Unifor president demands SNC-Lavalin reinstate fired union head

Christopher Reynolds, The Canadian Press

The head of Canada's largest private sector union is calling out SNC-Lavalin for firing the head of a separate union that represents 900 of its engineers, scientists and technicians.

In a release Tuesday, Unifor national president Lana Payne said SNC should reinstate Mark Chudak, who led the Society of Professional Engineers and Associates (SPEA) until he and another staffer at the engineering firm's Candu Energy Inc. subsidiary were dismissed last month over allegations of sharing confidential information with an outside organization.

Payne said the move marked "an alarming signal of anti-union behaviour" at the SNC.

"Workers have the right to organize and advocate for their rights without fear of retaliation. This company must understand the severity of their action and the impact it has on labour relations and employee morale," she said.

The statement comes after a filing by SPEA to the Canada Industrial Relations Board earlier this year that claimed SNC managers were surveilling emails between union staff and employees at the Candu nuclear division — a process the company has acknowledged.

In an interview Friday, SNC chief executive Ian Edwards said the employees in question, who initially had been placed on paid administrative leave, had violated policies around information security.

"It's serious in any business, but it's pretty serious in the nuclear business. So we were almost without choice," Edwards said.

He also acknowledged potential fallout from the terminations: "That obviously isn't helpful to the relationship with SPEA."

Edwards said unions are key to project delivery, "and SPEA is no different, and I really hope we get back to a level of respect on both sides."

He noted the company had hired a new president of Candu, Gary Rose, who has worked with unions in his previous executive posts at Ontario Power Generation.

Rose replaced Bill Fox, who was helming Candu when it mandated all employees return to the workplace with one business day's notice in June 2022.

SPEA said that order amounted to a negotiating tactic amid a rotating strike launched the previous month at Ontario's Darlington nuclear plant, which Candu is refurbishing.

In a copy of the memo from June 2, 2022, obtained by The Canadian Press, Fox reminded workers that a hybrid work model proposed to start the previous September was "on the table," meaning that the abruptly announced "full-time in-office working policy could change when bargaining concludes."

Alleging bad-faith bargaining, SPEA filed a complaint with the labour board.

SNC said in a statement at the time the company hoped to reach a "fair, equitable and competitive agreement" with the Candu workers. The job action ended days later with an agreement on June 14, 2022.

Meanwhile, the emails between union staff and union members at Candu were found out due to an automatic email reply in late 2021.

"It appears that private emails between union members and SPEA staff were being automatically forwarded to (SNC) Labour Relations. This was only discovered because of the 'out of office' feature," the union stated in a filing to the industrial relations board.

The accusation was part of a pair of unfair labour practice complaints to the board, which are ongoing.

SNC-Lavalin told The Canadian Press it monitored worker emails between 2019 and early 2022 as part of an internal audit "focusing on the transfer of confidential company information and the removal of security identifiers relating to emails sent externally," spokesman Harold Fortin said in an emailed statement in March.

Michelle Johnston, president of the Society for United Professionals, which represents more than 9,000 engineers, scientists and lawyers in Ontario, said projects like the reactor refurbishment at the Darlington Nuclear Generating Station demand "huge money and unforgiving schedules."

"Labour peace, in my opinion, is a precondition for success," she said in an interview. "I'd say if the labour relations that SNC are toxic, we've got to see that change."

She pointed to Gary Rose of Candu as the person to help spearhead it.

"Gary knows what good, respectful labor relations look like, and he knows how to conduct himself to achieve them," she said. "I have real, sincere hope."

This report by The Canadian Press was first published Aug. 8, 2023.

All news in Canada will be removed from Facebook, Instagram within weeks: Meta

Mickey Djuric, The Canadian Press

Discovering news articles and videos on Facebook and Instagram will soon become a relic of the past, as Meta announced it is officially ending news availability in Canada.

Meta said Tuesday that within a few weeks, it will remove news for all Canadian users of its popular Facebook and Instagram platforms. 

In June, the company started running a test that limited news for up to five per cent of users, but now it says it is moving out of the testing phase. 

"In order to provide clarity to the millions of Canadians and businesses who use our platforms, we are announcing today that we have begun the process of ending news availability permanently in Canada," said Rachel Curran, head of public policy for Meta Canada. Curran previously served as a policy adviser for former prime minister Stephen Harper. 

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That means Canadians will no longer be able to share or view news articles and other content posted by publishers and broadcasters, including international outlets. 

News links to articles, reels — which are short-form videos — or stories, which are photos and videos that disappear after 24 hours, are also expected to be affected by the block. 

People outside of Canada will not see a change. 

