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Enbridge CEO hopes for more carbon capture support in upcoming federal budget

The Canadian Press

The CEO of energy infrastructure giant Enbridge Inc. says he hopes the federal government will unveil more incentives for carbon capture and storage in the upcoming federal budget.

Greg Ebel says the U.S. is currently a more attractive place for companies seeking to invest in carbon capture technology.

He says the Inflation Reduction Act in the U.S. offers incentives that reduce the capital costs as well as on ongoing operating costs for carbon capture.

Canada's energy industry has identified carbon capture and storage as key to its plan to reduce greenhouse gas emissions.

Companies have proposed approximately 25 different projects aiming to capture carbon from Alberta's oil and gas sector.

Among these is Enbridge's Open Access Wabamun Carbon Hub to be located northwest of Edmonton.

Enbridge earmarks $3.3 billion for Gulf Coast storage plant, other projects

Amanda Stephenson, The Canadian Press

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A U.S. Gulf Coast gas storage facility and a stake in a company developing fuel from waste food are among a string of new investments announced by Canadian energy giant Enbridge Inc. on Wednesday.

At its annual investor day event, the Calgary-based company announced $3.3 billion in new investments it says will help Enbridge grow to meet increasing global demand for energy.

The new investments include a deal to acquire Tres Palacios Holdings LLC from Brookfield Infrastructure Partners and Crestwood Equity Partners LP for US$335 million. Tres Palacios is a natural gas storage facility in the U.S. Gulf Coast region, which has been a focus for Enbridge in the last several years.

The deal is expected to close in the second quarter of 2023.

Enbridge will also acquire a 10 per cent stake in Divert Inc., a food waste management company expanding into renewable natural gas, for US$80 million.

That agreement includes further investment opportunities to develop RNG projects across the U.S., Enbridge said, providing potentially more than $1 billion in new capital growth. 

And the company said it will go ahead with plans to build the Enbridge Houston Oil Terminal for an initial capital cost of $240 million. The facility will focus on heavy crude and will have access to the Houston region's refining complex and export opportunities through the Seaway docks at Freeport and Texas City.

On Wednesday, Enbridge reaffirmed its 2023 earnings guidance of $15.9-$16.5 billion, and also said it expects its earnings per share to grow at a compounded annual rate of between four and six per cent through 2025.

In his remarks to investors, CEO Greg Ebel said 2022 was an "inflection" point for Canada's energy industry as years of underinvestment coupled with Russia's invasion of Ukraine to drive unprecedented commodity price spikes.

He said Enbridge is well positioned to help "rebalance" the global energy system.

"The bottom line is we see plenty of executable growth across our business units and the existing asset base," Ebel said.

"We are excited about our growth opportunities in the short and medium term."

Ebel said as the energy transition takes hold, renewable energy will continue to grow and Enbridge continues to explore opportunities in new, low-carbon forms of energy such as renewable natural gas.

But he said natural gas and oil will remain critical parts of the energy mix for the foreseeable future. Natural gas, in particular, will be needed as a reliable backup given the intermittent nature of wind and solar power, he said.

Enbridge also announced on Wednesday $2.4 billion of new gas transmission modernization and utility spending to its secured capital program.

The company also said it will build a 14-kilometre natural gas pipeline in Ontario to help ArcelorMittal Dofasco's plan to change the way it makes steel.

Enbridge's medium-term growth expectations "appear reasonable," said RBC Dominion Securities analyst Robert Kwan in a note, adding the investor day updates Wednesday were consistent with the market's expectations.

This report by The Canadian Press was first published March 1, 2023.

Oil and gas investment in Canada to 

hit $40 billion in 2023, industry group 

says

The Canadian Pres

The Canadian Association of Petroleum Producers says it expects investment in oil and natural gas production in this country to hit $40 billion this year. 

The industry group says that's 11 per cent higher than last year and also surpasses pre-COVID-19 pandemic levels.

Upstream oil and natural gas investment in Canada reached a low of $22 billion in 2020, as prices collapsed due to the pandemic.

