Ford Suffers $4.5 Billion Setback Amid Tesla's Aggressive Pricing

By ZeroHedge - Jul 31, 2023

• Ford's EV division is expected to lose $4.5 billion this year, $1.5 billion more than anticipated, with the division already reporting a loss of $1.8 billion this year, compared to last year's $2.1 billion loss.
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• Due to an industry-wide price war for EVs, led by Tesla, Ford is reassessing its EV production schedule and spending plans, pulling back on its initial production ramp-up and predicting a delay in reaching its annual production target of 600,000 EVs.
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• Ford has raised its guidance and reported strong earnings, with the CEO attributing the company's resilience to its shift towards digital experiences and EVs.Join Our Community

As we first noted last week, Ford is slated to lose $4.5 billion from its EV segment this year, a $1.5 billion larger loss than the company had expected. 

So far this year, the division has lost $1.8 billion and this year's $4.5 billion loss figure blows away last year's $2.1 billion loss. Ford also announced that its electric F-150 pickup trucks will undergo a price cut, according to Fox.

Ford beat earnings on Thursday and reported adjusted EPS of $0.72, beating expectations of $0.54. It posted revenue of $45 billion and adjusted EBITDA of $3.8 billion, above estimates of $3.15 billion. We detailed analyst takes on the report late last week in this piece. 

The company also raised its guidance, forecasting adjusted EBIT of $11 billion to $12 billion from $9 billion to $11 billion. The company is now guiding for free cash flow of $6.5 billion to $7 billion, from $6 billion. 

But reality has sunk in about the company's comments regarding its EV production schedule and spending plans. Price cuts in the industry, led by Elon Musk and Tesla, have thrown Ford's production targets into a tailspin and Morgan Stanley noted on Friday morning that "major changes to the EV strategy" could be necessary, according to a wrap up by Bloomberg. 

Ford now says it is "throttling back" on plans to ramp up EV production, the wrap up said. It blamed the price war for EVs as part of the cause and told shareholders it would need another year to meet its target of 600,000 EVs produced annually. 

Ford CEO Jim Farley said late last week: "The shift to powerful digital experiences and breakthrough EVs is underway and going to be volatile, so being able to guide customers through and adapt to the pace of adoption are big advantages for us. Ford+ is making us more resilient, efficient and profitable, which you can see in Ford Pro's breakout second-quarter revenue improvement (22%) and EBIT margin (15%)."

CFO John Lawler said yesterday that the company "has ample resources to simultaneously fund disciplined investment in growth and return capital to shareholders – for the latter, targeting 40% to 50% of adjusted free cash flow," Bloomberg added. He now says Ford is "not providing a date" for producing 2 million EVs per year, which was previously the company's target for 2026. 

Ford's inability to compete with Tesla was noted earlier this year in a piece titled Tesla 'Weaponizes' Price-Cuts To Crush EV Competition. 

Is the company pulling an Intel and "kitchen sinking" its guide for the year, or has Elon Musk's price cuts over at Tesla really put the legacy automaker on the ropes? Ford reports again on October 26, where we'll get our next glimpse into its continuing operations this year. 

By Zerohedge.com

Tesla, Ford, And GMC Are Racing To Capture The EV Truck Market

By Felicity Bradstock - Jul 29, 2023

• Production has started on Tesla's Cybertruck at its Gigafactory in Austin, Texas, following on from other automakers like Ford, GMC, and RAM who have already released electric truck models.
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• Besides established brands, start-ups such as Rivian and Telo are entering the market with innovative EV truck designs, promising impressive speed, range, and load-carrying capabilities.
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• Chinese automakers are preparing to compete in the EV truck market, with Zhejiang Geely Holding Group announcing the first batch of its Radar RD6 EV pickup truck ready for export, at a more affordable price than many American models.Join Our Community

As the electric vehicles (EV) car market booms, automakers are looking to expand their ranges to include electric trucks. Consumer interest in electric trucks has been about as strong as the offering, limited due to the low distance range and long recharging times involved. However, several car manufacturers now have big plans to bring impressive new electric truck models to the market over the next year in a bid to reach a broader market. 

This month, production started on EV giant Tesla’s Cybertruck, almost three years after the announcement that the automaker planned to produce a pickup truck model. The Cybertruck will be produced in Tesla’s Gigafactory in Austin, Texas and a first glimpse of the truck was provided by CEO Elon Musk when he released footage driving around the city. The Giga Texas facility is built on 2,500 acres, with 10 million square feet of manufacturing space. 

