MONOPOLY CAPITALI$M

Crescent Point solidifies Montney dominance in $2.55B deal for Hammerhead Energy

Amanda Stephenson, The Canadian Press

Crescent Point Energy Corp. has inked another blockbuster deal in the Canadian oilpatch, solidifying its place as the dominant player in the Montney, one of North America's largest unconventional petroleum plays.

The Calgary-based oil and gas company announced Monday it will purchase Hammerhead Energy Inc., a Calgary-based energy company with assets in the Montney region of northwest Alberta, for a total of $2.55 billion, including approximately $455 million of Hammerhead's net debt.

The deal will see Crescent Point acquire approximately 105,000 acres and 800 drilling locations in the region, immediately making Crescent Point the largest landowner in the Alberta Montney's volatile oil fairway. 

The company is already the largest landowner in the adjacent Kaybob Duvernay shale play.

The purchase will also see Crescent Point become Canada's seventh-largest oil and gas exploration and production company by volume, with production expected to total over 200,000 barrels of oil equivalent per day once the deal is closed.

In the Montney specifically, the deal will result in Crescent Point increasing its production in the region by 56,000 boe/d in 2024, to 94,000 boe/d — nearly half of the company's overall estimated production for next year.

The deal, which includes approximately $455 million of Hammerhead’s net debt, will see Hammerhead shareholders receive $21 per fully diluted common share, through a combination of approximately $1.5 billion in cash and 53.2 million common shares of Crescent Point.

The deal is expected to close in December 2023.

"As you can tell, we're very excited about this strategic consolidation opportunity, and the future outlook for the company," said Crescent Point CEO Craig Bryksa on a conference call to discuss the acquisition Monday. 

"We believe this acquisition solidifies the company's future outlook by establishing a dominant position in one of North America's premier reservoirs."

Crescent Point has been on a buying spree recently as it has sought to optimize its asset portfolio. Earlier this year, the company snapped up Spartan Delta Corp.'s assets in the Montney for $1.7 billion.

The Montney and the Kaybob Duvernay represent what Crescent Point believes are its greatest opportunity. In August, the company announced it would sell off its North Dakota assets to focus more on the Montney and Duvernay.

In 2021, Crescent Point acquired Shell Canada's Kaybob Duvernay assets for $900 million in 2021 and has made additional purchases since.

There have been a string of high-profile deals in Canada's energy sector this year.

Other acquisitions of note include ConocoPhillips's approximately $4-billion purchase of TotalEnergies' Surmont oilsands project; Suncor Energy Inc.'s $1.47-billion acquisition of Total's stake in the Fort Hills oilsands mine and Tourmaline Oil Corp.'s purchase of Bonavista Energy Corp. for $1.45 billion.

The wave of consolidation is in part the result of two years of strong commodity prices. Many companies are flush with cash and have rapidly been paying down debt, giving them a strong enough balance sheet to pursue growth through acquisitions.

This report by The Canadian Press was first published Nov. 6, 2023.

'Doesn't make sense': Business leaders say halted trade talks harm India and Canada

BNN Bloomberg

Business leaders continue to grapple with the economic uncertainty fostered by the rift between the Canadian and Indian governments, saying the suspension of free trade talks hurts both sides.

The heads of several commercial groups say the souring relationship marks a major hurdle to boosting bilateral trade beyond last year's $20.9 billion in goods and services and deters Indian students from studying in Canada.

Relations between the two countries eroded after Prime Minister Justin Trudeau told Parliament on Sept. 18 that New Delhi may have been involved in the killing of Canadian citizen Hardeep Singh Nijjar, a Sikh independence activist.

In response, the Indian government suspended visa services for Canadian citizens — partially restored last month — and revoked diplomatic immunity from Canadian diplomats, prompting two-thirds of them to leave the country.

Canada India Foundation chairman Satish Thakkar says cancelling the trade talks — Canada halted them on Sept. 1 — "doesn't make sense" given the potential loss to both parties, and believes the higher tensions mark the lowest point in Canada-India relations since the 1970s.

Victor Thomas, who heads the Canada-India Business Council, says the resulting uncertainty has derailed some Indian students who were mulling post-secondary education in Canada, a talent pool that makes up the largest slice of the country's international student body at 40 per cent.

This report by The Canadian Press was first published Nov. 6, 2023.

LEAVE CPP ALONE

Alberta would need to negotiate international agreements if it quits CPP: Freeland

The Canadian Press

Federal Finance Minister Chrystia Freeland said Friday that if Alberta were to quit the Canada Pension Plan, it would need to launch a "complex and multi-year process" of negotiating international social security agreements to deal with contributors who work abroad. 

Freeland listed that effort among other steps she says the Alberta government, as well as the federal government, would need to take if Premier Danielle Smith decides to withdraw the province from the federal retirement plan and set up its own program. 

Her remarks came following a virtual meeting with provincial finance ministers, in which she says they discussed the consequences of Alberta going ahead with its proposal. 

