The changes will mean Ontario will apply the same carbon pricing that Premier Doug Ford spent years lamenting, ensuring that the province is in line with federal regulations while maintaining some control over carbon pricing in the industrial sector.

READ MORE: Canada reluctantly approves Ontario and New Brunswick carbon prices for big emitters

While the proposed price on carbon would only apply to industrial polluters — not the carbon tax paid by consumers on things like gasoline — experts believe the costs could affect prices of some goods in a province already struggling with the high cost of living.

“The proposed changes are so that Ontario’s rules are compliant with the federal carbon pricing rules,” said Jessica Green, a professor at the University of Toronto’s school of the environment and political science department. “Producers then have the choice of whether/how much to pass those additional costs down along the supply chain.”

Environment Minister David Piccini said that, while the government is “not supportive” of the carbon price, the province has no choice but to meet the federal government’s policy.

“We have a supreme court ruling on this,” the minister told Global News at Queen’s Park. “We have to meet the (federal government’s) benchmark, but we have a made-in-Ontario solution that works for Ontario industry.”

That solution, Piccini said, comes in the form of a “dial” which is firmly controlled by the Ford government.

Piccini indicated the province can dial down the carbon pricing pressure on certain industries that are unable to meet their targets within a given timeframe — as long as the overall federal benchmarks are being met.

The province would still be beholden to the federal government’s benchmarks on the price per tonne of carbon — $170 by 2031.

READ MORE: Canada’s carbon price hitting small businesses harder than industry: audit

The province’s system allows the Ford government to implement its own carbon pricing structure for industry, bypassing the federal government’s output-based system, which Piccini said is a “one-sized fits all.”

Piccini pointed to a decarbonization project at the Dofasco steel plant in Hamilton which the company said would reduce annual CO2 emissions by three-million tonnes per year by 2028 — a project that received a $500-million investment from the Ford government.

Piccini indicated the EPS would allow the government to apply Dofasco’s carbon emissions savings to other industries, giving them breathing room, while the province’s net carbon emissions would still be reduced.

“When you take a collaborative approach to work with industry … we can find these meaningful solutions,” Piccini said. “We found it with steel, we found it working with the cement sector, and we’re working with the nuclear sector as well to find meaningful reductions.”

“Industry is happy with the approach we’re taking.”

Industry lobbyists, however, warn that Canadian companies could lose their competitive edge as some are forced to eat the additional cost of carbon.

“In the Canadian steel industry, and it’s particularly in Ontario where there’s so much steel produced, we’re very exposed to what what happens in other jurisdictions,” Catherine Cobden, president and CEO of the Canadian Steel Producers Association, told Global News.

Cobden said the changes and price hikes were “very daunting” for Ontario steel makers.

“If we don’t get the other aspects right, in terms of support mechanisms to smooth our transition, we will face an uncompetitive playing field,” she said. “And that’s simply going to deter investments coming to our country and to our industry.”

After the supreme court ruled on a national price on pollution, Ontario’s then-Minister of Environment said he was “disappointed” with the decision but did not commit to creating a local system.

“Right now, I think we have a strong made-in-Ontario environment plan that’s going to put the necessary protections in place for the land, air and water,” Jeff Yurek said at the time.

Ontario then introduced its EPS to replace the federal government’s output-based pricing system (OBPS) for large industrial emitters at the beginning of the year; it was accepted as an alternative by the federal government in 2020.

READ MORE: Ontario ‘disappointed’ with Supreme Court ruling Canada’s carbon price constitutional

The system requires large industrial facilities to reduce emissions over time or pay a carbon price if they exceed their limit. Sectors impacted by the regulation include cement, chemicals, electrical generation and pulp facilities.

When it was introduced, the Ontario system raised the price of carbon more gradually than the federal OBPS, with both reaching $50 per tonne by 2023.

Canada implemented the Greenhouse Gas Pollution Pricing Act in 2019, setting a minimum price on carbon emissions in provinces that don’t have equivalent provincial prices.

Ontario and two other provinces took Ottawa to court, arguing the federal government did not have jurisdiction to impose the national price.

Ford and his Progressive Conservatives earmarked around $30 million for the legal fight against the federal carbon price and also waged a major public relations fight with Ottawa over it.

— with files from The Canadian Press