So far, Tesla says it’s received reservations for over 1.5 million Cybertrucks, costing just $100 per reservation. The projected number of sales is therefore uncertain at present. Despite leading in the world of EVs, Tesla is now catching up to the truck offerings of other automakers, such as Ford’s F-150 Lightening. Ford began producing its EV truck in 2021, receiving positive consumer interest and good reviews to date. Other big truck makers, including Rivian, GMC, and RAM, also have plans to release highly-competitive electric truck models, meaning the long-awaited Cybertruck will have a lot to prove. The final price of the truck has not been released yet, although it was originally expected to be sold at $39,900 for the single-motor variant and around $70,000 for the three-motor option. There were also rumours that the pickup might be built using bullet-proof glass. 

With production well underway, Ford uses the same model as the best-selling vehicle on the North American market for the last four decades for its first electric pickup offering, the F-150. Tens of thousands of people across the U.S. have made reservations for the truck since 2021. Ford claims it has a range of 320 miles, with capabilities of powering other equipment, such as tools, and the ability to tow 4.5 tonnes. It will cost consumers anywhere between $60,000 and $100,000. 

And it’s not only well-known automakers that are getting in on the competition, with many start-ups developing new, innovative lines of EVs. U.S. consumers may opt for the Rivian R1T, a model that’s currently in production by start-up Rivian. The truck is expected to achieve a range of around 300 miles and is capable of 0-60 mph in around 3 seconds. It is also thought to be able to move through over 90cm of water and tow up to 5 tonnes. The pickup will cost buyers around $73,000. Rivian is also producing a 7-seat version of the SUV. 

Alternatively, Telo, a U.S.-based start-up, thinks it can offer consumers something different with its small modular electric truck. Telo claims its truck has “Toyota Tacoma capability,” but is around the same size as a Mini Cooper, at 152 inches. As it has no engine, the truck is made more compact, with batteries stored in the floor and motors. The Telo can accelerate from 0-60 mph in around 4 seconds, has a top speed of 125 mph, and has a range of around 350 miles. The company uses space wisely, meaning despite being compact it can seat five passengers or be rearranged to carry heavy and bulky items. Right now, the Telo is still in the prototype phase, but it could provide a blueprint for the future of electric trucks, something more practical and compact with all the capabilities of a traditional pickup. 

While U.S. automakers are rising fast in the world of EV trucks, they are once again facing staunch competition from Asia. Several Chinese car manufacturers – many of which are already leading in the EV market – have announced plans to release electric trucks that could compete with offerings from well-known automakers. Chinese company the Zhejiang Geely Holding Group announced this month that the first batch of its Radar RD6 EV pickup truck is now ready for export. The Geely Group is the parent company and co-owners of several major car brands including Volvo, Polestar, ZEEKr, and Lotus. The RD6 starts at a much more affordable $25,000, with China continuing to lead on lost-cost EVs. Geely expects to roll out a whole range of electric lifestyle vehicles, including pickup trucks, SUVs, and ATVs in the coming years. 

With Tesla expected to bring its Cybertruck to the market within the next year, consumers are increasingly looking to the future of electric trucking. Several major U.S. automakers have already started producing their electric truck ranges and smaller start-ups are not far behind. To add to the competition, China continues to surprise the auto world by producing impressive EV models at much lower prices than their American counterparts, suggesting the Chinese hold on the U.S. EV market could grow over the next decade. 

By Felicity Bradstock for Oilprice.com

 

Green Hydrogen Gets Greener With Record-Breaking Solar Device

By Brian Westenhaus - Jul 29, 2023

• The solar device, known as a photoelectrochemical cell, integrates halide perovskite semiconductors with electrocatalysts in a single, scalable device that can split water into hydrogen and oxygen using solar energy.
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• A key innovation of the device is the use of an anti-corrosion barrier that protects the cheap halide perovskite semiconductor from water, without hindering the transfer of electrons, overcoming previous challenges with water instability.
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• The breakthrough technology could have broad applications in driving chemical reactions that convert feedstocks into fuels using solar-harvested electricity.Join Our Community

Rice University engineers have created a device that “turns sunlight into hydrogen” with record-breaking efficiency. The device integrates next-generation halide perovskite semiconductors with electrocatalysts in a single, durable, cost-effective and scalable device. The press release believes the engineers have set a new standard for hydrogen technology. The device is factually a solar driven water splitting cell.

