US Seeks Strategic Dialogue With Russia

M K Bhadrakumar | 31 Oct 2023

• 
  
• 
  

Against the backdrop of the gathering storms in West Asia, the Biden Administration probably seeks to calm the nerves.

Almost four weeks into Hamas’ attack on Israel, Russia is in no hurry to exploit the Joe Biden administration’s quandary over the collapse of West Asia’s security. The Western media was unanimous that Russia was waiting in the wings to seize the opportunity once the US took its eye off the ball in Ukraine. However, no such thing happened. 

The Ukraine war is on autopilot. The compass has been set, the die is cast and the calculus is holding steady with regard to the strategic objectives set by President Vladimir Putin in February last year. Russia senses that it has gained the upper hand in the war and that is irreversible. 

Ukraine’s counteroffensive has failed and the fighting is presently restricted to two sectors of the frontline, as Russian forces strengthen the security of the Donetsk region and seek to regain control of territories up north in the borderlands of Donbass and Kharkov region from where they retreated for tactical reasons last September and October.

Yet, Moscow has not begun its grand offensive, as many had predicted. One plausible explanation is that Moscow is watching the maelstrom sweeping through West Asia. Moscow is particularly sensitive about any spillover into Syria. 

With an eye on the formidable US naval build-up in Eastern Mediterranean with the deployment of two aircraft carrier groups, President Vladimir Putin has publicised that Russian jets equipped with hypersonic Kinzhal missiles are roaming the skies above the Black Sea, which can strike targets 1,000 km away at Mach 9 speed, which no existing missile defence system can intercept. Suffice to say, the war in Ukraine remains attritional. 

Curiously, Russia conducted a simulated nuclear strike in a drill on Wednesday overseen by Putin, hours after the Russian parliament voted to rescind the country’s ratification of the global comprehensive nuclear test ban treaty (CTBT). The drill needs to be seen in the broader context of global strategic stability.

A Kremlin statement said, “The purpose of the training exercise was to check the level of preparedness of military command bodies, as well as the skill of the leadership and operational personnel in managing the troops (forces) under their command.” Everything, however, adds up in these extraordinary times. 

At its most obvious level, the Palestine-Israel conflict is a manifestation of the growing imbalance in the existing system of international relations. New wars are emerging; long standing conflicts are mutating (e.g., Nagorno-Karabakh). Last week, Pakistan bracketed Palestine and Kashmir as the UN’s unfinished business in the post-colonial era. North Korea and Iran are flash points that have no military solution. 

In the months ahead, without doubt, Washington will continue to provide Israel with military and diplomatic support but an extended Israeli operation lasting months in Gaza will mean dispersal of US resources that might be needed in other theatres. The conflict in Gaza underscores the imperative for a rethink in the US’ notions of global hegemony. The fact remains that the US, despite its self-proclaimed status as the “Indispensable Nation” (Madeleine Albright) and the guarantor of “rules-based order,” failed to prevent the latest eruption of conflict in West Asia. 

Arguably, therefore, the latest US proposal for a systematic resumption of strategic dialogue with Russia can be seen as a sign of positive thinking. Unsurprisingly, Moscow has displayed a studied indifference to the US proposal. But that needn’t be taken as the last word. Historically, Soviet-American strategic dialogue brought on board into the agenda all major issues and most minor issues affecting international security. 

The big question, therefore, is the timing of the US proposal. Against the backdrop of the gathering storms in West Asia, the Biden Administration probably seeks to calm the nerves by proposing talks with Russia on global strategic balance, since the guardrails in arms control no longer exist. This is one thing. 

At any rate, Russia’s “neutrality” in a West Asian conflict could also be a consideration. Equally, Western leaderships understand that the war against Russia is practically lost — although they will not admit it publicly — and engagement with Russia is needed.   

Again, although the US has provided Israel with significant military and diplomatic support and keep influencing the latter not to escalate the conflict, there are variables in the situation and any big conflagration in West Asia will require a massive concentration of material and financial resources that are limited even for a superpower, since there are other unresolved problems in the world, too.

The breakdown of trust in the Russian-American ties hurts the US interests. Fundamentally, it must also be understood that what Moscow seeks even today after nearly 20 months of battling NATO and the US in Ukraine’s killing fields is a sustained engagement with Washington and a willingness to accommodate mutual interests. 

On its part, Russia is conducting itself as a responsible power vis-a-vis the crisis in Gaza. There is no shred of evidence to show that Russia has acted as a “spoiler”. On the contrary, Moscow has been projecting its credentials as a potential peacemaker who enjoys good relations with all key players — Israel, Hamas, Iran and other regional states alike. 

