CRYPTO CRIMINAL CAPITALI$M

Binance discloses investigation by Canadian securities regulator

Emily Nicolle, Bloomberg News

Crypto exchange Binance Holdings Ltd. said it has received an order from one of Canada’s securities regulators to investigate whether the platform attempted to find a way around local regulations and compliance controls while seeking approvals in the country.

The Ontario Securities Commission served the world’s largest digital asset exchange with an investigation order on May 10, the platform said in a filing this month with the Capital Markets Tribunal. Two days later, Binance announced it would be withdrawing from the market, citing new regulatory guidance related to stablecoins and investor limits.

The OSC’s order authorized “an extremely broad inquiry into whether Binance may have taken steps to circumvent Ontario securities law and compliance controls in relation to Binance.com or engaged in conduct contrary to Ontario securities law and/or the public interest,” Binance’s legal representation Borden Ladner Gervais LLP said in the filing.  

Binance has faced increasing regulatory and legal scrutiny in multiple jurisdictions over the last few years, most recently finding itself and its Chief Executive Officer Changpeng Zhao on the receiving end of a lawsuit by the U.S. Commodity Futures Trading Commission. While the details of the order were not immediately publicly available, Binance said the OSC had relied on the CFTC’s lawsuit as its impetus. 

When asked why Binance had opted to leave the Canadian market, Zhao, who is a Canadian citizen, said in a Twitter Space on Wednesday that he no longer believed it was possible to operate a “viable business” there from a costs perspective after the new regulations were enforced.

The OSC has since sent summons to Binance to supply documents for the investigation, which Binance argued earlier this month that it could not comply with as the summons was not specific enough on what was required. The Capital Markets Tribunal ordered Binance to comply with the summons at a May 26 hearing, according to a filing published on Monday.

“The OSC has made a request to access virtually limitless private data in the hope they may find something untoward,” a Binance spokesperson said in an email on Wednesday, adding that it viewed the order as “ungrounded.” A spokesperson for the OSC said the regulator will address the application later this week, without confirming whether Binance had complied with the summons as requested.

Canada’s move to impose toughened rules on crypto companies in the wake of trading platform FTX’s collapse last year has caused several major exchanges to withdraw from the market, including OKX and Bybit. Others, such as Coinbase Global Inc., have opted to stay in the country and pursue registration under the new rules.

Binance had separately argued that the OSC’s investigation order should be revoked because of a settlement agreement that the two signed in 2022 relating to its activities in the country, the filings showed. The agreement promised that the OSC would not bring further investigations against Binance while it was seeking registration, the exchange said.

In its decision on the case last week, the Capital Markets Tribunal said Binance must publicly declare the nature and content of the investigation order and what information it had been summoned to provide. 

A further hearing on the issue of jurisdiction will be held on June 2, the Tribunal said. Binance has steadily sought registration in multiple locations across the world over the last two years, including France, Japan and Dubai, without designating any site as its official headquarters. In the Canadian filings, Binance said it was incorporated and carries on business via a registered office located in George Town, Cayman Islands. 

QUE.INC.

Quebec premier announces Michael Sabia as new CEO of Hydro-Quebec

The Canadian Press

Quebec's government has officially tapped Michael Sabia as the next head of Hydro-Quebec. Sabia responds to a question at the Public Order Emergency Commission, Thursday, November 17, 2022 in Ottawa. , THE CANADIAN PRESS/Adrian Wyld

Quebec's government has officially tapped Michael Sabia as the next head of Hydro-Quebec.

In a tweet, Premier François Legault announced Sabia would serve as president and CEO of the Crown corporation, succeeding Sophie Brochu.

Legault says Sabia "is an experienced man who will be able to pursue and overcome the challenges of Quebec's energy transition," according to a translation.

Sabia has served as Canada’s deputy minister of finance since 2020.

Prior to that, he worked at the Department of Finance and the Privy Council Office before joining the private sector.

He is a former chief executive of the Caisse de depot et placement du Quebec and a former chief executive of BCE Inc.

In a statement, Finance Minister Chrystia Freeland said that as deputy finance minister Sabia "helped steer the Canadian economy through one of the most challenging moments in our history." 