According to a study published in Nature Communications, the device achieved a 20.8% solar-to-hydrogen conversion efficiency. Today the study is not behind a paywall.

The new technology is a significant step forward for clean energy and could serve as a platform for a wide range of chemical reactions that use solar-harvested electricity to convert feedstocks into fuels.

The lab of chemical and biomolecular engineer Aditya Mohite built the integrated photoreactor using an anticorrosion barrier that insulates the semiconductor from water without impeding the transfer of electrons.

Austin Fehr, a chemical and biomolecular engineering doctoral student and one of the study’s lead authors commented, “Using sunlight as an energy source to manufacture chemicals is one of the largest hurdles to a clean energy economy. Our goal is to build economically feasible platforms that can generate solar-derived fuels. Here, we designed a system that absorbs light and completes electrochemical water-splitting chemistry on its surface.”

The device is known as a photoelectrochemical cell because the absorption of light, its conversion into electricity and the use of the electricity to power a chemical reaction all occur in the same device. Until now, using photoelectrochemical technology to produce green hydrogen was hampered by low efficiencies and the high cost of semiconductors.

“All devices of this type produce green hydrogen using only sunlight and water, but ours is exceptional because it has record-breaking efficiency and it uses a semiconductor that is very cheap,” Fehr added.

The Mohite lab and its collaborators created the device by turning their highly-competitive solar cell into a reactor that could use harvested energy to split water into oxygen and hydrogen. The challenge they had to overcome was that halide perovskites are extremely unstable in water and coatings used to insulate the semiconductors ended up either disrupting their function or damaging them.

Michael Wong, a Rice chemical engineer and co-author on the study noted, “Over the last two years, we’ve gone back and forth trying different materials and techniques.” After lengthy trials failed to yield the desired result, the researchers finally came across a winning solution.

“Our key insight was that you needed two layers to the barrier, one to block the water and one to make good electrical contact between the perovskite layers and the protective layer,” Fehr said. “Our results are the highest efficiency for photoelectrochemical cells without solar concentration, and the best overall for those using halide perovskite semiconductors.

“It is a first for a field that has historically been dominated by prohibitively expensive semiconductors, and may represent a pathway to commercial feasibility for this type of device for the first time ever,” Fehr said.

The researchers showed their barrier design worked for different reactions and with different semiconductors, making it applicable across many systems.

Mohite said, “We hope that such systems will serve as a platform for driving a wide range of electrons to fuel-forming reactions using abundant feedstocks with only sunlight as the energy input.”

“With further improvements to stability and scale, this technology could open up the hydrogen economy and change the way humans make things from fossil fuel to solar fuel,” Fehr added.

***

There is a great deal of optimism in this work. Yet we need to remember that a top of the line solar collector at best of day is only going to see about 100 watts of power incoming per square meter. One has to ask just how useful is free hydrogen going to be in a niche market.

The technology is very much at its beginning. How far it can go is yet to be researched and engineered out somewhat more. But even at 20.8% solar driven water splitting efficiency there is a very long way to go.

***

Rice graduate students Ayush Agrawal and Faiz Mandani are lead authors on the study alongside Fehr. The work was also authored in part by the National Renewable Energy Laboratory, which is operated by Alliance for Sustainable Energy LLC for the Department of Energy under Contract DE-AC36-08GO28308.

By Brian Westenhaus via New Energy and Fuel 

Big Oil Continues To Be Pushed Toward Greener Endeavors

By Irina Slav - Jul 31, 2023

• Major oil companies are facing renewed pressure to decarbonize, despite recent prioritization of energy security over decarbonization due to the pandemic and Russia's invasion of Ukraine.
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• Supermajors like Exxon and Chevron are exploring lithium mining and expanding carbon capture capabilities as part of their transition efforts.
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• The call for decarbonization comes amid paradoxical actions from governments that have contributed to Big Oil's profits through fuel subsidies and pleas for increased oil production.

Last year, Big Oil made record profits that got stuck in the throats of governments, activist organizations, and international bodies such as the UN and the IEA.