CAPP says conventional oil and natural gas capital investment for 2023 is forecast at $28.5 billion, while oilsands investment is expected to reach $11.5 billion.

CAPP says much of this year's increased spending will go towards maintenance and incremental growth projects, as well as managing inflationary pressures.

The lobby group says spending is also expected to go towards emission reduction technologies such as advancing the development of carbon capture utilization and storage (CCUS).

This report by The Canadian Press was first published March 1, 2023.

Enbridge eyes US$1B of projects to turn food waste into gas

Kevin Orland, Bloomberg News

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Enbridge Inc. is committing as much as US$1 billion to building plants that turn discarded food into renewable natural gas as part of a pledge to reduce its emissions and provide customers with greener products.

North America’s largest pipeline company also is investing $80 million in Divert Inc., the company that created the waste-to-gas technology that will be used in the plants, according to a release on Wednesday. Current investor Ara Partners is leading a group that’s investing an additional $20 million.

Enbridge would generate a return from the facilities and the gas they’d produce while also making progress on a goal of reducing its emissions intensity 35 per cent by 2030. The partnership with Divert could offset 400,000 metric tons of carbon dioxide emissions a year, according to the statement.

“It’s a perfect drop-in fuel to our existing infrastructure that offers that lower, or negative carbon-intensity fuel for our customers and for us,” Caitlin Tessin, vice president of strategy and market innovation at Enbridge, said in an interview.

Divert is looking to build facilities within 100 miles of 80% of the US population in the next eight years, and plants also will be considered for Canada.

Recycling gold? Oxford researcher says it's something to consider

Iva Poshnjari, BNN Bloomberg

Investors often seek safety in gold, especially during inflationary times, but one expert says instead of mining it, reusing what is already above ground should be considered.
 
A circular gold economy would involve the transition out of gold mining to instead, recycling the commodity that is already available above ground, Oxford researcher Stephen Lezak, who specializes in commodities and infrastructure, told BNN Bloomberg in a TV interview on Tuesday. 
 
“When we say a circular gold economy, we’re talking about a world in which gold is still consumed. People will still buy it for jewelry, for investment, it will still wind up in technology and medicine, but the vast majority of it will come from recycled sources,” he said.
 
Lezak argued that the world already has thousand of years of above ground gold stocks to draw on, and these stocks already supply about 25 per cent of the gold that’s consumed every year. 
 
“Gold functions as an investment because of its scarcity, and so making it more scarce is in some ways taking gold and making it into renaissance art, or a Stradivarius violin. It doesn’t become any less valuable — in fact the opposite is true." 
 
 In what he refers to as a ‘responsible drawdown’ of gold mining, a slow but steady transition out of mined gold would not bring a shock to the markets. Instead, investors would still retain the same amount of capital they have currently invested in gold, but the physical representation would be smaller, he added. 
 
The price of gold rose to US$1,847.60 as of March 1. Over the past two years, gold prices have been volatile as tight monetary policy measures have made the commodity costlier to hold. 
 
“We would be talking about redirecting and essentially being smarter about this resource that is so costly to extract,” he said. 

Check out the full video to learn more.

Industry minister faces anger no matter what he decides on Rogers-Shaw: Analyst

Holly McKenzie-Sutter, BNN Bloomberg 

Canada's industry minister has no good options as he considers whether to approver Rogers Communications Inc.’s $20-billion takeover of Shaw Communications Inc., according to one industry expert who predicts the minister could take months to come to a final decision.

The companies have set March 31 as the closing date for the drawn-out telecommunications sale, which has been extended multiple times as the parties cleared most major legal hurdles. The deal still needs approval from Industry Minister François-Philippe Champagne.

Despite the looming deadline, telecom consultant Dvai Ghose said he expects Champagne could take another three to four months to decide whether to approve the sale, as he faces anger from corporate Canada if he rejects it, or from Canadian consumers if he approves it.

“You can perhaps understand why he's procrastinating,” said Ghose, who is also CEO of Ghose Investment Corp.