Paul Deegan, president of News Media Canada, said this "intemperate" action will harm user experience and devalue the Facebook platform. 

"Without access to real fact-based news created by real journalists, Facebook will become far less attractive to users and advertisers," Deegan said in a statement. "We expect more and more advertisers and their agencies will begin pulling advertising from the platform in response to this unilateral, undemocratic, and unreasonable move."

The federal government and some companies have already retaliated by ending advertising with Meta. 

Meta said it is defining news content based on how it's described in the Liberal government's Online News Act, which became law earlier this summer. 

It says the move to block news is a response to the bill, which requires tech giants to enter into agreements that compensate Canadian news outlets for content shared or otherwise repurposed on their platforms. 

"For many months, we have been transparent about our concerns with the Online News Act. It is based on the incorrect premise that Meta benefits unfairly from news content shared on our platforms, when the reverse is actually true," Curran said.

"News outlets voluntarily share content on Facebook and Instagram to expand their audiences and help their bottom line. In contrast, we know the people using our platforms don't come to us for news."

Ottawa has said the law creates a level playing field between online advertising giants and the shrinking news industry. 

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The federal government has said that since 2008, close to 500 media outlets in 335 communities across Canada have closed, with more than 20,000 journalists losing their job, while Google and Meta continue to bring in billions in advertising dollars. 

"Google and Facebook earn 80 per cent of all digital advertising revenue in Canada. Meanwhile, hundreds of newsrooms have closed," said Canadian Heritage Minister Pascale St-Onge in a statement. 

"A free and independent press is fundamental to our democracy, and Canadians expect tech giants to follow the law in our country."

In its own statement, CBC/Radio-Canada said Meta's move means people who have come to rely on the platforms for news are now "left with only unverified sources in their feeds."

The public broadcaster said the company's decision is "irresponsible and an abuse of their market power," adding that it and other Canadian media organizations are urging Meta to come to the negotiating table and compensate them for news content.

The Online News Act will come into effect by the end of the year, as the Liberal government develops regulations — a process Meta has said it is not interested in being a part of. 

"In the future, we hope the Canadian government will recognize the value we already provide the news industry and consider a policy response that upholds the principles of a free and open internet, champions diversity and innovation and reflects the interests of the entire Canadian media landscape," Curran said. 

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

Consumer and business insolvencies rising under weight of higher interest rates

The Canadian Press

The Office of the Superintendent of Bankruptcy says both consumer and business insolvencies rose significantly in the second quarter amid heightened interest rates.

The agency says the 31,224 consumer insolvencies in the April to June period were up 23.5 per cent compared with the same period last year, while business insolvencies rose 36.9 per cent to 1,090. 

The agency says that for June, total insolvencies were up 19.6 per cent compared with June 2022, but down 2.8 per cent from May.  

Total insolvencies for the 12-month period ending June 30 were 116,653, up 23.2 per cent from the previous period. 

The Canadian Association of Insolvency and Restructuring Professionals says interest rate hikes are increasing stress on businesses as they face higher costs and weakening consumer demand.

The association says consumer insolvencies are rising steadily and reaching levels comparable to pre-pandemic, and it expects they will surpass pre-pandemic averages later this year.

Most Canadian households need two incomes to support their debt: Economist 6:35

 

This report by The Canadian Press was first published August 3, 2023.

Systemic fair access violations found in Ontario auto insurance: Regulator

Ian Bickis, The Canadian Press

Ontario auto insurers have been involved in intentional, industry-wide violations of rules around fair access to coverage, the sector's regulator said Thursday.

The Financial Services Regulatory Authority of Ontario (FSRA) says in a report that it uncovered practices that made it harder for certain types of consumers — those who had prior claims, who weren't also buying property coverage, who lived in some municipalities, and who had less than a year of previous auto insurance coverage in Canada — to get insurance quotes.

It found insurers at times slowed quotes, refused to offer coverage for those who met their approved underwriting rules, or simply didn't respond to consumers.

"Insurers chose to engage in non-transparent and illegal practices that made it more difficult for certain types of consumers to get auto insurance quotes," it said in the report.

The FSRA says the practices led to "consumer harms, unfair competition, and diminished market health" and go against the "take-all-comers" rules that require insurers to accept business from all consumers who meet their government-approved underwriting rules.

The issue, which the regulator has worked directly with the industry to resolve, was widespread and long-standing, said FSRA chief executive Mark White.

“We've identified that there were embedded non-transparent practices within all the 12 major insurers in Ontario, which meant that consumers couldn't be confident that they were actually getting the best price available.”

With more than 10 million drivers renewing policies annually, the potential harms of the practices are significant, even if difficult to estimate, he said.