Yet those same governments practically encouraged these profits by subsidizing fuels to avoid even higher inflation and all the problems that such a development would have produced.

In 2022, with demand for energy roaring back after the pandemic and Russia’s invasion of Ukraine, the consequent gas supply squeeze, and fears of a similar oil squeeze, the target that Big Oil had painted on its back temporarily disappeared. Energy security temporarily became more important than decarbonization.

That era is over, according to some analysts. Now, the pressure on Big Oil to decarbonize is going to increase.

All Big Oil majors except BP reported weaker profits for the second quarter because of the decline in oil and gas prices. BP, which reports on Tuesday, is also expected to book slimmer profits for this year’s second quarter than last year’s. The time of plenty seems to be over.

According to the Financial Times, this means that the supply squeeze threat has passed, and now the governments that subsidized diesel and gasoline will once again increase the pressure on the oil industry to go green.

In fact, the pressure has never decreased, even when oil was trading above $100 a barrel last year. And despite that pressure, Big Oil has signaled a retreat from earlier ambitious transition targets.

It seems everyone got a reality check last year. Only Big Oil came out with different outtakes from that check than the governments that slapped windfall profit taxes on the industry and then worried it would stop investing in more production.

The pressure is working: European supermajors have been splashing on various low-carbon projects, from wind and solar capacity to EV chargers. But that was before 2022. This year, BP and Shell basically walked back their decarbonization pledges to the frustration of their activist investors.

Those same investors, by the way, received much lower support for their climate-related resolutions at this year’s AGMs than in previous years. The rest of the shareholders must have liked the share repurchase programs and the fatter dividends.

Meanwhile, the American supermajors, who have generally steered clear of things like wind and solar, are venturing into raw transition materials: Exxon and Chevron both announced forays into lithium mining this year, signaling the potential direction their decarbonization drive would take.

The two are also busy expanding their carbon capture capabilities. Exxon, for one, sees a future in which its decarbonization business could one day outgrow its core oil and gas business.

In Europe, BP and TotalEnergies just won a tender for offshore wind capacity in Germany, essentially beating the wind industry on its own turf. Just because the leadership of these companies has signaled it will go easy on the whole decarbonization affair doesn’t mean it will pass on opportunities to benefit from generous government funding for wind and solar.

Big Oil has been under the microscope for years now, with governments, regulators, and activists all watching the industry closely for any suggestion they might want to expand their core business.

Yet when they did do that, activists protested last year as expected, but governments didn’t. Governments in Europe spent billions on fuel subsidies contributing to Big Oil’s massive profits. In the U.S., President Biden and his energy secretary pleaded with Big Oil to boost oil production after actively working to make boosting oil production as difficult as possible.

Now, decarbonization is back on the table as a top concern amid a ramp-up in the climate emergency talk from officials such as the UN’s Antonio Guterres. But the perception that the supply squeeze threat is over, as suggested by the Financial Times last week, may well be wrong.

Oil and gas prices are palpably lower now than they were this time last year, but they are on the climb. And the reason they are on the climb is that fears are growing that demand for oil will soon exceed supply thanks to OPEC+ efforts to prop up prices and unrelenting demand growth, despite price movements.

The current situation is somewhat paradoxical: national and international government officials are calling for the decarbonization of the hydrocarbons industry. At the same time, they are forecasting higher demand for these same hydrocarbons and, in the case of the IEA, warning that this higher demand would result in a deficit.

It would be reasonable to suggest that this means decarbonization efforts are not exactly going as planned. The reason for this is that the need for energy is immediate and pressing. People need energy right now and not in five years. And Big Oil is happy to help while it invests in that new energy capacity that will be up and running in five years thanks to government subsidies.

By Irina Slav for Oilprice.com

BlackBerry software to be used by international electric vehicle consortium

BlackBerry Ltd. says some of its software and services have been chosen for use in a Foxconn-backed electric vehicle consortium.

The Waterloo, Ont.-based software company says the Mobility in Harmony consortium will use its QNX and Ivy offerings to build the platform.

QNX is a cloud- and artificial intelligence-based software foundation while Ivy is an in-vehicle software platform helping automakers monetize data.

Software giant Microsoft, South Korean battery maker LG Energy Solution and luxury electric vehicle manufacturer Karma Automotive are among the thousands of consortium members.