"Of course Alberta has the right to withdraw," Freeland told reporters. 

"But Alberta's choice about the (Canada Pension Plan) also implicates every single Canadian." 

Freeland, who called herself a "proud daughter of Alberta," said she is hearing from Albertans who are concerned about the idea and is asking the chief actuary to "provide an estimate of the asset transfer," based on  a "reasonable interpretation of the provisions in the (Canada Pension Plan) legislation." 

On the issue of negotiating international social security agreements, Freeland told reporters during Friday's news conference that if Alberta launched its own program it would need to do so to "ensure similar treatment of contributors who spend part of their careers aboard." 

Quebec has negotiated its own such agreements with 39 countries, while Canada has done the same with 60. 

"This would be a complex and multi-year process and it would be taking place at a time of real uncertainty," Freeland said, both in terms of "geopolitical uncertainty" and "global economic uncertainty." 

The Alberta government argues that its workers have contributed an oversized share to the national fund and would be in line for big savings and payouts if it were to leave the CPP.

Alberta Premier Danielle Smith had planned to hold a possible referendum on leaving the CPP in 2025, but now says she won’t go ahead with such a vote until governments or the courts deliver a hard number on how much Alberta will get if it leaves the plan.

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

 

Zara Canada being investigated by ethics watchdog over alleged links to forced labour

The Canadian Press

Canada's corporate ethics czar says it has launched a fact-finding investigation into allegations that Zara Canada Inc. is working with companies that use forced labour in China.

The Canadian Ombudsperson for Responsible Enterprise says its investigation into the apparel company stems from allegations made by 28 civil society organizations.

The organizations alleged in June that Zara Canada has supply relationships with three Chinese companies identified as using or benefitting from the use of Uyghur forced labour.

The ombudsperson says Zara Canada has denied the allegations and said the complaint is inadmissible because the alleged human rights abuses do not arise from its operations. 

The ombudsperson added Zara Canada declined mediation, saying it does not have a commercial relationship with any factory in the Xinjiang Uyghur Autonomous Region.

Zara is the eighth company the ombudsperson has investigated for using Uyghur forced labour in its supply chain. Other companies it has looked into include Ralph Lauren Canada LP, Walmart Canada, Hugo Boss Canada Inc., Diesel Canada Inc. and mining company Gobi Man and says more assessments will be made public in the coming weeks.

This report by The Canadian Press was first published Nov. 6, 2023.

UK online fashion retailer Boohoo defends

supplier treatment after BBC probe


A woman poses with a smartphone showing the Boohoo app in front of the Boohoo logo on display in this illustration taken September 30, 2020. 

REUTERS/Dado Ruvic/Illustration/File Photo© Thomson Reuters

LONDON (Reuters) - British online fashion retailer Boohoo defended its treatment of suppliers on Monday after the BBC said it had seen evidence of staff pressuring suppliers to drive prices down, even after deals had been agreed.

BBC Television conducted an investigation with an undercover reporter, who worked for 10 weeks at Boohoo's head office in Manchester as an administrative assistant.

"Like all businesses, we have experienced significant cost inflation over the last year, which we have absorbed in order to maintain affordable prices for customers," a spokesperson for Boohoo said in a statement.

"As the cost of raw materials, freight and energy started to come down, the Group asked its suppliers to reflect this in their pricing through discounts of between 1 and 10%, and we passed the savings onto customers," the spokesperson said.

In 2020, Boohoo accepted all the recommendations of an independent review that found major failings in its supply chain in England after newspaper allegations about working conditions and low pay in factories in the Leicester area.

It pledged to fix the problems with its "Agenda for Change" programme.

"Boohoo has not shied away from dealing with the problems of the past and we have invested significant time, effort and resource into driving positive change across every aspect of our business and supply chain," the spokesperson said.

Boohoo had made a number of improvements, including strengthening the ethical and compliance obligations on those wishing to supply Boohoo and regularly publishing a full list of approved global manufacturers.

"The action we've taken has already delivered significant change and we will continue to deliver on the commitments we've made," the spokesperson said.

Boohoo and rival ASOS grew rapidly during the pandemic when high street rivals were shuttered by lockdowns.

But supply chain issues, higher product returns, competition from rivals like Shein and rapidly rising living costs hit them hard.

Both Boohoo and ASOS have warned on the outlook in recent weeks.

Shares in Boohoo, 16.5% of which are owned by Mike Ashley's Frasers, fell as much as 2.6% before paring losses to stand 0.8% lower at 1039 GMT, extending a decline over the last year to 28%.

(Reporting by James Davey; Editing by Kirsten Donovan)

 

Quebec English universities promise to offer more French if tuition hike is scrapped

BNN Bloomberg

McGill University campus is seen Tuesday, June 21, 2016 in Montreal. , THE CANADIAN PRESS/Paul Chiasson

Quebec's English-language universities say they will ensure that more out-of-province students graduate with a knowledge of French if the government doesn't double their tuition.

