New York court issues liability ruling against CIBC in Cerberus lawsuit

Fri, December 2, 2022


TORONTO — CIBC says a New York court has issued a liability ruling against the Canadian bank in a lawsuit brought by Cerberus Capital Management LP.

Cerberus filed the lawsuit in November 2015.

The case related to an October 2008 transaction in which CIBC issued a limited recourse note to Cerberus specifying certain payment streams, and a subsequent transaction in 2011 in which CIBC sold a residual interest in the streams to the private equity firm.

Cerberus claimed damages of US$1.067 billion at trial earlier this year.

CIBC says it intends to appeal the liability ruling and will dispute Cerberus's measure of damages at a hearing on Dec. 19.

The bank says it expects to recognize a provision in its first-quarter 2023 results, the estimate of which will be determined by developments during the quarter.

This report by The Canadian Press was first published Dec. 2, 2022.

Companies in this story: (TSX:CM)

The Canadian Press

Canada's labour market ekes out another jobs gain in November as wages rise

Michelle Zadikian
·Senior Reporter
Fri, December 2, 2022 

Statistics Canada reported the latest jobs report for November on Friday.

 REUTERS/Jesse Winter

Canada’s labour market added 10,000 jobs in November, building slightly on its massive 108,000 gain from the month prior, Statistics Canada reported on Friday.

The unemployment rate ticked lower to 5.1 per cent.

Wage growth, a key measure the Bank of Canada is watching as it tries to avoid a wage-price spiral, remained unchanged at 5.6 per cent. It’s the sixth month in a row that wages have risen by more than five per cent.

The small gain in employment comes as economic growth in the third quarter was stronger than expected.

GDP grew 2.9 per cent on an annualized basis in the three-month period, bolstering some Bay Street economists’ conviction that the central bank will opt for a half-point interest rate hike at its meeting next week.

Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.

Unemployment rate drops slightly to 5.1% in November: Statistics Canada

Fri, December 2, 2022



OTTAWA — Statistics Canada says employment was little changed in November as the economy added a modest 10,000 jobs.

In its latest labour force survey, the federal agency says Canada’s unemployment rate fell slightly to 5.1 per cent last month.

Employment rose in several industries, including finance, insurance, real estate, rental and leasing, manufacturing and in information, culture and recreation.

It fell in construction as well as wholesale and retail trade.

Wages were up 5.6 per cent compared to a year ago, marking the sixth consecutive month of wage growth above 5 per cent.

The agency says the employment rate among core-aged women hit a record high of 81.6 per cent in November.

This report by The Canadian Press was first published Dec. 2, 2022.

The Canadian Press

Here's a quick glance at unemployment rates for November, by province


Fri, December 2, 2022

OTTAWA — Canada's national unemployment rate held steady at 5.1 per cent in November. Here are the jobless rates last month by province (numbers from the previous month in brackets):

_ Newfoundland and Labrador 10.7 per cent (10.3)

_ Prince Edward Island 6.8 per cent (5.4)

_ Nova Scotia 6.0 per cent (6.7)

_ New Brunswick 7.3 per cent (6.7)

_ Quebec 3.8 per cent (4.1)

_ Ontario 5.5 per cent (5.9)

_ Manitoba 4.4 per cent (4.6)

_ Saskatchewan 4.2 per cent (4.6)

_ Alberta 5.8 per cent (5.2)

_ British Columbia 4.4 per cent (4.2)

This report by The Canadian Press was first published Dec. 2, 2022.