The consortium is working on building a single-row, three-seat vehicle geared toward Asian consumers that it calls Project X. 

The vehicle is due to launch in Japan later this year, and will be followed by six-seat and nine-seat vehicles.

This report by The Canadian Press was first published July 31, 2023.

 

Xplore to offer faster rural satellite internet following Jupiter 3 launch

The Canadian Press

In a time exposure, a SpaceX Falcon Heavy rocket launches from Cape Canaveral, Fla., Friday, July 26, 2023.(Malcolm Denemark/Florida Today via AP)

Canadian rural internet provider Xplore Inc. says it will offer faster satellite internet to those in remote locations this fall following the launch of the Jupiter 3 satellite into space.

The New Brunswick-based telecommunications company says the technology will offer a homegrown alternative to broadband internet service offered to rural Canadians through SpaceX's Starlink low-earth orbit satellites.

Xplore president and chief commercial officer Rizwan Jamal says his company's new broadband service will include speeds of 100 megabits per second, no upfront hardware costs and 24/7 Canada-based customer support.

Jupiter 3, touted as the highest capacity satellite by EchoStar Corp. subsidiary Hughes Network Systems, was launched on a SpaceX Falcon Heavy rocket from the Kennedy Space Center in Florida on Friday and began sending and receiving its first signals on Saturday morning.

Telecommunications consultant Mark Goldberg says Xplore's new offering represents another tool to provide internet connectivity to households beyond the reach of fibre or fixed wireless, and could be a more reliable option for rural Canadians than the technology used by Starlink.

Xplore says specific availability and pricing details will be available closer to service launch in the coming months.

This report by The Canadian Press was first published July 31, 2023.

New housing minister says closing door on newcomers is no solution to housing crunch

Nojoud Al Mallees, The Canadian Press

Canada's new housing and infrastructure minister says closing the door to newcomers is not the solution to the country's housing woes, and has instead endorsed building more homes to accommodate higher immigration flows. 

Sean Fraser, who previously served as immigration minister, was sworn in Wednesday morning as part of a Liberal government cabinet shuffle aimed at showcasing a fresh team ahead of the next federal election. 

He comes into the role at a time when strong population growth through immigration is adding pressure to housing demand at a time when the country is struggling with an affordability crisis. 

"The answer is, at least in part, to continue to build more stock," Fraser told reporters after being sworn in.  

"But I would urge caution to anyone who believes the answer to our housing challenges is to close the door on newcomers."

Instead, the minister said immigration would be part of the solution to the housing challenge.

"When I talked to developers, in my capacity as a minister of immigration before today, one of the chief obstacles to completing the projects that they want to get done is having access to the labour force to build the houses that they need," he said. 

Prime Minister Justin Trudeau's decision to hand over the federal housing file to the Nova Scotia MP has been praised by experts who say that the Liberals need a strong communicator in charge as Canadians deal with an affordability crunch. 

As part of the shakeup, the housing file has been merged with infrastructure and communities. Fraser said the goal is to look at housing and infrastructure projects together, rather than in isolation. 

"If we encourage cities and communities to build more housing where infrastructure already exists or where it's planned to be, we're going to be able to leverage more progress for every public dollar that's invested," he said. 

Ahmed Hussen, who became housing minister in 2021, has faced criticism for his handling of the file as the housing crisis worsened across the country. 

Hussen is staying in cabinet as minister of international development. 

"The selection of Sean, I think, is a recognition that the job requires fundamentally an energy and urgency and a passion in order to be able to effectively compete with the message that (Conservative Leader) Pierre Poilievre has put forward," said Tyler Meredith, a former head of economic strategy and planning for Trudeau’s government.

Meredith said the choice to shift Fraser from immigration to housing also signals the federal government knows the two files are linked. 

"If they lose the argument on housing, they will lose the argument on immigration, and they will then lose what is frankly, some of the some of the most effective pieces of their economic strategy," Meredith said.

Canada's population grew by more than one million people in 2022, a pace that experts say is adding pressure to housing demand. That, in turn, pushes up prices even further. 

A recent analysis by BMO found that for every one per cent of population growth, housing prices typically increase by three per cent. 

The Liberals have been taking a lot of heat from Poilievre  for the state of the housing market. He's blamed Trudeau's government for the crisis, as well as municipal "gatekeepers" for standing in  the way of new developments. 