“Very difficult to quantify the financial harm to consumers, but the number of consumers that didn't get a quote that was due to them, basically an offer to insure, is very large.”

The issue of screening out some customers also extended to aggregator websites, where companies set rules around approval that weren't necessarily OK'd by the regulator. 

White said insurers largely denied the problem at first, but that through further investigation including mystery shoppers and consultations, along with working with insurers to self-identify issues, the regulator was able to establish the existence of the practices. 

Rather than work through extended enforcement actions that could have tied up the process for years, the regulator chose to work with insurers to resolve the issue, he said. 

While most took action, the FSRA found two Aviva Group subsidiaries continued with non-compliant actions. 

The two subsidiaries, Aviva Insurance Company of Canada and S & Y Insurance, later acknowledged non-compliance and agreed to an administrative penalty totalling $600,000 for the four sanctions.

The maximum penalty per sanction is $200,000, a limit that also played some role in the choice to work with insurers, said White.

"We consciously chose that we needed to have the market function better, so consumers can be ensured that they can get the lowest price available, rather than tying it up in enforcement actions with fairly limited administrative penalties."

He said the combination of the regulator making senior leadership at the insurers aware of the issue, along with increased enforcement tools such as a whistleblower program and strengthened laws, means consumers can be "very confident" that the pre-existing issues have been resolved. 

This report by The Canadian Press was first published Aug. 3, 2023.

Alberta announces six-month pause on renewable energy projects, citing rural concerns

Bob Weber, The Canadian Press

Alberta's United Conservative government is pausing all approvals of large renewable energy projects in response to what it says are rural and environmental concerns.

In a statement Thursday, the government said the Alberta Utilities Commission is to institute a six-month moratorium on approving all wind and solar power projects greater than one megawatt over issues of development on agricultural land, effect on scenery, reclamation security and system reliability.

"We are proud of our leadership in responsible renewable energy development and we are committed to its continued growth," said a statement from Nathan Neudorf, minister of affordability and utilities.

"This approach will provide future renewable investments with the certainty and clarity required for long-term development."

With few regulatory barriers to entry and abundant wind and sunshine, Alberta has been a leader in renewable energy development in Canada. In 2022, 17 per cent of the province's power came from wind and solar — exceeding the province's 15 per cent goal.

There are another 15 renewable energy projects before the Alberta Utilities Commission, representing hundreds of millions of dollars in investment.

The Business Renewable Centre, a group that links buyers and producers of renewable energy, said Alberta was on track to see $3.7 billion worth of renewables construction by 2023, creating more than 4,500 jobs.

Neudorf said concern over that expansion is being expressed at commission hearings. The commission has written a letter to his office to that effect, he said.  

That growth is part of what's behind Thursday's announcement, said University of Alberta energy economist Andrew Leach. 

"The reason that this is happening is because renewable energy has taken off in Alberta. The power grid is wide open for investment," Leach said.

"This is just how fast the energy transition is moving. And because Alberta has been open to it, it's almost gone faster than anybody could have expected."

He said projection of solar development tripled just between May and June, from 2,000 to 6,000 megawatts.

"The grid operator really (was) not prepared for this rush."

Paul McLaughlin of Rural Municipalities Alberta is welcoming the move, saying his group wants to see an approval process that takes local concerns into account. 

"Rural municipalities cover roughly 85 per cent of Alberta’s land and their voices must be included in the approval process for all renewable energy projects," he said in the government press release. "We look forward to working with the Government of Alberta to create an approval process that balances provincial and local perspectives."

Environmental groups were quick to condemn the move.

The Canadian Climate Institute said on social media that the moratorium will hurt business.

"Robust reclamation should be required for all energy generation, but pausing approvals is a disruptive market intervention that will create uncertainty for businesses and discourage (investment) when clean electricity is quickly becoming a competitive necessity," it said.

"This moratorium on renewable energy is bad for business, bad for the environment and bad for Albertans," Allen Braude of Environmental Defence said in a release.

"Scaling up renewable energy is essential to addressing the climate crisis. Stopping now makes no sense." 

Over the next six months, the commission is to undertake an inquiry that will include reviewing the use of agricultural and public land for wind and solar projects, land reclamation, and the role of municipal governments in land selection for project development and review.

Leach said wind and solar farms create land-use issues but the government's approach to the industry is inconsistent with its treatment of the oil and gas industry, which is regulated on a case-by-case, project-by-project basis. 

"No one can imagine in the middle of an oilsands boom everyone saying what we need is a six-month moratorium on new approvals until we figure out how we're going to manage cumulative effects."