The Canadian Press


Here's a quick glance at unemployment rates for November, by Canadian city

Fri, December 2, 2022

OTTAWA — The national unemployment rate held steady at 5.1 per cent in November. Statistics Canada also released seasonally adjusted, three-month moving average unemployment rates for major cities. It cautions, however, that the figures may fluctuate widely because they are based on small statistical samples. Here are the jobless rates last month by city (numbers from the previous month in brackets):

_ St. John's, N.L. 6.9 per cent (5.9)

_ Halifax 5.2 per cent (5.5)

_ Moncton, N.B. 5.2 per cent (5.6)

_ Saint John, N.B. 6.5 per cent (6.5)

_ Saguenay, Que. 5.4 per cent (4.9)

_ Quebec City 3.0 per cent (2.9)

_ Sherbrooke, Que. 2.7 per cent (2.6)

_ Trois-Rivieres, Que. 4.1 per cent (4.3)

_ Montreal 4.3 per cent (4.7)

_ Gatineau, Que. 4.6 per cent (4.3)

_ Ottawa 4.4 per cent (4.2)

_ Kingston, Ont. 5.7 per cent (5.4)

_ Belleville, Ont. 5.2 per cent (5.9)

_ Peterborough, Ont. 3.1 per cent (4.8)

_ Oshawa, Ont. 5.1 per cent (5.5)

_ Toronto 6.3 per cent (6.2)

_ Hamilton, Ont. 5.0 per cent (4.9)

_ St. Catharines-Niagara, Ont. 5.4 per cent (6.4)

_ Kitchener-Cambridge-Waterloo, Ont. 6.0 per cent (5.9)

_ Brantford, Ont. 5.2 per cent (4.8)

_ Guelph, Ont. 5.0 per cent (5.0)

_ London, Ont. 5.9 per cent (6.5)

_ Windsor, Ont. 8.6 per cent (8.5)

_ Barrie, Ont. 4.8 per cent (4.9)

_ Greater Sudbury, Ont. 4.6 per cent (4.7)

_ Thunder Bay, Ont. 4.8 per cent (5.2)

_ Winnipeg 4.8 per cent (5.0)

_ Regina 4.5 per cent (5.0)

_ Saskatoon 4.0 per cent (4.1)

_ Lethbridge, Alta. 3.5 per cent (4.1)

_ Calgary 6.0 per cent (5.3)

_ Edmonton 5.5 per cent (5.2)

_ Kelowna, B.C. 4.9 per cent (4.3)

_ Abbotsford-Mission, B.C. 4.6 per cent (5.4)

_ Vancouver 4.4 per cent (4.4)

_ Victoria 3.5 per cent (4.3)

This report by The Canadian Press was first published Dec. 2, 2022.

The Canadian Press

Rail strike to be averted: Biden to sign bill

Fri, December 2, 2022 


President Joe Biden is signing a bill Friday to avert a freight rail strike that he said could have plunged the U.S. into recession.

The White House said that Biden would sign a measure passed Thursday by the Senate and Wednesday by the House that binds rail companies and workers to a proposed settlement that was reached between the rail companies and union leaders in September.

Members in four of the 12 unions involved rejected the proposed contract, creating the risk of a strike beginning Dec. 9 that the government has likely staved off with the bill signing. A freight rail strike also would have a big potential impact on passenger rail, with Amtrak and many commuter railroads relying on tracks owned by the freight railroads.

The president has said that a strike would have sunk the U.S. economy, causing roughly 750,000 job losses as the work stoppage ruptured supply chains for basic goods, food and the chemicals needed to ensure clean drinking water.

Rising prices already have many Americans afraid of a coming downturn, but the U.S. job market has been steady. The government reported Friday that employers added 263,000 jobs in November as the unemployment rate held at 3.7%.

Though Biden is a staunch union ally, he said the rail order was necessary to prevent a strike.

The Biden administration helped broker deals between the railroads and union leaders in September, but four of the unions rejected the deals. Eight others approved five-year deals and all 12 are getting back pay for their workers for the 24% raises that are retroactive to 2020.

But the absence of a meaningful increase in paid sick leave and other quality-of-life issues was a key concern for many union members whose votes were required for the settlement. The railroads say the unions have agreed in negotiations over the decades to forgo paid sick time in favor of higher wages and strong short-term disability benefits. Union members say railroads could afford the paid leave given their profit margins.