In fact, President Biden’s recent remarks on the Gaza situation bring the US position rather close to Russia’s. Biden read out the following from a prepared text at a joint press conference with Prime Minister Anthony Albanese of Australia: 

“Israel has the right and, I would add, responsibility to respond to the slaughter of their people.  And we will ensure Israel has what it needs to defend itself against these terrorists.  That’s a guarantee… 

“But that does not lessen the need for — to operate and align with the laws of war for the Israeli — it has to do everything in its power — Israel has to do everything in its power, as difficult as it is, to protect innocent civilians.  And it’s difficult. I also want to take a moment to look ahead toward the future that we seek. 

“Israelis and Palestinians equally deserve to live side by side in safety, dignity, and peace. And there’s no going back to the status quo as it stood on October the 6th. That means ensuring Hamas can no longer terrorise Israel and use Palestinian civilians as human shields.

“It also means that when this crisis is over, there has to be a vision of what comes next. And in our view, it has to be a two-state solution.” 

Putin couldn’t have put this across differently. There is a sense of expectation in Moscow that in the emergent conditions in regional security, the US and its allies will “reconsider their notions of defeating Russia in the Ukraine conflict at any cost” — as an establishment think tanker wrote in the Kremlin-funded RT last week. 

Trust is lacking, he concluded, “compromises without the full consideration of Russian interests” are difficult to reach, but “a pivotal stage in the (world) order … is taking shape before our eyes.”  

US Diplomacy Losing Traction in West Asia

M.K. Bhadrakumar | 28 Oct 2023

• 
  
• 
  

Isolating Iran is no longer possible.

Russia’s Dy Foreign Minister & Special Envoy Mikhail Bogdanov (C) held talks with Iran’s Dy Foreign Minister Ali Bagheri Kani and Hamas’ head of International Relations Mousa Marzouk, Moscow, Oct. 26, 2023 

The US President Joe Biden is convinced that one of the reasons why Hamas launched the attack on Israel was because of the announcement during the G20 Summit in New Delhi on the India-Middle East-Europe Economic Corridor . But he also admitted that this reading was based purely on his instinct and he did not have any proof for it. 

Biden’s motivation in saying so lies in the US’ desperate need to reclaim its leadership role in the Muslim West Asia. The two most compelling realities rejecting the American leadership are: one, a strong united regional solidarity cutting across sectarian divides to seek a settlement on Palestine, like at no time before, and, two, the Saudi-Iranian rapprochement. 

The latest developments involving Hamas and Israel undermined the US efforts to persuade Saudi Arabia to recognise Israel. No doubt, the Saudi stance on the Palestine problem has hardened. Biden reached out to Crown Prince Mohammed bin Salman on Tuesday in an attempt to create as much convergence as possible between Washington and Riyadh. 

But the White House readout shows that a critical mass remained elusive; even as the two leaders agreed on generalities, they couldn’t agree on the all-important specific issue of an urgent ceasefire between Israel and Hamas. 

This profound disagreement is also reflected in the UN Security Council where the United Arab Emirates supported the Russian draft resolution, which called for “an immediate, durable and fully respected humanitarian ceasefire”, but opposed the US draft resolution, which was evasive on ending the fighting and instead harped on Israel’s right to self-defence.  

A joint statement on Thursday signed by the Foreign Ministers of Egypt, Jordan, Bahrain, the UAE, Saudi Arabia, Oman, Qatar, Kuwait and Morocco called for an immediate ceasefire in the Gaza Strip. In an admonition to the US and Israel, the statement stated, “The right to self-defence by the United Nations Charter does not justify blatant violations of humanitarian and international law.” 

Looking ahead, the big question is about American intention. Is it muscle-flexing or a hidden plot to create facts on the ground that can be seized as casus belli to launch an offensive against Iran, which has been a longstanding project of the neoconservatives dominating the US foreign policy discourse? 

Biden declared at a press conference in the White House on Wednesday that he had warned Iran’s supreme leader Ayatollah Ali Khamenei that if Tehran continued to “move against” US forces in the region, Washington would respond. 

To quote Biden, “My warning to the Ayatollah was that if they continue to move against those troops, we will respond. And he should be prepared. It has nothing to do with Israel.” (Biden was referring to growing attacks on American bases in Iraq and Syria.) 

The political deputy at the Iranian president’s office, Mohammad Jamshidi has since countered Biden’s remark, saying, “The US messages were neither directed to the leader of the Islamic Revolution nor were they anything but requests from the Iranian side. If Biden thinks he has warned Iran, he should ask his team to show him the text of the messages.”

Hours later, when asked to clarify, the US National Security Council spokesman John Kirby parried, “There was a direct message relayed. That’s as far as I’m going to go.” Conceivably, the recent attacks by militant groups in Syria and Iraq pose a headache to Biden in domestic politics. Reportedly, some two dozen US servicemen have been injured and one military contractor killed so far. There are roughly 2,500 American troops in Iraq and some 900 in Syria. 

Possibly, Biden was grandstanding. That is not something unusual in US-Iran standoffs. But more likely, the US hopes to nudge Iran to rein in the free-wheeling militia groups in Syria and Iraq from exacerbating the situation. 