Poilievre has focused on the need to build more housing and has not weighed in on whether Canada needs to change the number of people it lets into the country. 

The Conservative leader has also been particularly focused on speaking to young people struggling with affordability, commonly referring to the "35-year-olds still living in their parents' basements" in the House of Commons.

Fraser, 39, acknowledged during the news conference that housing affordability is a major challenge facing younger Canadians in particular. 

"It's a real challenge for people my age and younger who are trying to get into the market, but it's also a challenge for low-income families," Fraser said. 

"There's no simple solutions, but if we continue to advance measures that help build more stock, that help make sure it's easier for people to get into the market and make sure we're offering protections for low-income families, particularly in vulnerable renting situations, we're going to be able to make a meaningful difference."

The housing crisis that once was associated with Vancouver and Toronto is now affecting all corners of the country, and experts say a shortage of homes is at its root. 

The Canada Mortgage Housing Corporation has warned the country needs to build 3.5 million additional homes — on top of the current pace of building — to restore affordability by 2030.

Carolyn Whitzman, a housing policy expert and adjunct professor at the University of Ottawa, said the decision to combine housing and infrastructure is a good move. 

"Housing is infrastructure. It's essential, as essential as water and sewers and hospitals and schools, for the functioning of a society," she said. 

Whitzman also called Fraser a "fairly effective communicator" and noted his experience as immigration minister may also help inform his role in the housing file.  

JUST OUTLAW TOBACCO

Warning labels on individual cigarettes aim to deter kids, convert parents

Christopher Reynolds, The Canadian Press

An example of cigarette packaging with expanded warnings, including a warning printed on the cigarettes themselves, is shown on a screen after a news conference on expanded regulations for tobacco products, in Ottawa, on Friday, June 10, 2022. THE CANADIAN PRESS/Justin Tang

A fresh set of Health Canada regulations that will require warning labels on individual cigarettes is set to come into effect Tuesday.

The move, announced earlier this year, makes Canada the first country in the world to take that step in the ongoing effort to help smokers kick the habit and deter potential puffers from picking it up.

The wording that will eventually be on every cigarette, written in English and French on the paper around the filter, ranges from warnings about harming children and damaging organs to causing impotence and leukemia. "Poison in every puff," cautions one.

The labels will dissuade teens leaning toward taking up the habit and push nicotine-dependent parents looking to fight it, predicted Rob Cunningham, a senior policy analyst at the Canadian Cancer Society.

Once the regulations take effect, manufacturers have until the end of July 2024 to ensure the warnings are on all king-size cigarettes sold, followed by regular-size cigarettes and little cigars with tipping paper and tubes by the end of April 2025.

"For youth who experiment by 'borrowing' a cigarette from a friend, it's going to mean they will see the cigarettes — even if they may not see the package — where the warnings appear," Cunningham said in a telephone interview. "It's going to prompt discussion, including by smokers during smoke breaks: 'What warning have you got today?'

"Often it's kids who are urging their parents to quit, and this provides new information and messaging," Cunningham said.

Dozens of studies in Canada and elsewhere show the effectiveness of printing warnings on each cigarette, he noted.

Tobacco use continues to be one of Canada's most significant public health problems and remains the country's leading preventable cause of disease and premature death, then-health minister Jean-Yves Duclos said in a May 31 statement announcing the new warning labels.

About 15 to 20 per cent of patients with cancer are smokers at the time of diagnosis, with a higher percentage for certain types, such as lung cancer and head and neck cancers, said Dr. Lawson Eng, a medical oncologist at Toronto's Princess Margaret Cancer Centre and assistant professor in the University of Toronto’s department of medicine.

He couldn't say "for sure" that the messaging will reduce rates, but he noted that past efforts have succeeded in tandem with other public health measures, such as including cessation strategies in cancer screening and care.

"I suspect it will likely continue to help with decreasing smoking prevalence and also help with encouraging people who are smoking to try to quit," Eng said.

Tobacco advertising, promotion and sponsorship are banned in Canada, with warnings on cigarette packs dating back to 1972.

In 2001, Canada became the first country to require tobacco companies to print pictorial warnings on the outside of cigarette packages and include inserts with health-promoting messages.

More than 130 countries have followed suit, according to the Canadian Cancer Society.

Not all smokers view the escalating warnings favourably.