House Democrats narrowly adopted a measure to add seven days of paid sick leave to the tentative agreement, but that change fell eight votes shy of the 60-vote threshold needed for Senate passage.

Josh Boak, The Associated Press

PERVERSITY OF CAPITALI$M

Stocks fall after gains for worker wages fan inflation fears

Fri, December 2, 2022 


NEW YORK (AP) — Worries about inflation are hitting Wall Street Friday after a report showed wages for U.S. workers are accelerating, which is good news for them but could feed into even higher inflation for the nation.

The S&P 500 was 1% lower in early trading, on track to wipe out most of what had been a healthy week of gains. The Dow Jones Industrial Average was down 281 points, or 0.8%, at 34,112, as of 9:42 a.m. Eastern time, while the Nasdaq composite was 1.2% lower.

Stocks had been on the upswing for more than a month on hopes that the worst of the nation’s high inflation may have passed already. That fed expectations for the Federal Reserve to ease up on its fusillade of big interest-rate hikes, which are supposed to undercut inflation by slowing the economy and dragging down on prices of stocks and other investments.

But Friday’s jobs report showed that wages for workers rose 5.1% last month from a year earlier. That’s an acceleration from October’s 4.9% gain and easily topped economists’ expectations for a slowdown.

Such jumps in pay are helpful to workers who are struggling to keep up with higher prices for daily necessities. But the Federal Reserve worries too-strong gains could cause inflation to become further entrenched in the economy. That’s because wages make up a big part of costs for companies in services industries, and they could end up raising their own prices further to cover higher wages for their employees.

Across the economy, employers also added 263,000 jobs last month. That was stronger hiring than economists’ forecasts for 200,000, while the unemployment rate held steady at 3.7%.

“The most important number for the Fed is probably the wage number,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

Many traders are still betting on the Fed to downshift the size of its rate hikes at its next meeting later this month, to half a percentage point from the three-quarters of a point it had shoved through for four straight meetings.

But Treasury yields still jumped immediately after the jobs report’s release. That indicates strengthened expectations for the Fed to stay resolute in hiking interest rates to get inflation under control.

The yield on the two-year Treasury jumped to 4.34% from 4.24% late Thursday. The 10-year yield, which helps set rates for mortgages and many other loans, rose to 3.56% from 3.51%.

“Another month with a strong jobs report and torrid wage gains is a reality check for where we stand in the inflation fight,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

The strong jobs data follows up on several mixed reports on the economy. The nation's manufacturing activity shrank last month for the first time in 30 months, for example, while the housing industry is struggling under the weight of much higher mortgage rates.

That's largely by design, because the Fed is raising interest rates as a way of slowing the economy just enough to starve inflation in the prices of things that households and businesses need to stay alive. But the rate hikes also risk causing a recession if they go too far. A jobs market that remains much stronger than expected could make an already dicey situation for the Fed even more complicated.

More economists are forecasting the U.S. economy to fall into a recession next year in large part because of higher interest rates.

“While the Fed won't back away from” a hike of just half a percentage point “in December, they still have no clue what they'll do in 2023,” said Allpsring's Jacobsen.

——

AP Business Writers Elaine Kurtenbach and Matt Ott contributed.

Stan Choe, The Associated Press

WAGE THEFT

A lawyer for fired Twitter staff says Elon Musk is trying to 'tap-dance' his way out of paying severance, and threatens a 'fun as hell' arbitration campaign

Pete Syme
Fri, December 2, 2022 

Elon Musk has reduced Twitter's workforce by almost 70%.

Muhammed Selim Korkutata/Getty Images

A lawyer representing laid-off Twitter staff sent a fiery letter to Elon Musk's lawyer, Alex Spiro.

Akiva Cohen claimed his clients weren't receiving the severance package they had been promised.

Cohen tweeted that he hoped Musk would do the right thing, otherwise "it'll be fun as hell."

A lawyer for fired Twitter staff has given Elon Musk a deadline of December 7 to confirm that he will pay them full severance as promised, or face an arbitration campaign to settle the dispute.