Iran is on the same page as China and Russia and the Arab States in calling for an immediate ceasefire so that conditions are available for diplomacy to meaningfully tackle the Palestine problem. They stand for a two-state solution. Ironically, the US also claims it supports a two-state solution. 

This is what Biden stated at a press conference in the White House yesterday, reading out of a prepared text: “Israel has the right and, I would add, responsibility to respond to the slaughter of their people.  And we will ensure Israel has what it needs to defend itself against these terrorists. That’s a guarantee… 

“But that does not lessen the need for — to operate and align with the laws of war for the Israeli — it has to do everything in its power — Israel has to do everything in its power, as difficult as it is, to protect innocent civilians …

“I also want to take a moment to look ahead toward the future that we seek. Israelis and Palestinians equally deserve to live side by side in safety, dignity, and peace.  And there’s no going back to the status quo as it stood on October the 6th …

“It also means that when this crisis is over, there has to be a vision of what comes next.  And in our view, it has to be a two-state solution. It means a concentrated effort from all the parties — Israelis, Palestinians, regional partners, global leaders — to put us on a path toward peace.” 

Do these words sound as if Biden is preparing for a war with Iran? For the first time, perhaps, there is a ray of hope that the US will no longer work around the Palestine problem. The bottom line, as the deliberations at the UN Security Council also testify, is that all responsible powers understand that West Asia continues to be the centre of gravity in world politics and a conflagration in the region could easily turn into a world war. And none of the big powers wants such an apocalyptic outcome. 

That said, while the US still has unrivalled power in West Asia, its influence has diminished, as new realities emerged:

• Israel has grown more powerful militarily and economically vis-a-vis Palestinians, but no longer enjoys regional dominance. 
• Saudi Arabia and the UAE, two dominant powers in West Asia, are increasingly asserting their own interests. 
• China, although a relatively new player, is no longer confining itself to economic diplomacy. 
• The US has lost the capacity to leverage the world oil market, as Russia works closely with Saudi Arabia within the ambit of OPEC+ to calibrate oil production level and prices. 
• Consequently, the petrodollar is weakening.  
• The Abraham Accords have been shelved practically. 
• The Arab-Israeli conflict has assumed new dimensions in recent years, thanks to the ascendance of the axis of resistance, which requires new postures and operational thinking on the part of the US. 
• Israeli politics has swung sharply to the extreme right. 
• The global environment is highly complicated; the peace process can no longer be under US mentorship. On Thursday, Russia hosted a trilateral meeting in Moscow with Iran’s deputy foreign minister and a Hamas delegation. Later, Russian Deputy Foreign Minister Mikhail Bogdanov, who is also Special Presidential Envoy for West Asia and Africa, announced that Palestinian leader Mahmoud Abbas “will soon arrive on an official visit” to Moscow for talks with Russian President Vladimir Putin.  

 

In an all-out war with Iran, the US will take heavy casualties and the state of Israel may face destruction. Indeed, Iran may opt for nuclear deterrent capability. It is a near-certainty that a US-Iran war will turn into a world war. Clearly, war is not an option. 

There is high risk, therefore, in an Israeli ground invasion of Gaza. If Israel gets bogged down in Gaza, which by no means cannot be ruled out, there is a high possibility that Hezbollah may open a second front. And that, in turn, can trigger a chain reaction that may spin out of control. Herein lies the danger if a ceasefire is not agreed upon early enough in the conflict.         

MK Bhadrakumar is a former diplomat. He was India’s ambassador to Uzbekistan and Turkey. The views are personal.

Courtesy: Indian Punchline

CPKC lowers earnings expectations due to 'economic headwinds,' port workers strike

The Canadian Press

Canadian Pacific Kansas City Ltd. has lowered its financial forecast for the year, citing the cost of weaker consumer demand and the B.C. port workers strike.

“No doubt a challenging quarter as we dealt with a softer demand environment," CEO Keith Creel told analysts on a conference call Wednesday.

“Certainly not the outcome we had planned, but it’s the prudent thing to do at this point.”

Creel highlighted "economic headwinds" and the 13-day job action in July that shut down the country's largest port. Both factors prompted the railway to predict flat to slightly positive adjusted diluted earnings this year versus last.

The revision marks a more pessimistic outlook than the one offered three months earlier, when the Calgary-based company projected adjusted diluted earnings would grow by mid-single digits in 2023.

It comes as consumers continue to reroute their spending toward services over products in a reversal of pandemic trends, with pressure from inflation and rising interest rates as an additional drag.

Meanwhile, the two-week strike — plus a brief wildcat job action — halted operations at most ports along the West Coast. In the first week alone, it depressed the number of containers hauled by Canadian railways to barely half the level reached during the same period in 2022, according to the American Railroad Association.