"I don't think that will really change much. A lot of people will continue to smoke," said Giovany Lincourt. "When I see a photo of a black lung, it hits me, but I still continue because it's a bad habit."

The 40-year-old Montrealer, who sampled his first cigarette at age 16, said still higher taxes would make a better deterrent. A pack of 25 typically costs between $11 and $16, depending on the brand and province.

"It hurts the wallet, because it costs $400, $500 a month," Lincourt said.

Blunt statements, including "Tobacco smoke harms children" and "Cigarettes cause cancer," will be among the first six messages. A second set of six is expected to be printed on cigarettes in 2026. Organizations funded by tobacco companies have opposed the push toward stronger messaging, including the latest step.

The National Coalition Against Contraband Tobacco warned in June that cheaper, colourful black-market packs free of health warnings — federal rules ban packaging that includes brand colours or trademarks — attract young smokers and funnel more money to organized crime.

Much of the coalition's funding comes from the Canadian Tobacco Manufacturers Council, made up of three of the biggest cigarette companies active in Canada: Rothmans, Benson & Hedges Inc., Imperial Tobacco Canada and JTI-Macdonald Corp.

While big tax hikes or outright sales bans would indeed benefit the black market, gradual price boosts and more strident messaging can bring down smoking rates, Cunningham said.

"The only real reason that they can oppose something is because it's going to have a reduction in sales — and that is exactly the point," he said of the manufacturers.

The Canadian Cancer Society and other advocacy groups are calling for a comprehensive strategy of beefed-up taxation, legislation and programming to bring down smoking rates — Health Canada's goal is less than five per cent of the 15-plus population by 2035 versus 13 per cent as of 2020. Price promotions and flavoured products — allowed in some provinces — should be banned, Cunningham said.

In May, the Canadian Cancer Society, the Canadian Lung Association and the Heart and Stroke Foundation published an open letter to premiers of all 10 provinces saying they should push for efforts to reduce smoking during settlement negotiations with three major tobacco companies that they sued years ago to recoup health-care costs.

Provinces are collectively seeking $500 billion in damages, and the three advocacy groups said at least 10 per cent of the money from a settlement should go toward smoking cessation efforts.

This report by The Canadian Press was first published July 31, 2023.

— With files from Camille Bains in Vancouver

 

Canada turns to Nuclear power after 30-year pause to meet demand surge

Curtis Heinzl, Bloomberg News

The wet storage area for spent fuel bundles is seen at the Darlington Nuclear generating station 

in Bowmanville, Ontario, Canada, on Friday, April 1, 2016. , James MacDonald/Bloomberg

Nuclear energy is gaining significant momentum in Ontario, with new plans to expand an existing plant to become the world’s largest and a pledge to add three small modular reactors to a site where another is already being built.

The news marks a shift for an industry that has been stalled for decades amid fears about safety and cost overruns. It’s also seen as a critical step in modernizing an aging power grid that needs to add capacity without boosting already-high electricity costs, or threatening emissions goals.

The 2011 Fukushima Daiichi meltdown — the worst disaster since Chernobyl — slammed the global brakes on nuclear power plans. The Vogtle debacle in the US also provided grist for nuclear’s opponents, in the form of years-long delays and a price tag US$16 billion over budget.

Still, Ontario is charging ahead. The newly announced expansion at the Bruce Power facility marks the first large-scale nuclear build in Canada in over three decades, suggesting nuclear policy may finally be becoming unstuck. The province is home to all but one of the country’s 19 nuclear reactors, most of which were built from the 1960s to 1980s, during which time the Candu reactor became a global favorite.

“We are returning to our nuclear roots, and it couldn’t happen at a more important time,” said John Gorman, president of the Canadian Nuclear Association. As global demand for clean energy soars, Canada is once again poised to be a supplier of nuclear reactors domestically and internationally, he said.

By 2050, Ontario will need to spend about $400 billion (US$303 billion) to double its generating capacity to 88.4 gigawatts, according to the agency that runs the province’s electric grid, as drivers switch to electric vehicles and homes and businesses gradually move away from fossil fuels. Canada’s largest province is also seeing rapid population growth due to immigration. 