Akiva Cohen — a partner at law firm Kamerman, Uncyk, Soniker & Klein — tweeted a copy of his letter which addresses Musk as the "Chief Twit."

He accused the world's richest person of "attempting to tap-dance your way out of Twitter's binding obligations to its employees."

"If you don't unequivocally confirm by Wednesday, December 7 that you intend to provide our clients with the full severance Twitter promised them, we will commence an arbitration campaign on their behalf," Cohen said.

Since Musk took over the company, Twitter's workforce has fallen from 7,500 to 2,300, per Insider's Kali Hays.

That means almost 70% of staff were laid-off, mostly during the first round when Musk halved employee numbers, and his ultimatum to commit to working "extremely hardcore" or be laid-off with three months severance.

The cuts resulted in the closure of Twitter's office responsible for complying with European misinformation laws, and just one employee left on the Asia child safety team.

One executive has also been reinstated after she was dismissed for not responding to the "hardcore" ultimatum.

Musk now stands accused by some former Twitter staff of failing to provide the severance package they were promised, as alleged in a previous lawsuit.

Cohen said that his clients weren't receiving their full benefits, like 401k deductions.

His fiery letter says: "To be clear, Elon, you will lose, and you know it."

He adds that even if Musk did win, it would be "Pyrrhic" because "Twitter will pay far more in attorneys' fees and arbitration costs than it could possibly 'save' in severance due our clients."

In a tweet, Cohen added: "You can only violate people's legal rights and your own word so far before they lawyer up and come after you."

"I really do hope Musk changes his mind and does the right thing — the employees deserve that. But it'll be fun as hell if he doesn't."

The letter was also addressed to Alex Spiro, the acting general counsel at Twitter, who previously defended Musk after he called a British diver "pedo guy."

Cohen told Musk he still had time to avoid a legal case, "or you can double down on breaking your word and screwing over your ex-employees as they head into the holidays."

Spiro and Twitter did not immediately respond to requests for comment.

Twitter says it's reinstated an exec who says she was effectively dismissed after she didn't respond to Elon Musk's 'hardcore' ultimatum

Grace Dean
Fri, December 2, 2022

Twitter exec Sinéad McSweeney said she was effectively dismissed for failing to respond to Elon Musk's "hardcore" ultimatum.

The company told an Irish court it has reinstated McSweeney as its global VP for public policy.

McSweeney said she didn't respond to the email due to confusion around her contract, The Irish Times reported.

Twitter says it has reinstated an executive who says she was effectively dismissed for failing to respond to Elon Musk's "hardcore" ultimatum.

The social-media giant told the Irish High Court on Wednesday that it had reinstated Sinéad McSweeney as its global vice president for public policy, a number of Irish publications including The Irish Times reported. She has worked at the company since 2012, according to her LinkedIn.

McSweeney had previously told the court that the company had told her she had submitted a "voluntary resignation" after failing to respond to a company-wide email by new owner Elon Musk, even though she didn't intend to resign.

The email, sent late on November 15, told workers that they would need to be "extremely hardcore" and work "long hours at high intensity" to stay on at the company and asked them to respond to Google form committing to Musk's vision for "Twitter 2.0." If they didn't respond by the end of the business day on November 17, they would be laid off and given three months severance, Twitter said.

McSweeney said she didn't respond because of confusion related to her contract of employment, The Irish Times reported.

The day after the ultimatum's deadline, Twitter emailed McSweeney on her personal account, acknowledging her "voluntary resignation" and saying it accepted her severance package, she said. The company also locked her out of its systems, email, and Dublin office.

After her solicitors sent a letter to the company, Twitter's lawyers acknowledged that she hadn't intended to resign and said the company would restore her access to its systems, but failed to do so, McSweeney had claimed.

A High Court judge granted McSweeney a temporary injunction last Friday to stop Twitter from terminating her contract based on the ultimatum email.