Brookfield emerges as frontrunner for network as CVC recedes

Dinesh Nair and Aaron Kirchfeld, Bloomberg News

The Network International Holdings Plc headquarters in the Al Barsha district of Dubai, United Arab Emirates, on Thursday, April 20, 2023. Brookfield Asset Management Ltd. has submitted a £2.1 billion ($2.6 billion) takeover proposal for Middle Eastern credit card processor Network International, topping a rival buyout consortium. Photographer: Christopher Pike/Bloomberg , Bloomberg

Brookfield Asset Management Ltd. has emerged as the frontrunner to acquire London-listed Network International Holdings Plc after interest from a consortium backed by CVC Capital Partners cooled, according to people familiar with the matter. 

The Canadian investment group, which is in advanced negotiations with the Middle Eastern credit card processor, may be granted a short deadline extension on Thursday to finalize a formal offer, the people said. Buyout firm CVC and its partner Francisco Partners are not keen to engage in a bidding war for the business, they said, asking not to be identified discussing confidential information.

Brookfield made a preliminary offer of 400 pence per share for the company in April, valuing the business at £2.1 billion (US$2.6 billion) and topping an earlier 387 pence proposal from CVC and Francisco Partners. Network International extended a deadline for firm bids to June 1 and the Canadian bidder may be given about another week to reach a deal, according to the people. Deliberations are ongoing and talks could still fall apart, they said.

Shares in Network International have risen 23 per cent this year, giving the company a market value of about £1.9 billion. The stock was mostly unchanged in London on Wednesday.

Brookfield has an existing presence in the industry and has been an active investor in the Middle East. Last year, an arm of Brookfield bought control of First Abu Dhabi Bank PJSC’s Magnati payments unit in a deal valuing the operation at as much as US$1.15 billion. The potential synergies have given the Canadians an advantage over the buyout competitors, the people said.

Representatives for Brookfield, CVC and Network International declined to comment. A representative for Francisco Partners wasn’t immediately available for comment. 

AI is hot right now, but it's also being used to cool down buildings

Indira Kannan, BNN Bloomberg

An employee for EcoPilot Canada works on an HVAC system. (EcoPilot Canada)

With the approach of summer and a steady growth in the return of workers to offices, artificial intelligence could be an emerging solution in the space of heating, ventilation and air-conditioning (HVAC) systems for buildings.

While industrial, transport and agricultural emissions are visible and well known, buildings worldwide are among the top five emitters of greenhouse gases, estimated to account for well over a third of global energy-related carbon emissions, according to the World Green Building Council. The International Energy Agency says energy use in buildings makes up a third of global final energy consumption, with space cooling seeing the largest increase in demand in 2021.

Sam Ramadori, CEO of the Montreal-based BrainBox AI, says, “Cars have a natural replacement cycle. The problem with buildings is that they are there already, they have a super long life and each of them is unique. Right away the big problem is how do you, at scale, make a massive reduction in energy consumption in the millions of buildings around the world.”

Companies like BrainBox AI are now using AI to make HVAC systems more predictive and intelligent. The AI-driven systems use numerous factors including outside weather, forecasts, the type and cost of energy being used at different times, emissions from that energy, and occupancy to optimize a building’s energy usage and to lower emissions.

“What’s exciting is this brain that you can plug into the building and say well, 'I know more than just what the thermostat is saying, I know that today it starts out being sunny and then it’s going to be cloudy in two hours, so why do I need to air-condition the rooms aggressively when I know they’re going to cool down naturally?' That brain up there that sits on every building we install in, that’s an entirely new capability that’s only possible with autonomous AI.”

EcoPilot Canada, the Halifax-based subsidiary of a European company, also uses cloud-based AI systems to connect to a building’s HVAC automation system.

“Our system harnesses the thermodynamics of a building, helping to store energy and use only what’s needed,” says Jennie King, general manager at EcoPilot Canada.

EcoPilot Canada mostly caters to large commercial, institutional or residential buildings; its clients include Crombie and Minto Group. Brainbox AI’s customers include big-box and multi-site retailers like Sleep Country and SAIL, among around 750 buildings in 20 countries.