Thanks to existing nuclear, hydroelectric and wind power, Ontario’s grid is already 90 per cent clean. But growing demand could make that final 10 per cent the hardest to reach. Nuclear projects take many years to finish, and with all three of Ontario’s nuclear sites due for refurbishment this decade, the province will see a temporary cut to generating capacity. While construction is underway, the province plans to backstop supply with more natural gas.

DUMPING POWER

Once complete, the nuclear projects will reduce the province’s reliance on natural gas. They will also lessen the need to use wind and solar power to meet base-load demand — the minimum level of power needed from an electrical grid at any time — which contributes to a costly mismatch between supply and demand.

Electricity demand typically ramps up in the morning, peaks late afternoon, and tapers off at night. But supply from intermittent renewables like wind and solar is weather-dependent, and therefore less reliable at meeting the demand of the hour. Sometimes intermittent sources generate less power than is needed, and sometimes more — in which case operators may need to pause generation at certain plants to avoid overloading the system.

“At night, wind fights with nuclear and hydroelectric. During the day, wind and solar fight each other for the peak. So something has to be curtailed,” said Paul Acchione, a longtime engineer who co-authored a report on electricity price projections for the Ontario Society of Professional Engineers.

Hydroelectric power is usually first to be curtailed because its production carries a water rental tax, Acchione said. “If you put too much wind and solar on the Ontario grid, you end up dumping water into Niagara Falls.”

While intermittent renewables produce the cheapest electricity of any source, they aren’t yet reliable enough to replace natural gas, which is why the latter is still the backstop during times of peak demand and grid outages.

“Wind and solar are really, really cheap sources of power, but you need to be concerned with addressing their intermittency,” said Jason Dion, senior research director of the Canadian Climate Institute. “The challenge grows as their share of overall generation grows.” 

That’s where advancements in energy storage come in, allowing excess power generated in periods of low demand to be saved for peak times.

Storage currently covers only about 0.5 per cent of Ontario’s total generating capacity, but the province will grow its battery capacity 24-fold in the next three years, according to a July report by the energy ministry. The government also has future plans to add more pumped storage hydropower, a longer-duration storage option that moves water uphill to be run through a turbine later on.

CONTAINING COSTS

Acchione’s group modeled eight different scenarios for creating a net zero electricity supply in 2035, the year by which the Canadian government has pledged to have an emissions-free grid.

The simulation found expanding both nuclear capacity and long-term electricity storage is the best way to keep rates as low as possible. In the most optimal scenario, nuclear and hydroelectric power would meet base-load demand, while intermittent sources propped up by pumped storage would kick in during peak hours — resulting in a 10 per cent rise in electricity costs. That’s about the same as residents could expect if the province simply expanded its 2021 energy mix, without the added carbon emissions.

The two new projects at the Bruce and Darlington nuclear generating stations will add 6,000 additional megawatts of capacity to the grid once complete. Ontario can achieve Canada’s net zero electricity goal as long as they arrive on schedule, and assuming demand projections are accurate, Acchione said.

“The energy planners here in Ontario are starting to appreciate the various moving parts that play into the design of an energy supply mix,” he said. “It’s a good announcement. It’s a good start.”

Canadian drought conditions could force ranchers to sell their cattle

Iva Poshnjari, BNN Bloomberg

Cattle ranchers in parts of Western Canada are battling with drought conditions that might set them back years, the Canadian Cattle Association is warning. 

As of June, 83 per cent of the four westernmost Canadian provinces – Manitoba, Saskatchewan, Alberta, and British Columbia -- were abnormally dry and experiencing moderate to severe drought conditions, according to Agriculture Canada. 
 
These conditions make it challenging for cattle farmers to maintain their livestock and keep business operations going, Tyler Fulton, vice president of the Canadian Cattle Association, told BNN Bloomberg on Tuesday. 
 
As significant parts of Western Canada continue to experience serve drought conditions, some ranchers will have to sell their calves or cows in order to reduce financial strain, he explained.  
 
“What will happen is that some of those animals will go market, will go to slaughter, and that will impact their (the farmers’) economic viability going into future years,” he said. 
 
The drought has left ranchers between a rock and a hard place, Fulton added. 
 
“They’re dealing with several years of drought conditions, which means their pastures have deteriorated so they’re not producing anything. Their winter feed production is next to nothing simply because we rely on moisture to produce those crops,” he explained. 
 
At this point, it will come down to planning, he added. 
 
“There are pockets that are in a really tough time,” Fulton said.