Twitter's lawyers told the court on Wednesday that the company would restore McSweeney's access to its IT systems and Dublin office, per The Irish Times.

Lawyers for both Twitter and McSweeney didn't immediately respond to Insider's request for comment on whether McSweeney had regained access.

Insider previously reported that fewer people committed to Twitter 2.0 than Musk and his team had expected, leading to the company's vice-presidents and Musk himself calling some "critical" workers in a desperate bid to persuade them to stay on. Since taking ownership of Twitter in late October, around three-quarters of the company's workforce has been laid off, fired, or has resigned.

FINED NO MANSLAUGHTER CHARGE
Top exec at pharmacy in deadly meningitis outbreak sentenced

Fri, December 2, 2022 

BOSTON (AP) — A former co-owner of a Massachusetts compounding pharmacy at the center of a nationwide fungal meningitis outbreak that resulted in more than 100 patient deaths has been sentenced to a year in prison for conspiring to defraud the federal government.

Gregory Conigliaro, 57, as the vice president and general manager of the New England Compounding Center, was the company's primary point of contact with federal and state regulators, federal prosecutors said in a statement after sentencing Thursday.

He and other company officials lied to the federal Food and Drug Administration and the Massachusetts Board of Registration in Pharmacy by saying the business was dispensing medications for patient-specific prescriptions.

The truth, according to prosecutors, is that the company was evading regulatory oversight through fraud and misrepresentation from 2002 until 2012, routinely shipping drugs to customers without patient-specific prescriptions and even creating fraudulent prescriptions to fool regulators.

About 800 patients in 20 states were sickened with fungal meningitis or other infections and about 100 died in 2012 after receiving injections of medical steroids manufactured by the now-closed New England Compounding Center in Framingham, Massachusetts, according to federal officials. The drugs were mostly intended to treat back pain.

“Mr. Conigliaro and his co-conspirators repeatedly made the choice to put their greed over patient safety,” U.S. Attorney Rachael Rollins said in a statement. “In turn, nearly 800 patients suffered terribly and over 100 died. Today’s sentence sends a clear message to health care executives — if you lie to regulators, the outcomes can be deadly and we will hold you accountable.”

Conigliaro was among 14 company officials indicted in the case. The indictment did not charge Conigliaro with having any role in the manufacturing process. He was convicted by a jury in U.S. District Court in Boston in December 2018 of conspiracy to defraud the United States.

Barry Cadden, another co-owner who was also the head pharmacist, was sentenced in July 2021 to 14 1/2 years in prison, ordered to forfeit $1.4 million and pay restitution of $82 million. Former supervisory pharmacist Glenn Chin was sentenced in July 2021 to 10 1/2 years in prison and ordered to pay $82 million in restitution.

Both were convicted of fraud, racketeering and other crimes but acquitted of second-degree murder under under the federal racketeering law.

The Associated Press

DECRIMINALIZE DRUGS

Rhode Island latest state to allow recreational pot sales


Thu, December 1, 2022 


PROVIDENCE, R.I. (AP) — Customers started lining up to buy recreational marijuana in Rhode Island on Thursday, a little more than six months after Gov. Dan McKee signed legislation permitting such sales to people 21 and older.

Five stores are currently allowed to sell recreational cannabis products, but the state could eventually have as many as 33 stores, according to the law. The stores authorized to open by the state Office of Cannabis Regulation so far are in Central Falls, Providence, Pawtucket, Portsmouth and Warwick. All five had already been selling medical marijuana.

“This milestone is the result of a carefully executed process to ensure that our state’s entry into this emerging market was done in a safe, controlled and equitable manner,” the Democratic governor said in a statement last week.

Mother Earth Wellness in Pawtucket normally opens at 8 a.m. but people were already waiting outside when it opened at 5 a.m. on Thursday, co-owner Joe Pakuris said. The store made its first recreational sale at 5:18 a.m.