Creel also cited hurdles relating to Canadian Pacific's purchase of Kansas City Southern in April. The US$31-billion deal — the continent's first big rail merger in more than two decades — created the only railway stretching from Canada through to the U.S. and Mexico.

“In an industry with a history of merger-related service challenges ... we certainly have not been perfect," Creel said, noting integration of all 20,000 employees has proven tougher than expected.

Nonetheless, he stressed opportunities for "synergies," as well as big progress on performance metrics at the company's Mexican operation, where network speed has shot up by nearly a third since July 30.

Chief financial officer Nadeem Velani added that come January, "we're going to have double-digit EPS (earnings per share) growth in our sights."

Net income fell 12 per cent year over year last quarter. Revenues slumped four per cent as demand for container shipping, crude oil and forest products dropped, the latter due to a slowing housing market. A rebounding auto sector partly repaired the fiscal dent, with the industry's pandemic supply chain snarls in the rear-view mirror.

Operating expenses dipped slightly despite wage inflation and stricter work/rest rules for employees.

"Overall, inflation has been a challenge and it's been a headwind," Velani said.

Potash revenue also plummeted 22 per cent — despite heightened global demand — due to a major mechanical failure in April at the Canpotex bulk terminal in Portland, Ore. The operation is not expected to come back online until 2024, as CPKC works to divert fertilizer to other ports.

“Without the Portland terminal ... it’s been horribly challenging," said chief marketing officer John Brooks.

He said volume declines at the B.C. ports of Vancouver and Prince Rupert in July, which failed to recover in August and September, may well persist in the medium term.

"I just had my team visiting all the steamship carriers over in Asia and also in Europe, and they didn't paint a very bright picture," he said, adding that container arrivals in Canada and bound for the U.S. number far fewer than in previous years.

In the quarter ended Sept. 30, CPKC reported that revenues fell four per cent to $3.34 billion in its third quarter from the combined $3.39 billion that Canadian Pacific and Kansas City Southern yielded a year earlier.

CPKC said net income fell to $780 million from $891 million in the same period the year before.

Diluted earnings fell to 84 cents per share from 96 cents per share, below analyst expectations of more than 90 cents per share, according to financial data firm Refinitiv.

This report by The Canadian Press was first published Oct. 25, 2023.

Dentists decry being left in the dark about federal dental insurance plan

Laura Osman, The Canadian Press

A dentist works on a patient on Monday, July 26, 2021, in San Juan, Texas. 

THE CANADIAN PRESS/AP-Joel Martinez/The Monitor via AP

Canadian dentists are demanding details on Ottawa's soon-to-be announced federal dental insurance plan and how the federal government plans to preserve existing provincial and private coverage. 

Eleven provincial and territorial dental associations have written a joint letter to the federal health minister to express serious concerns about a lack of information when it comes to critical aspects of the new plan.

"We have no indication that we are being heard," the dental associations said in their letter, which was also sent to all members of Parliament this week.

They wrote that they worry the success of the new plan is being compromised "by a lack of meaningful consultation with the dentists we represent — those who will be expected to deliver on the government's promises."

The plan was born out of the Liberals' supply-and-confidence deal with the NDP last year, which calls for federal dental care coverage for middle- and low-income families. 

The new insurance program is expected to be announced before the end of the year, though claims may not be accepted until 2024. 

The spring budget promised $13 billion over the next five years to implement the national dental-care plan, which the federal government says will insure up to nine million people.

The government plans to begin with coverage for uninsured people under the age of 18, seniors and people with disabilities under a $90,000 annual family income threshold.

More-specific details about the new plan have yet to be released, and those details are important, the dental associations said.

"If we get the details wrong, there will be serious unintended consequences and access to oral health care in Canada will be undermined for generations," the letter stated. 

The health minister did not immediately respond to a request for comment, but has said he doesn't want to pre-empt the official announcement. 

The government did consult with dentists early on in the development of the program, said Dr. Brock Nicolucci, a practising dentist and chair of the board for the Ontario Dental Association. 

"But unfortunately, the past year and a bit, there's been crickets," he said. "We've been kept in the dark."

The dentists want to understand, in particular, how the government plans to prevent employers and private insurers from scaling back their coverage for low- and middle-income families and refer patients to the federal program instead.

They also want to know how the new program will co-ordinate with existing public coverage provided by the federal, provincial and municipal governments.

If people lose existing coverage it would seriously drive up the cost of the program, said Nicolucci.

Dentists also worry about a lack of available dental hygienists and assistants to meet the increased demand. 

In Ontario, the dental association says there is already a shortage of 5,500 hygienists and 3,400 dental assistants.

In their last federal budget, the Liberals set aside $250 million over three years to improve access to dental care, but the funding doesn't kick in until 2025. 

"We have this problem right now. It's current," Nicolucci said. "Dealing with it after the program is going to be released — that isn't sufficient."

This report by The Canadian Press was first published Oct. 26, 2023.