HRAI is the largest trade association for Canada’s HVAC industry, with its 1,200 members across the country contributing $12-14 billion to Canada’s GDP annually. Sandy MacLeod, president and CEO of HRAI, says the role of AI is evolving, and not in use aggressively in the industry yet, but notes his sector is critical for the government to meet its net-zero goals. MacLeod says he met officials with the City of Toronto in February to drive home his message: “If you really want to drive change, tackle government buildings first.”

For instance, the City of Toronto has set itself a target to go net zero on greenhouse gas emissions by 2040. MacLeod points out that over 70 per cent of the city’s buildings need to become energy efficient to meet this goal, but the retrofitting process covers only one per cent of this footprint every year.

“AI will be part of the retrofit model to improve efficiency,” he says. “AI will become more common in this sector in the next three-five years.”

At present, the HVAC industry is struggling to keep up with demand with a shortfall of workers so that “AI often becomes an afterthought,” says MacLeod.

As various sectors ramp up to meet or prepare for stricter emission standards, demand for AI-driven HVAC systems is booming as well. King says EcoPilot Canada has had to hire more staff to keep up with demand.

“The Canadian market is undergoing exponential growth,” she says. “Last year was about creating awareness. Earlier we contacted companies, but now for the first time we’re getting enquiries.” Several REITs who are their customers are expanding use of the AI-driven systems.

Many experts have recently raised concerns about the growth and potential dangers of AI. However, the HVAC industry does not foresee trouble on this front. Brainbox AI’s Ramadori says his company is a strong supporter of regulation.

“In our field it’s difficult to think about truly dangerous situations. In military situations or even cars on the road, you get into personal safety issues. In our case – what if I make your building really cold and you have to leave the building – it’s not a great outcome, but no one’s dying.”

Glencore said to prepare sweetened Teck bid

Thomas Biesheuvel, Dinesh Nair and Jacob Lorinc, Bloomberg News

Glencore Plc is getting closer to increasing its offer for Teck Resources Ltd., in a move aimed at ending weeks of limbo in the battle over the Canadian miner’s future.

The Switzerland-based commodities giant is working on a potential improvement to its bid that could be announced as soon as the coming weeks, according to people familiar with the matter, who asked not to be identified discussing private information. By raising its offer and ratcheting up shareholder pressure, Glencore is seeking to force Teck to the negotiating table, the people said.

The bitter fight that transfixed the mining world moved behind the scenes since late April, when Teck’s board was forced into an embarrassing reversal after failing to win enough investor support for a plan to split the company. Teck at the time reiterated its opposition to Glencore’s US$23 billion bid, and Glencore repeated that it was willing to go higher, but there has been little public movement since then.

Teck’s Class B shares rose 0.3 per cent to C$51.93 at 9:53 a.m. in Toronto.

The situation remains fluid, and Glencore’s plans could still change, the people said. Even if it can deliver a big enough increase to win over Teck’s shareholders, management and investors, there is still a potentially larger hurdle to face: Norman Keevil, the Canadian mining patriarch whose family’s “supervoting” shares give him a veto on any big decisions, has come out strongly against a Glencore takeover.

Still, an increased bid would add pressure on Teck’s board, which has been forced back to square one on its strategy to split out its coal business after April’s failed vote. While Glencore has been reluctant to boost its offer without some sort of engagement, some Teck shareholders have told the Swiss miner and trader they want to see a higher bid before they will be willing to exert more pressure in its favor, some of the people said.

There have been no recent discussions between the two sides, the people said, as Teck refuses to negotiate about a deal it has consistently called a “non-starter.”

Instead, the two companies have been travelling the globe to pitch investors on their competing visions for Teck’s future, the people said, with Teck Chief Executive Officer Jonathan Price meeting with top shareholder China Investment Corp., while Glencore executives jetted to Ottawa to make their case to Canadian officials.

Spokespeople for Glencore and Teck declined to comment. Calls to CIC’s office weren’t answered outside regular business hours.

The fight over Teck’s future reflects a revived appetite for dealmaking across the mining world, as well as the difficult questions facing companies with large coal operations.