The store had welcomed about 300 customers by mid-morning, about 80% of whom were recreational buyers, he said.

“We've had a very successful day," he said. “I think it has been a smooth transition and the state has done an excellent job of rolling out this program. Everything's great."

The law imposes a 10% state cannabis excise tax in addition to the 7% state sales tax and 3% local tax for the city or town in which the sale takes place. It's expected to generate about $15 million in tax revenues in the first full fiscal year of sales.

The law prohibits smoking or vaping cannabis products in any public place where smoking or vaping of tobacco products is prohibited, and anywhere where there is potential harm to children. People are also not allowed to operate a vehicle while under the influence of cannabis.

The legislation also provides for the expungement of any prior conviction for possession of cannabis that will be decriminalized.

About 20 states nationwide had approved recreational marijuana sales, including neighboring Massachusetts where it's been legal for about four years. In Connecticut, recreational pot has been legalized but sales are not expected to start until next year.

Not everyone is happy. State law enforcement agencies have expressed concern about the potential for more impaired motorists on the roads.

The Associated Press

CRIMINAL CAPITALI$M

US House panel says lax screening helped facilitate PPP fraud

Thu, December 1, 2022 


WASHINGTON (AP) — Financial technology firms abdicated their responsibility to screen out fraud in applications for a federal program designed to help small businesses stay open and keep workers employed during the pandemic, a report by a House investigations panel said Thursday.

The House Select Subcommittee on the Coronavirus Crisis launched its investigation of the firms in May 2021 after public reports that the firms were linked to disproportionate numbers of fraudulent loans issued under the Paycheck Protection Program.

Former President Donald Trump rolled out the Paycheck Protection Program to help small businesses stay open and keep their workers employed. President Joe Biden maintained the program and directed money to more low-income and minority-owned companies. All told, $800 billion was spent on the program.

The financial technology firms reviewed PPP applications for lenders, which would ultimately distribute PPP money to businesses.

The report said two start-ups, Blueacorn PPP and Womply Inc. — which reviewed one in every three funded PPP loans in 2021 — were connected to significant percentages of PPP loan applications with indicators of fraud.

It said the firms used questionable screening procedures and business practices in reviewing the loans, leading to “the needless loss of taxpayer dollars,” the report said. The firms “took billions in fees from taxpayers while becoming easy targets for those who sought to defraud the PPP.”

Neither firm responded immediately to a request for comment.

The report said Womply's fraud prevention practices were so lax that lenders describe its systems as “put together with duct tape and gum.” It said Womply's software became a preferred product for criminal enterprises seeking to defraud the government of PPP loans. The firm also received over $5 million in PPP loans for itself, which the Small Business Administration later determined it was ineligible to receive.

Womply said in a statement sent to the committee in January that the firm's role in the screening process was limited. “Womply did not approve PPP loan applications, issue PPP loans, or otherwise serve as a lender in the PPP. Womply helped connect borrowers with PPP lenders, which were responsible for reviewing, approving, submitting, funding, and servicing the PPP applications and loans,” the company's lawyers wrote.

Womply referred 128,813 PPP applicants to lenders in 2020, and 2,584,420 applicants to lenders in 2021.

“We must learn from this inexcusable misconduct to erect guardrails that will help ensure that federal programs — including emergency assistance programs in future crises — are administered more effectively, efficiently, and equitably while keeping waste, fraud, and abuse to an absolute minimum,” said Rep. Jim Clyburn, D-S.C., who chairs the coronavirus crisis subcommittee.

Clyburn said the committee’s findings were sent to the Justice Department and the Small Business Administration.

In March, the Government Accountability Office reported that while agencies were able to distribute COVID-19 relief funds quickly, “the tradeoff was that they did not have systems in place to prevent and identify payment errors and fraud” due in part to “financial management weaknesses.”

Billions have been fraudulently claimed through various pandemic relief programs — including Paycheck Protection Program loans, unemployment insurance and others that were rolled out in the midst of the worldwide pandemic that shut down global economies for months.