LIFE & TIMES OF THE 1%

Heather Reisman marks Indigo comeback with new store following leadership turmoil

Tara Deschamps, The Canadian Press

Strolling between rows of books and a seemingly endless array of other wares at Indigo Books and Music Inc.’s newest store in Toronto’s The Well building on Thursday, Heather Reisman is in her element.

She admires art from local customers that hangs atop the store's stationary section, toggles a jukebox to play Bette Midler's 1990 hit "From a Distance" and fantasizes about dedicating space in the kids' section for arts and crafts.

"We're going to get a big tarp and put it over this," she said, motioning staff toward a giant wood table during a media tour the day before the location is set to open.

"So kids can paint and do stuff on here … That's what I do at home."

Having operated 171 stores in her company’s 27 years in business, the jaunt around the Well location may seem unremarkable but for Reisman, it’s the first stage of a comeback — for herself and her beloved empire.

It wasn’t long ago that Reisman gave up control of the Toronto-based bookstore she started in 1996, which she expanded into a lifestyle retailer where you can buy sex toys, wooden bed frames, cast iron dutch ovens and collagen powder.

Reisman had served as chief executive of Indigo until last year, when Peter Ruis, a retail executive with experience at John Lewis, Anthropologie and Jigsaw, took over. Reisman left the business’s board in August, calling the move to retire “one of the toughest decisions a founder must make.”

Her departure followed a February cyberattack that downed Indigo’s website and hampered sales for weeks.

Four of Indigo's 10 directors later left the board, with Dr. Chika Stacy Oriuwa attributing her resignation to a “loss of confidence in board leadership” and “mistreatment.” Indigo never elaborated on Oriuwa’s allegations.

The leadership changes didn’t stop there. Ruis resigned at the start of September, offering no reason to the public for his departure, and Andrea Limbardi, Indigo's president and a 21-year employee of the company, announced in a LinkedIn post around the same time she was leaving to take the helm of apparel business Reitmans Canada Ltd.

Few were surprised when Reisman was promptly named Ruis’s replacement, but just over a month into her latest tenure, the maven doesn't want to talk about the transition or what came before it.

Asked Thursday about what changes she may have made internally and Oriuwa's "mistreatment" allegation, she said, "All I would say is this: You're all journalists, do you believe everything you read? And that's all I want to say about that.

"I will not comment any more," she continued.

"I think your determination of things should come from what you hear and just hell no, do we believe everything we read."

She also avoided questions about how her predecessor's vision for the Well store may have differed from her own.

Asked what changes she made, Reisman said, "I know where you want to go, I'm not going there."

The location in question was meant to be Ruis’s crowning glory, a 16,000-square-foot “cultural emporium.”

In August, he told The Canadian Press the store would allow shoppers to snack on pastries, coffee, beer and wine served from a blue Citroën truck from the 1950s by the shop’s entrance and browse nooks dedicated to home fragrances, plants and popular Japanese graphic novels known as Manga.

Also on hand would be a listening booth and jukebox, 1980s pinball and Pac-Man machines.

While Reisman retained many of the elements Ruis had planned, the plants, pinball and Pac-Man machines are nowhere to be found a day before opening. An art installation by Canadian artist Kent Monkman is coming soon.

"I've never built a store that at the end, we didn't come in and say, 'Oh, we missed it on this or we missed it on that,'" Reisman said. "It is a process."

One glance at the store shows books are meant to reign supreme. They're front and centre when customers step in the door and still dear to Reisman's heart, no matter how much her company has expanded.

She said she has all 10,000 books she ever owned, including stacks she amassed through the Book of the Month Club she saved up her allowance to buy as a kid.

Joanne McNeish, a Toronto Metropolitan University professor specializing in marketing, feels Reisman's approach has been wise.

"The introduction of lifestyle products to augment sales has never been at the expense of the book business," she wrote in an email.

The assortment works because many of the items are book adjacent and though some may be unplanned purchases, they're easy to carry home, make good gifts and accounted for 44 per cent of Indigo's revenue this year, McNeish added.

Maintaining the delicate balance between making books the star but ensuring the company keeps growing through adjacent products and new categories will be a top task for Reisman.

But for now, all she wants is people to walk into her new store and feel they've found their "happy place."

"If they will say that, I'm a happy camper."

This report by The Canadian Press was first published Oct. 26, 2023.

 

Canadian ranchers brace for long, lean winter after droughts, soaring feed costs

Amanda Stephenson, The Canadian Press

It could be a long, lean winter in cattle country as drought-ravaged western Canadian ranchers struggle to secure feed to get their livestock through the cold months.

Near the town of Eastend in the southwest corner of Saskatchewan, Jocelyn Wasko and her husband Travis have spent much of the summer and fall preparing. They've worked hard to grow their own forage crops, even taking a few thousand acres of durum wheat that didn't grow well enough to sell and cutting and baling it for feed instead. 