He pointed out that while the government has stopped renewable energy partly over concerns about how such sites can be cleaned up, it faces billions of dollars in environmental liabilities from the oil and gas industry for which it has little security and no real cleanup plan.

"The irony is off the charts," Leach said. 

This report by The Canadian Press was first published Aug. 3, 2023.

 

Bombardier CEO on latest earnings, the jet market and Canada defence needs

Holly McKenzie-Sutter, BNN Bloomberg

The CEO of Bombardier said he’s happy with the company’s latest quarterly results and its current path to achieve its goals, thanks to “solid” market conditions that he argues have set the Canadian plane maker up for success.

“We are extremely pleased,” Éric Martel told BNN Bloomberg in a Wednesday television interview. “We had an excellent quarter.”

He made the comments Wednesday after the company reported second-quarter 2023 revenues up eight per cent year-over-year, at $1.7 billion, after delivering 29 planes. Net loss, meanwhile, was $35 million.

Martel said the market has changed but the conditions are right for Bombardier to maintain its target book-to-bill, or ratio of orders to billed deliveries, of one-to-one.

“The market remains extremely solid. It's a different market than what it was a year ago, but it's a market that allows us to sell our planes and maintain the backlog we created over the last two years,” he said. “That's our target.”

FLEET OPERATOR GROWTH

Martel noted that Bombardier has benefited from the good fortunes of fleet operators, which allow partial ownership of jets or other purchase options.

Such companies have been growing in recent years, and Martel explained that the trend puts the jet maker in a good position.

“For Bombardier, because we're dominating that segment of the market with the fleet operators, it is great news,” he said. “Not only (do) these guys need capacity to grow, but they also need to replace some of the airplanes, which puts us in a very solid position.”

DEFENCE CONTRACT TALKS

Martel also addressed the ongoing discussion about the need for Canada to replace aging military aircrafts.

The federal government has said it is weighing options for the multi-billion dollar contract.

Martel said he is “100 per cent sure” his company can deliver on Canada’s military plane needs with made-in-Canada products, noting that Bombardier will need to update new Defence Minister Bill Blair on the topic, after he took on the file last week.

“We would love as proud Canadians to be the ones replacing, with a state-of-the-art new product, the airplanes that are going to be defending our country in the future,” Martel said.

“The only thing we're asking here is for a request for a proposal, we're not asking to get a sole-source. We believe a fair process for the taxpayer will be the right thing to do and Bombardier will definitely participate in that process.”

With files from The Canadian Press

Nutrien sees Trinidad fertilizer plant’s output squeezed for longer

Tarso Veloso, Bloomberg News

Ammonia output at one of the world’s largest production facilities will be curbed for the foreseeable future due to Trinidad & Tobago’s natural gas supply constraints, according to top fertilizer maker Nutrien Ltd.

Production capacity for the key crop nutrient ingredient at the island nation’s Point Lisas facility averaged only 70 per cent in the second quarter, Nutrien Chief Executive Officer Ken Seitz said in a Thursday phone interview. That’s down from 80 per cent in the previous quarter.

“As we look at gas availability in the island, we have the view that we are not going to be returning to 100 per cent of capacity in Trinidad anytime soon,” Seitz said, citing ongoing talks with state-owned supplier National Gas Co. The Canadian company’s new mid-cycle assumptions expects the plant to produce at around 80 per cent capacity.

Over the last decade, the Trinidad ammonia utilization ran at 85 per cent, said Alexis Maxwell, a Bloomberg Intelligence analyst. The Trinidad complex, which processes natural gas into ammonia at four plants, supplies customers in the US, Caribbean and Latin America. The plants produce about a third of Nutrien’s ammonia capacity.

Nutrien announces strategic actions to cut 

costs amid economic headwinds

Rosa Saba, The Canadian Press

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Nutrien Ltd. is indefinitely pausing its potash production ramp-up and suspending work on its Geismar clean ammonia project after a period of "unprecedented volatility" in fertilizer markets, said chief executive Ken Seitz on Thursday.

Persistent uncertainty in global crop input markets over the past 18 months have been a challenge, and helped lead to significantly lower net earnings for the company in the second quarter of 2023, but there are still positive signs ahead, he said on an analyst call.

"We are encouraged by the continued improvement in demand as the year has progressed. This is most evident in North America, where we had a strong spring season, relative fertilizer price stability and a significant reduction in channel inventories," said Seitz.

However, he noted demand has been slower in certain offshore fertilizer markets.

The strategic action to pull back on infrastructure investments reflect the company's commitment to disciplined capital allocation and enhancing free cash flow, Seitz said.  