An increased bid by Glencore would be the latest escalation in the battle that went public in early April after Teck’s board and controlling shareholder publicly rejected its earlier proposal. The Swiss commodities giant offered to buy Teck and then create two new companies combining their respective metals and coal businesses.

For Glencore, the deal would be company defining, allowing it to create one of the world’s biggest miners of metals while jettisoning its increasingly unpopular — but highly profitable — coal business in the process.

For its part, Teck has spent years considering options for its own coal operations before announcing a complicated plan to spin off a coal company that would continue funneling profits back to the metals business for several years following the split. Teck has one of the best copper growth pipelines among all the big miners, but has been depending on profits from its coal business to fund it.

The Canadian miner says it still sees a split as the best option, but now faces a race against time to come up with a new and simpler plan that won’t leave the metals business exposed. It has said it’s “working around the clock,” including engaging with counterparties interested in buying its coal assets.

One interested buyer is Canadian mining financier Pierre Lassonde, who has expressed interest in acquiring the coal assets with a consortium of investors. Teck is also engaging other coal producers, as well as considering options including a stake sale or possible listing.

Any takeover of Teck would face scrutiny from Prime Minister Justin Trudeau’s government, which has considerable latitude to block foreign acquisitions and has recently clamped down on foreign investment in Canada’s critical minerals industry. Trudeau and top government officials have been careful not to take a definitive stance on Glencore’s proposal but have indicated tacit support for the Vancouver-based company.

Equinor postponing Bay du Nord oil project off Newfoundland for up to three years

Sarah Smellie, The Canadian Press

Eldar Saetre, CEO of Equinor, speaking as he gives the company quarterly capital market update in London, Thursday, Feb. 6, 2020. Equinor is pausing its plans to develop the Bay du Nord oil project, which would open a fifth oilfield off the coast of Newfoundland. (THE CANADIAN PRESS/AP/Alastair Grant)

Equinor is pausing its plans to develop a controversial $16-billion oil project off Newfoundland’s east coast.

The Norwegian energy giant announced Wednesday that it was postponing its plans for the Bay du Nord oil project for up to three years. The project has seen significant cost increases in recent months, mostly due to volatile market conditions, the company said in a news release.

Trond Bokn, Equinor's senior vice-president of project development, said the company will reassess the project to see if "further optimizations" can be made.

“Bay du Nord is an important project for Equinor," he said in a news release.

The Bay du Nord comprises five different discovery areas that are said to hold a total of 979 million barrels of recoverable oil, according to estimates in February from Newfoundland and Labrador's offshore oil regulator. The development would open the province's fifth offshore oilfield and be its first deep-water oil project.

Newfoundland and Labrador’s latest provincial budget factored in economic gains from the Bay du Nord project beginning in 2025.

The federal government gave the project environmental approval last April, drawing sharp criticism from environmentalists. Equinor and the Newfoundland and Labrador government have said the project will produce far fewer greenhouse gas emissions while extracting oil than any other project in Canada. But environmentalists and climate scientists counter that the bulk of the greenhouse gas emissions from fossil fuels are produced when they are burned as fuel.

In March, a lawyer representing environment and Indigenous groups argued in Federal Court that the federal approval of the project was flawed because it did not consider these “downstream” emissions.

Environment Minister Steven Guilbeault said in January that approving Bay du Nord was the “most difficult decision” he’s had to make since assuming the portfolio in 2021.

At the time, Equinor had not yet confirmed it would make the full investment necessary to carry the project through to development. The company’s website says that before the delay, the Bay du Nord project was forecast to produce its first oil by the end of the decade.

This report from The Canadian Press was first published on May 31, 2023.

How happy are Canadians in the workplace? Satisfaction is on the rise

Ben Cousins, BNN Bloomberg

May 31, 2023

A woman in an office is seen in this file image. (Pexels)

A new report found nearly half of Canadian workers feel satisfied in their current working life with happiness climbing in most demographics.

According to ADP Canada’s Happiness@Work Index for May, the National Work Happiness Score reached 6.7 out of 10, representing an increase 0.1 points from April.