Still, after five consecutive years of very little rain on the property that Travis' family has been ranching for more than a century, the parched land can only produce so much. That's why the couple made the tough decision last year to downsize their herd, culling close to 20 per cent of their cows by sending them to slaughter at weaning time.

"We really had no option when we finished out the year last year — all the dugouts were empty and there was no grass," Wasko said in a recent interview.

"And it's really expensive to truck feed into this area. The freight is just killing us."

Across large swathes of the country, extreme heat and dry conditions have taken a toll on agricultural production this year.

As of Sept. 30, according to Agriculture Canada's most recent update, 72 per cent of the country and 69 per cent of Canada's agricultural landscape was considered either "abnormally dry" or in "moderate to exceptional drought." 

But drought's effects aren't felt only in the summer. For cattle producers, winter is when the toll can be most severe, as animals' caloric needs are higher and grazing land is frozen or snow-covered.

"Certainly, the impacts are carrying on for people that utilize the resources that were depleted during the summer," said Trevor Hadwen, a Regina-based agroclimate specialist with Agriculture Canada.

"It's resulted in poor forage and water supply issues for the livestock industry."

From northern B.C. to central Ontario, farmers have had to cope with dry conditions this year. But southern Alberta and southwest Saskatchewan in particular have been what Hadwen calls "hot spots."

In these regions — home to the bulk of Canada's cattle production — the problem isn't this year's drought alone, but the fact that ranchers have now faced years of back-to-back cumulative droughts.

In fact, Hadwen said there are some areas that have officially been in drought for more than 30 of the last 36 months. As a result, locally grown livestock feed is in short supply and imported feed costs have gone through the roof.

At the same time, the amount of moisture in the soil continues to dwindle each year, and many of the reservoirs and rivers are running extremely low.

Sheila Hillmer, who ranches south of Lethbridge, Alta., near the U.S. border, said "ridiculous high temperatures" this summer meant the grass in her pastures basically stopped growing in June. And while her land does have some irrigation infrastructure, the taps had to be shut off mid-July due to concerns over water shortages.

"It's just been a real challenge, you know, to try to keep cattle through this," she said, adding she believes many ranches only stay afloat because their owners supplement their operations by taking an off-farm job.

"We're blessed because our kids are the fourth generation on our place, and we've always hoped we'll see five or six more to come," Hillmer added. 

"But that's going to depend on our ability to survive."

Because many producers over the past several years have had to cull their herds or exit the industry entirely, there are simply less cattle on Canadian ranches in 2023 and less beef being produced.

According to Farm Credit Canada, year-to-date Canadian beef production in 2023 is down six per cent compared to last year. The supply shortage has driven up cattle prices, which are forecasted to average a whopping 33 per cent higher year-over-year in 2023 and 50 per cent higher than the five-year average.

Brodie Haugan, chair of the Alberta Beef Producers organization, said the industry could be about to enter a sustained period of higher prices and strong profitability. But he said that's only a benefit for those ranchers who have still been able to keep their heads above water.

Haugan said he was pleased to see the federal and Alberta governments announce last week they will partner on a $165 million drought livestock relief program for this year to help get producers through this winter.

But he added ranchers need longer-term supports to shield their operations against future droughts.

"We're hoping to have an honest conversation around what a true risk mitigation program, that actually supports the cattle industry in a timely and confident manner, looks like," he said.

"Let's hope we can get it implemented for next year so that it builds that confidence back into our industry. Because we're going to see this again. We're going to have bad years again."

This report by The Canadian Press was first published Oct. 27, 2023.

Canada plans college crackdown amid foreign student troubles

Randy Thanthong-Knight, Bloomberg News

Oct 27, 2023

Prime Minister Justin Trudeau’s government is introducing new measures to tighten standards on colleges, responding to criticism that Canada’s education sector is bringing in so many foreign students that it’s boosting pressure on housing and the labor market. 

Immigration Minister Marc Miller announced a framework on Friday that will push universities and colleges to set a higher standard for services, support and outcomes for international students, starting in time for the fall 2024 semester. Schools that meet the higher benchmark will get priority for the processing of student visas, Miller said, and adequate housing will be one of the criteria.

Institutions also will be required to confirm every applicant’s acceptance letter directly with the Canadian government starting Dec. 1, he said. The process aims to combat fraud, following revelations that hundreds of Indian newcomers unknowingly arrived in Canada with fake college admissions letters. In the coming months, Miller’s department will also review the post-graduate work permit program and introduce reforms to ensure it meets the needs of the labor market.

The plan comes amid growing concern that Canadian educational institutions rely too much on international students as a source of funding. Foreign students are charged an average of five times as much as Canadian students, and colleges catering to foreigners have popped up in strip malls and temporary buildings, most notably in the Toronto suburb of Brampton, Ontario, where Miller made his announcement on Friday.