The U.S. Secret Service in August said it has recovered $286 million in fraudulently obtained pandemic loans and returned the money to the Small Business Administration.

Fatima Hussein, The Associated Press

FUEL VS FOOD

Biden Proposes Overhaul of US Biofuel Law to Boost EV Makers Like Tesla
  
Jennifer A. Dlouhy and Kim Chipman
Thu, December 1, 2022 


(Bloomberg) -- The Biden administration is opening the door to a sweeping rewrite of the 17-year-old US biofuel mandate, including a plan to encourage use of renewable natural gas to power electric vehicles, which could benefit Tesla Inc. and other automakers.

An Environmental Protection Agency proposal released Thursday invites public feedback on an array of changes to the Renewable Fuel Standard, initially designed in 2005 to push more ethanol, biodiesel and other plant-based alternatives into vehicles. The plan may spur an overhaul that could shift the program from one narrowly focused on gasoline, diesel and other liquid fuels to an initiative broadly aimed at decarbonizing transportation.

The EPA will also seek public feedback on the best way to promote next-generation low-carbon biofuels, while protecting American oil refining assets after a wave of pandemic-spurred closures and the Russian invasion of Ukraine underscored the strategic importance of these facilities.

The measure “will set the stage for further growth and development of low-carbon biofuels in the coming years,” the EPA says in its proposal. During the transition, “maintaining stable fuel supplies and refining assets will continue to be important to achieving our nation’s energy and economic goals as well as providing consistent investments in a skilled and growing workforce.”

Biofuel Boost

The agency is proposing to raise the amount of biofuel that must be mixed into gasoline and diesel over the next three years to as much as 22.68 billion gallons in 2025, up from this year’s 20.87 billion gallons. Under the measure, conventional ethanol may be used to fulfill as much as 15.25 billion gallons. But that exceeds what oil refiners call the “blend wall,” or the 10% ceiling on the amount that can be blended into the most commonly available E10 gasoline.

The EPA is asking the public for feedback on whether it should actually set the conventional renewable fuel requirement below the blend wall. It also wants public comment on how the quota plan will affect the “continued viability of domestic oil refining assets,” including so-called merchant refiners with limited blending facilities that can’t easily generate compliance credits.

Administration officials took pains to emphasize their desire to protect oil refining capacity while fostering alternative fuels. EPA Administrator Michael S. Regan said the agency was “focused on strengthening the economics of our critical energy infrastructure” even as it seeks to diversify the nation’s fuel mix. And Energy Secretary Jennifer Granholm cast the proposal as a way to “drive forward fuel innovations while balancing the need to maintain and strengthen critical domestic refining capacity, and support the union workers who operate these facilities.”

Nevertheless, the measure drew criticism from some oil refining supporters as well as biodiesel advocates.

Soybean and corn futures fell in Chicago, with soy oil sliding as much as 6.3%, the biggest decline since early July.

Crop trading giants Archer-Daniels-Midland Co. and Bunge Ltd., both of which have expanded their presence in the market for climate-friendly diesel, saw steep declines on Thursday. Bunge shares dropped as much as 7.7%, their biggest intraday pullback since March 29, while ADM fell as much as 6.4%, the most since September.

Shares of ethanol producers such as Green Plains Inc. swung between gains and losses.

The proposed EPA volumes for crop-based fuels came in below market expectations, StoneX risk management consultant Matt Campbell said. “The market is not taking the news well,” particularly for soybean oil, since “requirements were well short of trade estimates,” Campbell added.

The proposal was also a blow to oil refining champions, who said it would increase the industry’s compliance costs, undermining the economics of some operations. Senator Chris Coons, a Democrat from Delaware, called the proposed quotas “unachievable” and said they foster uncertainty for skilled union workers.

“The cost of complying with the Renewable Fuel Standard is at a record high because the volumes don’t align with what our country can actually produce and consume,” Coons added in an emailed statement.