Nutrien reported second-quarter net earnings of US$448 million, down from US$3.6 billion a year earlier, and revised its full-year guidance lower amid economic pressures including lower potash prices. 

Sales were US$11.7 billion, down from US$14.5 billion during the same quarter last year, the company said in a press release Wednesday. Diluted net earnings per share were 89 cents US, down from US$6.51.

The lower earnings are mainly due to lower selling prices, weaker offshore potash sales volumes, and lower retail gross margin for crop nutrients and crop protection products, Nutrien said. It added that net earnings were also hit by non-cash impairments of US$465 million and US$233 million.

Nutrien is undertaking other cost-cutting measures in addition to pausing its potash ramp-up and suspending work on the ammonia project. These include reducing expenditures in both operations and in smaller retail investment projects. 

The company has also taken targeted actions this year to reduce headcount amid wage inflation, said Jeff Tarsi, executive vice-president and president of global retail, on the conference call. 

"We've been very deliberate about controlling our controllables. And we're taking out discretionary costs across our network," Tarsi said. 

Canadian potash exports will likely be constrained in the third quarter by logistical challenges related to the B.C. ports strike, said Seitz, as well as an outage at Canpotex’s Portland terminal.

"It could take several more weeks until the backlog is cleared and the supply chain returns to normal," he said, adding this resulted in a lower estimate for global potash shipments in 2023, to a range of 63 to 65 million tonnes. 

Nutrien lowered its full-year guidance due to weaker potash prices, lower projected potash exports, and other factors. 

It now expects full-year adjusted earnings before interest, taxes, depreciation and amortization to be between US$5.5 and US$6.7 billion. Guidance last quarter was between US$6.5 and US$8.0 billion. 

Shares in the company closed down more than four per cent Thursday at $86.24.

Bondholders sue Canadian Pacific, alleging a missed deadline

Erin Hudson and Amelia Pollard, Bloomberg News

Holders of Canadian Pacific Railway Co. bonds sued the railroad company, demanding it repay their debt early and at a premium after they say the company missed a deadline tied to its acquisition of Kansas City Southern. 

The bonds in question — US$1 billion of Canadian Pacific notes due 2041 —  included a provision requiring the company to repay early if it failed to get federal approval to buy Kansas City Southern by March 25. 

U.S. authorities said on March 15 that they had approved the acquisition, but the decision didn’t take effect until April 14 — a lag that bondholders argue trips their repayment provision.

Canadian Pacific reiterated a previous statement, that the regulatory approval it received met the terms of its bondholder agreements. The company isn’t obligated to redeem the bonds that are subject to the repayment provision, the earlier statement said. 

A separate bond, US$1.4 billion of notes due 2031, also include the repayment provision. A group of holders of both the 2041 and 2031 notes tapped law firm Paul Hastings to enforce early repayment of their US$2.4 billion in total holdings, Bloomberg previously reported. Holders of a majority of the 2031 notes could still opt to join the lawsuit, according to people familiar with the matter who asked not to be identified.

A representative for the law firm wasn’t immediately available for comment. 

If the noteholders are successful, they stand to earn big gains. Canadian Pacific’s notes with a 2.45 per cent coupon due 2031 traded at around 86 cents on the dollar on Wednesday, and its 3 per cent notes due 2041 traded around 80 cents. The company would have to buy back the securities at 101 cents on the dollar plus accrued, unpaid interest.     

CHANGING TRUSTEE

The company can reap significant benefits from not redeeming the bonds, because rates have risen so much since the investment-grade securities were originally sold 2021, according to the suit. The approval process was delayed by Canadian Pacific having filed inconsistent data with regulators, according to the suit.   

Wilmington Savings Fund Society, the trustee for Canadian Pacific’s notes due 2041, filed the suit on Wednesday in a New York federal court. The group of creditors that directed the trustee to sue holds more than half of the 2041 notes, according to the complaint. A representative for Wilmington Savings declined to comment. 

The bondholders appointed Wilmington Savings as their trustee after removing the prior trustee, Computershare Trust Company, which had informed them it was not going to assert that the repayment provision had been triggered, the court document shows. A representative for Computershare Trust wasn’t immediately available for comment. 

Canadian Pacific acquired Kansas City Southern for more than US$30 billion in December 2021. It funded the deal in part by selling US$8.45 billion in investment grade bonds, denominated in both Canadian and U.S. dollars. 

The sale featured US$6.7 billion of U.S. dollar bonds in five parts, including the 2031 and 2041 notes.

The case is Wilmington Savings Fund Society, FSB v. Canadian Pacific Railway Limited et al, 23-cv-06787, U.S. District Court, Southern District of New York (Foley Square).