“We know that there has been consistent underfunding of post-secondary education, particularly by provinces, depending on the province, over the years — and institutions are smart and have adapted to that,” Miller said at a news conference. “That has gone through at times opportunistic fees that have been charged to international students to close a gap that is really an unnatural one and shouldn’t be the case in a country like Canada.”

Post-secondary institutions have increasingly relied on tuition fees as provincial funding as a share of revenue has declined from 42 per cent in 2001 to 35 per cent last year. Ontario, the country’s largest province, has also frozen tuition fees that can be charged to Canadians for the past three years. In 2019 to 2020, foreigners paid 37 per cent of tuition at Canada’s universities, while in 2021 those students paid an estimated 68 per cent of tuition at Ontario’s colleges. 

Many foreign students, on the other hand, use admission to college as a pathway to gain permanent residency in Canada. While Trudeau’s government has previously mulled introducing a cap on international student visas, Miller poured cold water on that idea Friday. The number of foreign students in Canada has tripled in about a decade to more than 800,000 last year.

The experiences of international students are too complex for the federal government to “stomp in and pretend that it has all the solutions” in establishing a visa cap, Miller said.

Provinces have a primary role in accrediting learning institutions, he said. 

“The federal government is coming forward and opening its arms to our provincial partners, territorial partners, to make sure we all do our jobs properly,” he said. “If that job can’t be done, the federal government is prepared to do it.”

International education contributes more than $22 billion to the Canadian economy annually — greater than Canada’s exports of auto parts, lumber or aircraft — and supports more than 200,000 jobs, according to Miller’s office. But the influx of foreign students has exacerbated housing shortages, leaving many without proper accommodation, and flooded labor markets in some regions where there aren’t enough jobs.

Miller’s announcement appeared aimed at private colleges and immigration consultants accused of exploiting international students for profit. He said a government investigation earlier this year identified nearly 1,550 study permit applications connected to fraudulent acceptance letters. 

In most cases, the fraud was detected and the application was refused, but in about 450 cases, a permit was issued. A further review determined some were genuine students, while others were victims who unknowingly received fake admission documents, Miller said.

Media industry 'distortions' creating an uncertain environment: Corus CEO

Iva Poshnjari, BNN Bloomberg

Corus Entertainment Inc. reported lacklustre fourth-quarter earnings Friday as its CEO pointed to a challenging media industry landscape.
 
"The environment is so uncertain I describe it as distortions out there,” Doug Murphy told BNN Bloomberg in an interview on Friday.
 
He pointed to a shaky economic outlook and challenging industry conditions as reasons why the company has decided to use capital to pay off debt and re-focus on internal strategy. 
 
In particular, Murphy pointed to a strike by Hollywood writers earlier this year as mainly responsible for a drop in profits at his media company, as content production was hindered during the labour action.
 
"Our outlook was revised to say we’re looking at 15 to 20 per cent declines in revenue for advertising because we simply can’t drive the audiences, because we don’t have the script to content coming in from Hollywood,” he explained.  
 
Corus Entertainment Inc. has been battling with a decline in advertising revenue alongside a shortage in content, resulting in a disappointing quarter for the company. 

The media company headquartered in Toronto missed analyst exceptions for the fourth quarter and suspended dividends, according to earnings numbers released Friday. 
 
Investors punished the stock by sending it plunging more than 20 per cent to an all time low of $0.70 during late-morning trading on Friday. 
 
SCALING BACK CANADIAN CONTENT

Corus was recently granted a letter from the CRTC indicating it would approve its request to cut back on Canadian content production.

Eased Canadian content regulations will give Corus more flexibility and better planning around content, Murphy said. 

"When your revenues are down like they were for us, 10 to 11 per cent on the year and the quarter, and your Canadian spending is up, that’s the wrong math for margins,” he said. 
 
GROWTH STRATEGY 

Murphy said Corus is focused on broadening the company beyond traditional television broadcasting.

"Our strategy is to be video first,” he said. “We’re moving from beyond a television broadcast to be an aggregator of premium video across all platforms.”
 
While there has been meaningful revenue growth from its digital platform strategy, cost cuts have been mandatory to pay off debt and fund future strategy.  
 
“We’ve been reducing our head count (and) taking out costs across the business," Murphy said as he pointed to the sale of a non core Corus asset Toon Boom for $147.5 million earlier this year. 
 
"We just need to stay focused on execution," he said. 

Imperial Oil's fleet of heavy-haul trucks at Kearl oilsands site now fully autonomous

Amanda Stephenson , The Canadian Press

Imperial Oil Ltd. expects its recently completed transition to self-driving trucks at its Kearl oilsands mine will help boost bitumen production from that site to all-time record levels in the coming years.

The Calgary-headquartered Imperial, which is majority-owned by U.S. giant Exxon Mobil, said Friday that it has completed a multi-year effort to convert its entire fleet of heavy haul mining trucks at Kearl — which is located north of Fort McMurray, Alta. — to fully autonomous operation.