“If he rejects the deal, then Bay Street will go crazy and say, ‘So you're rejecting all (mergers and acquisitions)? Why was this rejected?’ And there's an argument there. On the other hand, if he accepts the deal, then every consumer group, the NDP, many Conservatives and even members of the Liberal parliamentary group are generally concerned about the deal.”

Canada’s competition czar opposed the sale before the Competition Tribunal, arguing it would lead to worse, more expensive service for Canadians and lessen competition—concerns that have been echoed by other critics.

The Tribunal rejected those arguments and sided with the companies, who had argued that the sale would not lessen competition because they planned to sell Shaw’s Freedom Mobile to Quebecor for $2.85 billion. The Federal Court of Appeal later dismissed an application from the Competition Bureau to overturn the Tribunal decision.

Ghose said Champagne’s decision-making is further complicated by the Quebecor aspect of the deal, and uncertainty about whether conditions aimed at maintaining competition in the sector will play out as intended.

Deciding quickly could also appear as if Champagne is “being bullied” by the companies, Ghose said, pointing to another reason the minister may take his time.

“If I were him, I'd delay as well, and that's exactly what I expect,” he said

Review your rights before signing paperwork during a layoff: Employment lawyer

While salary negotiations are a normal part of the hiring process, experts say it's a stone often left unturned by young candidates unsure of how to ask for more money from an employer. THE CANADIAN PRESS/AP-Alberto Pezzali

You've just made it into the office, when your boss brings you into a meeting room, where you find someone from human resources about to deliver you bad news: your company is carrying out layoffs and you're on the list.

Your mind is swarming with thoughts - How will you pay the bills? When will you find your next job? What happens to all those vacation days you haven't used up? - when you're handed a letter outlining how much severance pay and other benefits your company is prepared to give you.

Should you sign the paperwork immediately? Not necessarily, say lawyers who have been approached in recent months by a wave of laid off employees eager to explore their rights and ensure they're getting the most they can from their former employers.

“The reason why you never want to sign right away is because that is your final kick at the can,” said Sunira Chaudhri, a partner at Workly Law in Toronto.

“Even if you have a legitimate claim to anything else from your employer, including vacation time or a bonus or the return of expenses, if you sign a release prior to sorting out all of those details, you cannot go back to your lawyer to seek any additional payments.”

Chaudhri urged people who lose their jobs to review their employer's obligations and compare them with what the company is offering before signing any paperwork.

“The moment you sign a release, your rights are gone,” she warned.

What workers are entitled to is often spelled out in a mix of federal and provincial laws, employment and collective agreements staff sign when hired or during union bargaining and those termination letters.

Unionized employees must turn to their collective agreement, which should outline what they are entitled to, said Lior Samfiru, a partner at Samfiru Tumarkin LLP in Toronto.

“There's really not much to negotiate,” he said. “The collective agreement says you get X, employers pays X and that's it.”

Figuring out what you're entitled to can be more complex for non-unionized workers, but Samfiru said it's worth looking into.

In more than 90 per cent of the cases his firm has handled where someone was let go, they've been owed more than what the company offered.

The first place non-unionized employees should look for information about their entitlements is their province's Employment Standards Act, which outlines the minimum rights employers have to provide during a layoff.

But almost every employee has greater entitlements than those minimums under common law, Samfiru said.

“The longer you work, the older you are and the more senior position you have, the more entitlements you have under common law,” he said.

And it's not just additional weeks or months of salary that companies may be on the hook for.

Benefits, bonuses, stock options and commissions may also have to be handed over to workers for a period of time beyond their last day, Samfiru said.

“Ask yourself, would I have received this if I continued working for the 12-month period? And if the answer is yes, I would have, then it has to be included as part of your severance.”

Another issue that often comes up during layoffs is non-compete clauses, which prevent workers from going to work for rivals during a set period of time following their termination.

Samfiru and Chaudhri agreed such clauses are unenforceable for all workers aside from those in the C-Suite, the highest echelons of a company.