Refiners prove they have fulfilled annual blending quotas by relinquishing tradeable credits known as “renewable identification numbers” or RINs, which are generated with each gallon of biofuel.

Under a court settlement, the EPA is obligated to finalize the biofuel quotas by June 14 next year. A senior administration official said public feedback could determine the shape of the final rule, prompting the EPA to revise initially proposed blending requirements or even revisit past policy decisions tied to RIN holding thresholds, disclosure requirements and market liquidity.

eRIN Credit

The EPA would also create an eRIN credit awarded when electricity from certain renewable sources -- such as natural gas harvested from landfills and at farms -- is used as fuel to power EVs. Under the proposal, automakers alone could generate the credit, though its value could be shared with other parties, such as the generators of biogas-powered electricity.

As designed, the eRIN plan would add another incentive for automakers such as Ford Motor Co. and General Motors Co. to produce electric vehicles, building on tax support in the just-enacted Inflation Reduction Act and other air pollution policies.

The plan is likely to set off furious lobbying as charging station operators, biogas producers and utilities vie for a piece of the eRIN credit. Even before the EPA released its proposal, the eRIN concept was opposed by some environmentalists and congressional Democrats who say it would subsidize large industrial livestock operations.

Biodiesel producers also took aim at the proposed quotas, which would offer only a modest boost over the current 2.76-billion-gallon requirement, despite a predicted surge in demand and new production capacity next year. The plan “significantly undercounts existing biomass-based diesel production and fails to provide growth for investments the industry has already made in additional capacity, including for sustainable aviation fuel,” said Kurt Kovarik, vice president of federal affairs at the Clean Fuels trade group.

(Updates with further details on EPA proposal starting in second paragraph and prices.)

Most Read from Bloomberg Businessweek

FIGHTING MONOPOLY CAPITALI$M

Farm, consumer groups urge U.S. to block Kroger's planned $25 billion buy of Albertsons

Thu, December 1, 2022 

Traders work as screens display the trading information for Kroger and Albertsons on the floor of the NYSE in New York

WASHINGTON (Reuters) -Advocacy groups, including the Open Markets Institute and National Farmers Union, on Thursday asked U.S. antitrust enforcers to stop Kroger Co's planned $25 billion purchase of rival grocery giant Albertsons Companies Inc.

In a letter to Federal Trade Commission Chair Lina Khan, the groups argued that the deal would raise prices in some parts of the United States and hurt some grocery store and warehouse workers.

"As organizations representing farmers, workers, consumers, and advocates for fair food systems, we urge the Federal Trade Commission to block Kroger's acquisition of Albertsons," the letter said.

Kroger said in a statement that it did not expect the deal, if it goes forward, to lead to any store closures, which would hurt workers.

"With a broader network and even more customers to serve, we believe the merger will benefit our suppliers, including farmers, as it will allow for a more efficient distribution chain, provide opportunities to grow sales together and reduce waste," the company said.

Kroger Chief Executive Rodney McMullen argued this week in a congressional hearing that even after the deal, his company would remain smaller than Walmart.

The FTC declined comment.

The groups, which include Food and Water Watch, argued that the biggest food companies pay fees to Kroger and Albertsons to ensure shelf space for their products, leaving little room for new or community-based suppliers.

"Combining Kroger and Albertsons will also create a new mega-grocery buyer with exceptional buyer power to squeeze its suppliers, shrinking farmers' and workers' share of the food dollar," the letter added.

The deal has faced skepticism from lawmakers who have expressed concern that the tie-up could raise already-high food prices. It also comes as the Biden administration takes a more aggressive approach to antitrust enforcement.

The groups also said that workers, including those at the stores, could lose jobs or bargaining clout if the deal goes forward. "Many Kroger and Albertsons store workers already struggle to meet their basic needs," they said, noting that a 2021 study of Kroger workers found that 75% had trouble buying groceries.

(Reporting by Diane Bartz; editing by Diane Craft and Deepa Babington)