ADP says the May Index means about 44 per cent of Canadian workers feel satiated with their role and responsibilities. Increases were also reported in the categories of compensation and benefits, recognition and support and career advancement options.

Haslam, ADP Canada’s vice-president of marketing, told BNNBloomberg.ca the latest trend is “very good news” for the workplace.

“It is really important that working Canadians have healthy relationships at work, and that Canadian employers are actually focused on the happiness of their team in order to get the best out of them,” she said.

Work happiness climbed or remained the same in every geographic location with the exception of Alberta, which fell 0.4 points to 6.5.

Haslam said that while the report doesn’t examine factors behind the happiness levels, she can speculate as to what might be behind the decline.

“My guess would be that things like fires in Alberta impact people's home lives and what we know about people is we're whole people, what it is that's impacting our personal life … certainly does bleed into the workplace,” she said.

When it comes to age demographics, work happiness among those aged 56 to 75 declined by 0.1 points, while the other demographics either climbed marginally or remained the same.

For the coming months, Haslam calls herself an “optimist” and hopes for the happiness trend to continue through the summer.

“I love patio season in Canada and so I'll admit to you that I believe that it will continue to go up,” she said. “I think one of the key elements that we need to be looking at is really what it is that's driving it, which is why I'm very interested in both the regional as well as the generational differences that we find on the Happiness@Work Index.”

Methodology

The Happiness@Work Index is measured monthly through a survey fielded by Maru Public Opinion on behalf of ADP Canada and is undertaken by the sample and data collection experts at Maru/Blue. The survey is run in the first week of each reported month for consistency purposes and asks over 1,200 randomly selected employed Canadian adults (including both employees and self-employed individuals) who are Maru Voice Canada online panelists to rate workplace factors on a scale from 1 to 10. Discrepancies in or between totals when compared to the data tables are due to rounding. 

The results are weighted by education, age, gender and region (and in Québec, language) to match the population, according to Census data. This is to ensure the sample is representative of the entire adult population of Canada. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of +/-2.8%, 19 times out of 20. 

Trans Mountain pipeline gets extra government support as costs balloon

Robert Tuttle, Bloomberg News

The Trans Mountain pipeline received additional support from the Canadian government after the cost to expand the controversial Alberta-to-British Columbia oil conduit jumped 44 per cent in March.

The government, which guaranteed loans last year that allowed the project to secure $10 billion (US$7.4 billion) of private financing, has since provided an additional $2.5 to $3 billion for the Trans Mountain expansion in two separate backstops, according to information posted on the Export Development Canada website. 

One guarantee was issued in March and the other in May. Last year’s loan guarantees were extended after the costs of the project increased 70 per cent and Finance Minister Chrystia Freeland said that no additional public money would be invested in Trans Mountain.

Trans Mountain has faced repeated cost increases and regulatory delays since the expansion project was first proposed a decade ago. In March, the company announced that the cost of expanding the pipeline system’s capacity to 890,000 barrels a day rose to $30.9 billion — the latest of a series of increases over recent years — because of factors including inflation, supply chain challenges, floods in British Columbia, unexpected archaeological discoveries and challenging terrain.

Canadian Prime Minister Justin Trudeau decided to nationalize the system in 2018, paying Kinder Morgan Inc. $4.5 billion after the midstream company threatened to cancel the expansion amid fierce local opposition and rising costs. 

Last June, Canada’s budget watchdog said the line would be a “net loss” for taxpayers. The expansion project has incurred $21.5 billion in construction capital spending costs plus $2.8 billion in financial carrying costs since project inception, the company said in its first-quarter financial statement. 

“To meet obligations as they become due, TMC will require additional funding through external financing,” the company said. External financing is expected to be obtained in “timely manner” and on satisfactory terms, but “there is no assurance that external financing will be obtained.”

BAD BOSS

Shopify faces class action over severance offered to recently laid off staff

Tara Deschamps, The Canadian Press

A class-action lawsuit alleges Shopify Inc. reneged on a deal it offered some employees who were laid off in a recent round of cuts.

The class action alleges some of the Ottawa software business' employees laid off at the start of May were presented with departure packages outlining hefty severance sums they would be entitled to should they sign the agreement within a few days.