But Samfiru warned some companies will try to enforce the clause anyway.

“If they're going to try to enforce it, they're going to sue you,” he said. “You might eventually win that lawsuit, but it's still going to be a very miserable experience, and it's going to cost you a lot of money, so it's not good advice to tell someone to just ignore the non-compete.”

When trying to figure out what clauses to abide by or what you can fight your company for, Samfiru and Chaudhri recommend laid off workers seek advice from a lawyer.

However, Chaudhri added it's important to consider the value and costs before taking action.

Some people will find legal expenses will outweigh any extra cash or perks they get from an employer. Others will learn their odds of making a successful argument aren't high.

Laid off workers should ask lawyers about both scenarios before taking action and prepare themselves for an outcome they might be disappointed in.

“I can't say that it's ever a slam dunk,” Chaudhri said. “There's always a risk.”

This report by The Canadian Press was first published March 9, 2023.

More than half of Canadians say current economic conditions have impacted retirement plans: Survey

Daniel Johnson, BNN Bloomberg

More than half of Canadians said their plans for retirement have been impacted by the current economic backdrop, according to the Scotia Global Asset Management Investor Sentiment survey.

The survey from Scotiabank, released on Thursday, found 55 per cent of respondents said their retirement plans were “impacted by current economic conditions.” 

“These results indicate that investors have current concerns about meeting their retirement goals; however, regular meetings with financial advisors and having a written financial plan diminish those concerns,” Neal Kerr, the head of Scotia Global Asset Management, said in a press release. 

The survey also said 59 per cent of respondents had negative feelings regarding their investments, which marked a 33 per cent increase from a previous survey conducted in the fall of 2021.

The findings aligned with a recent Scotiabank poll, which found that Canadians are worrying more about their personal finances when compared to the previous year.

The Investor Sentiment survey also found that 86 per cent of respondents who met with a financial adviser in the past six months had higher levels of confidence in funding their retirement. 

Indications of confidence increased to 95 per cent among respondents who combined meeting a financial advisor with having a financial plan. 

But, only 26 per cent of Canadians who responded to the survey said they had a written plan. 

METHODOLOGY:

The Scotia Global Asset Management Investor Sentiment survey was conducted by Environics Research from January 4-10, 2023. The online survey included 1,022 Canadians, 25 years of age or older with household investable assets of $25,000 or more and who participate in investments decisions for their household. The data was weighted by age, gender and region and household investable assets to reflect the population.

Canadians seeking more credit amid financial 

pressures: Report

Holly McKenzie-Sutter, BNN Bloomberg

Canadians are taking on more credit in response to financial pressures and uncertain economic conditions, a new report has found, with recent signs that people are increasingly struggling to make timely payments.

TransUnion’s Q4 2022 Credit Industry Insights Report found the health of Canada’s credit market has remained at pre-pandemic levels—though “delinquency,” or late payments “increased steadily over the last three quarters.”

“We are observing increased credit usage, as some consumers look to credit as a means to help stave off financial pressures,” Matt Fabian, director of financial services research and consulting at TransUnion in Canada, said in a new release.

“Lenders are beginning to increase their provision for credit losses, but they’re not stopping their growth trajectory since delinquency levels are still below what they were prior to 2020. Canada is still in a good environment from a performance perspective, but lenders would do well to monitor trends closely.”

CREDIT PARTICIPATION RISES NATIONWIDE

The report assessed depersonalized and aggregated credit data from more than 29 million Canadian credit consumers. TransUnion’s report maps credit market health with its Credit Industry Indicator (CII), based on demand, supply, consumer behaviour and performance. The report said Canada’s CII rose four points year-over-year in December 2022 to 105, staying in the pre-pandemic range.

Much of the increase was driven by high credit participation and larger consumer balances, the report said.

Credit participation rose in all provinces and Ontario saw the highest increase of credit-active consumers at 3.2 per cent, as borrowers looked for “a range of credit products” to cope with financial pressures.