Imperial CEO Brad Corson said this means the company now has 81 fully autonomous haul trucks in service. 

“We now operate the largest autonomous haul fleet in our industry, and one of the largest autonomous mining fleets in the world," Corson said on a conference call in which he discussed the company's third-quarter financial results.

"I'm very proud of what we have achieved to date with this program, and we continue to look at other potential opportunities to expand our autonomous project to other areas of our mining fleet.”

Globally, the mining sector has been increasingly working to deploy technology advances in the areas of AI and remote technology in order to remove human operators from some of the most difficult and dangerous mining jobs.

Imperial, which has been one of Canada's early movers when it comes to the large-scale adoption of autonomous technology, said lower costs are one advantage of self-driving vehicles, though company executives said many former truck drivers have not lost their jobs but have been redeployed to work in the control room or other parts of the company's operations.

"Head count reduction, or head count efficiencies, I'll call it, is definitely one of the value drivers for autonomous – though it’s by no means the most significant," said Simon Younger, Imperial's senior vice-president for upstream.

"Really, the bulk of the value comes through productivity improvements."

Younger said Imperial is already close to achieving the $1-per-barrel in cost savings the company had previously targeted from its autonomous program. 

The improved efficiency and productivity of self-driving trucks will also help Imperial continue to grow oil production at Kearl, Corson said. In the third quarter, the oilsands site averaged 295,000 barrels of barrels per day of bitumen production — the highest quarterly production in the mine's history.

It also broke a new single month production record in September, with 322,000 barrels per day of output on average.

Imperial indicated at its most recent investor day that it expects to average 280,000 barrels per day from Kearl in 2024, and grow that production to new heights beyond that.

"Though we haven't put a specific timeline, we do see the potential to achieve 300,000 barrels per day," Corson said. 

"Thinks like autonomous haul, leveraging technology, are all integral components to achieving those higher volumes."

In addition to driverless trucks, Imperial is working to deploy other new technologies across its operations including big data analytics, virtual reality, robotics and automation, drones and more.

Imperial said Friday it earned $1.6 billion in the third quarter of 2023, down from $2.0 billion in the prior year's quarter.

Its profit worked out to $2.76 per share, compared with $3.24 per share in the same three-month period of 2022.

Upstream production in the third quarter of 423,000 gross oil-equivalent barrels per day on average, while refinery throughput in the quarter averaged 416,000 barrels per day with refinery capacity utilization of 96 per cent.

Imperial said its quarterly cash flow from operating activities was $2.4 billion.

 

TC Energy is exploring stake sales of assets worth US$10 billion

WHEN DO THEY PAYBACK ALBERTA TAXPAYERS 

Kiel Porter and Robert Tuttle, Bloomberg News

(Bloomberg) -- Pipeline and transportation company TC Energy Corp. is pursuing a multibillion-dollar asset sale plan to reduce debt and fund new investments, according to people familiar with the matter.

The Calgary-based company is working on a the sale of a minority stake in the ANR Pipeline Co., which it has ascribed an enterprise valuation of about $3 billion, said the people, who asked not to be identified because they weren’t authorized to speak publicly.

TC is also looking at selling a minority of its Mexican operation, which has annual earnings before interest, taxes, depreciation and amortization of about $600 million. Other potential transactions include a controlling stake in the Portland Natural Gas Transmission System and a significant minority stake in the Millennium Pipeline, both of which have enterprise values of more than $1 billion, the people said.

In all, those assets have a combined value of about $10 billion, although the stake-sale transactions would constitute only a portion of that total, the people said.

No final decisions have been made and TC could elect to keep some or all of the assets, the people said. The company said in an emailed statement that it doesn’t comment on rumors or speculation.

“As we have previously disclosed, as part of our ongoing capital rotation program, we continue to evaluate opportunities to further our de-leveraging objectives and optimally fund our secured capital program,” according to the statement.

The company’s US-traded shares have fallen 15% this year, giving it a market value of $35 billion.

TC is undergoing an overhaul under President and Chief Executive Officer Francois Poirier, with the company announcing in July a plan to spin off its Liquids Pipelines business and a partial sale of its Columbia Gas Transmission and Columbia Gulf Transmission business to Global Infrastructure Partners in a deal valued at $5.2 billion.

Company executives said in July that an additional $3 billion of divestitures over the next 18 months would be needed to bring the company’s debt ratio to its target of 4.75 times earnings before interest, taxes, depreciations and amortization by the end of 2024.

The decision to look at sales comes amid a wave of pipeline asset transactions this year as companies look to take advantage of increasing free cash flow as usage increases post pandemic. ONEOK agreed to buy Magellan Midstream Partners for almost $19 billion, while Energy Transfer bought Crestwood Equity Partners, both in May, according to data compiled by Bloomberg.

©2023 Bloomberg L.P.