However, once workers signed the agreements and before the deadline passed, Shopify allegedly told departing staff they would instead be given substantially smaller sums than were initially offered.

"The individuals did the reasonable thing, which is to accept, only to be told even though we made you reasonable offers, even though you accepted that reasonable offer, we're just not going to do it and you have to sign a brand new agreement for a much lesser amount,” said Lior Samfiru, a lawyer pursuing the case.

“It just doesn’t work like that. I review severance packages every day and have 21 years of doing this and I have never seen any employer ever do anything like that.”

The class action's plaintiff Iain Russell, who worked for Shopify for seven years, says he was initially offered more than $88,000, which he accepted. Then, Shopify allegedly put forward a roughly $44,000 agreement. If he did not accept the $44,000 offer, he was told he would receive about $36,000.

When their severance offers were revised, Samfiru said workers were sent a “vague statement about miscalculating.”

"For many people...the difference is significant," Samfiru said.

"We've seen anywhere from a $10,000 to $50,000 and $60,000 difference between what individuals accepted and what Shopify now says they're not going to get. We are not talking about anything minor here."

Samfiru alleges Shopify's actions constitute a breach of contract and is seeking $80 million in damages and $50 million in punitive, aggravated and exemplary damages.

Those amounts could change based on how many workers were presented with shifting offers, he said.

Shopify did not respond to a request for comment.

The company reduced its head count by 20 per cent at the start of the month and by 10 per cent last year.

The company refused to give the number of staff that would be departing the company during the May cut, but it reported in a regulatory filing that it had 11,600 employees at the end of 2022. Twenty per cent of that amounts to about 2,300 people.

In an open letter announcing the layoff, Shopify founder and chief executive Tobi Lütke promised departing staff at least 16 weeks of severance plus a week for every year of tenure at Shopify. Medical benefits and an employee assistance program will cover departing staff over the same period.

Those leaving will also be able to keep their office furniture and though they'll have turn in their company laptops, Lütke said Shopify promised to help pay for new ones.

He positioned the layoff, which came at the time as Shopify sold its logistics business, as an effort to reduce distracting “side quests” that divert attention away from the company’s main goals.

“I recognize the crushing impact this decision has on some of you, and did not make this decision lightly,” Lütke wrote.

This report by The Canadian Press was first published May 30, 2023

INSTITUTIONAL WHITE SUPREMACY

Nurses report frequent experiences of racism in new survey
Story by Cara Tabachnick • Yesterday 

Public sector nurses rally in New York City© Selcuk Acar/ via Getty Images

Nurses report seeing or hearing racism and experiencing discrimination from almost 80% of their patients, according to a survey released on Wednesday by the Robert Wood Johnson Foundation.

Asian, Black and Latino nurses are significantly more likely to experience racist microaggressions than their White peers, and they told researchers that patients frequently use racial slurs or question their credentials.

Six in 10 nurses also reported they face discrimination from their colleagues as well, according to the survey. Of the nurses who have experienced racism or discrimination, 9 in 10 said it has affected their well-being and mental health.

And even though an overwhelming majority of nurses faced some form of racism, few reported the incidents. Just 1 in 4 nurses reported the discrimination they saw or experienced to management, the survey said.

Nurses said that increasing diversity in management would help address the issues, as well as more training on diversity, equity and inclusion. Eight in 10 nurses said "zero-tolerance workplace discrimination policies, clear consequences, and reporting anonymity" would improve the ability to retain racially and ethnically diverse nurses.

"We as nurses must hold ourselves accountable for our own behavior and work to change the systems that perpetuate racism and other forms of discrimination," Beth Toner, a registered nurse and director of program communications at the Robert Wood Johnson Foundation, said in a news statement

Researchers surveyed 980 nurses in March and April 2022 to gather their experiences and perceptions of racism. These latest findings follow a 2022 survey of 5,600 nurses released last year by the National Commission to Address Racism in Nursing in which half the nurses agreed there is "a lot" of racism in nursing.

There are about 4.2 million registered nurses in the United States, according to the American Association of Colleges of Nursing, comprising the largest component of the healthcare profession.