HIGHER INTEREST RATES AND “PAYMENT SHOCKS”

The increase in the report indicator was offset by declines in retail spending and increases in delinquency. After years of healthy credit performance during the pandemic, the report said people are now facing “payment shocks” amid the high inflation, high interest rate economic environment that has driven up monthly payment amounts.

Consumer-level “serious delinquency,” defined in the report as payments 90 days or more past due, increased 11 per cent year-over-year in the last quarter of 2022, rising to 1.51 per cent. Delinquency was increasing over the last three quarters, with most of the increase seen in recent months with unsecured credit products.

The report noted “overall delinquency levels” were below pre-pandemic levels, and suggested credit lenders should look for early warning signals and work with consumers to “prepare less costly recovery strategies.”

Total outstanding balances reached a record high in the last quarter with a year-over-year increase of 6.8 per cent to $2.3 trillion. The report said that increase was driven by high average credit card and mortgage balances per consumer.

YOUNG PEOPLE SEEK CREDIT

Younger consumers drove originations, or new credit products, the report found. Gen Z originations growing 20 per cent year-over-year and millennial originations growing 10 per cent.

Gen Z consumers born in 1995 or later were the fastest-growing cohort adopting credit, with nearly 19 per cent starting to borrow--though the report attributed most of the increase in that cohort to more people reaching credit-eligible age. Millennials also saw a four per cent increase in the number of credit-active people.

MORTGAGE TRENDS

Mortgage originations declined 18 per cent year-over-year, the report said. Demand for mortgage refinancing has dropped with recent interest rate changes, as “most consumers who were eligible for refinancing have already taken the opportunity to do so.”

Real estate prices are declining, the report said, but interest rate hikes have driven up minimum payments and “put Canadian homeowners under even more pressure,” with mortgage payments increasing an average 17 per cent from a year earlier.

Indigo won’t pay ransom requested in February cyberattack

Holly McKenzie-Sutter, BNN Bloomberg

Canadian bookstore chain Indigo Books & Music Inc. will not pay ransom requested by hackers behind a Feb. 8 cyberattack that compromised employee data and continues to hamper online operations, the company said Thursday.

The retailer said it still does not know the identity of the attackers, but the investigation so far has revealed the software they used – and that stolen employee data could be posted to the dark web on Thursday.

“We have been informed that the criminals responsible for this attack may make some or all of the data they have stolen available using the dark web as early as today,” the company said in a Thursday statement to BNN Bloomberg.

“Given we cannot be assured that any ransom payment would not end up in the hands of terrorists or others on sanctions lists, Indigo has determined it would be inappropriate to pay the ransom.”

The unidentified hackers used software associated with infamous global ransomware group LockBit, the company said.

Indigo said it is working with Canadian police services and the U.S. Federal Bureau of Investigation (FBI) in response to the attack that saw the company halt its website and mobile app operations.

The company said it decided not to pay the requested ransom on the advice of privacy commissioners and law enforcement, as paying the ransom “rewards criminal activity” and does not guarantee the stolen data would be protected.

Ransomware uses software to encrypt the victims’ digital files and then demands payment to unlock them. The FBI has described LockBit as one of the world’s most active and destructive ransomware groups.

In an unusual move for the organization, LockBit apologized earlier this year for an attack by one of its “partners” that disrupted operations at Toronto’s Hospital for Sick Children, and offered to unlock the hospital’s data.

Other global LockBit victims include the U.K.’s postal service, software firm ION Trading UK and its clients and police departments and government agencies in the U.S.

Customer data was not compromised in the Indigo attack, the company has said, but some data from current and former employees was. It’s offering affected employees two years of free credit monitoring and identity theft protection from agency TransUnion of Canada.

Now three weeks after the attack, Indigo’s web operations still aren’t fully back online.

Only “select” book titles are available to order online, customers cannot use gift cards for online orders or access their online “wish lists,” and the store’s mobile app is not currently available.

The company said it can’t provide delivery status updates for orders placed online before Feb. 8 or allow people to cancel online orders, among other limitations.

With files from Bloomberg News and The Canadian Press.