The heads of McGill, Concordia and Bishop's universities made the proposal to Quebec Premier François Legault and Higher Education Minister Pascale Déry during a meeting in Montreal today.

They were convened to the meeting after the government recently announced it would increase tuition for out-of-province students to $17,000 from around $9,000 as a way to protect French.

Concordia University president Graham Carr described today's meeting as "constructive" and said he and his colleagues were told the government would respond soon.

In an email to university staff, Concordia University said the plan would include a compulsory French course for out-of-province students, as well as other programs intended to help them integrate into Quebec's culture and labour market.

Legault's office said the meeting was private and declined to comment. 

This report by The Canadian Press was first published Nov. 6, 2023.

Ontario plans to require salary ranges be included in job postings

The Canadian Press

Ontario is planning to require employers to include salary ranges in job postings and disclose if artificial intelligence is used during the hiring process.

Labour Minister David Piccini says those changes will be part of legislation he will soon introduce and will help workers make informed decisions.

He says that including salary ranges in job postings could help close the gender pay gap, as women still earn an average of just 87 cents for every dollar earned by men.

Piccini is also announcing today that the province is considering banning the use of non-disclosure agreements in cases of workplace sexual harassment, misconduct or violence.

Ontario has previously banned the use of NDAs in sexual misconduct cases among post-secondary employees who are looking for work at a different institution.

Members of the Canadian Bar Association voted in favour of discouraging the use of non-disclosure agreements in cases of abuse and harassment.

The government says seven in 10 workers have reported experiencing a form of harassment or violence in their workplace, with the rates even higher for women and gender-diverse people.

"We want to hear from Ontarians and (our) consultations will work with the legal community, survivors, employers to identify those options to restrict the use of NDAs while protecting the rights of victims," Piccini said in an interview. 

"NDAs should never be used to silence victims, and those who've done that, their time's up."

This report by The Canadian Press was first published Nov. 6, 2023.

BIG TOBACCO INVESTS IN POT

Organigram soars on BAT investment

Jordan Fleguel, BNN Bloomberg

ORGANIGRAM HOLDINGS INC (OGI:CT)

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Organigram Holdings Inc., one of Canada’s largest cannabis producers, announced a $124.6 million investment from British American Tabacco (BAT) on Monday. 

The cannabis company said a large chunk of the money would be used to set up a new strategic investment pool.

Organigram shares rose 30 per cent on the news. The stock was up 25 per cent as of 11:20 a.m. on Monday.

BAT already owns an 18.8 per cent stake in Organigram, and the proposed deal will see it increase its voting common share ownership stake to 30 per cent and raise its overall equity interest to 45 per cent.

Organigram said it plans to use $83.1 million of BAT’s investment to create a strategic investment pool known as "Jupiter" to help grow its geographic footprint and invest in emerging growth opportunities, with the rest being used for general corporate purposes.

“We are excited to bring this transformative transaction to Organigram’s shareholders, reinforcing our commitment to delivering shareholder value,” Organigram CEO Beena Goldenberg said in a Monday press release.

“This investment bolsters an already strong balance sheet and solidifies our position as a leading cannabis company.”

In its own press release on Monday, BAT said it has been “pleased with Organigram’s performance and continues to be impressed by the careful financial governance of the company.”

Organigram shares were up 48 cents at $2.07 in early trading on the Toronto Stock Exchange.

With files from the Canadian Press

MYOB CULTURE

Majority of Canadians have difficulties discussing financial problems: survey

Daniel Johnson, BNN Bloomberg

A new survey found that more than half of Canadians find it challenging to discuss financial issues with those closest to them. 

BDO Debt Solutions’ Debt Stigma Survey, released Monday, found that 56 per cent of respondents indicated they found it difficult to discuss financial issues with their friends and family. 

“Most people find it very difficult to talk about debt and the financial challenges they’re facing, let alone the strategies for overcoming debt,” Nancy Snedden, the national leader of the BDO Debt Solutions practice, said in a press release. 

“As a result, a lot of people who are struggling feel lost and isolated, making their situation even more stressful."

Thirty-eight per cent of those surveyed with no plans to discuss their debt indicated a fear of judgment as well as shame or embarrassed feelings, the survey found.

Other reasons cited included privacy concerns, held among 35 per cent of respondents, as well as 31 per cent saying they feared people thinking they were asking for money and 29 per cent saying they were afraid of burdening others. 

Canadians aged 18-34 were found to be most concerned about their debt, with 64 per cent indicating these concerns, compared to 40 per cent of those older than 55 indicating debt-related concerns. 

“For this younger demographic, the challenge to talk about financial issues, including debt, stems from knowledge gaps and low financial literacy when it comes to debt management concepts for almost one-third of respondents (32 per cent),” the release said. 

The survey indicated that of those who find it the most challenging to discuss financial issues, 86 per cent say it would be hard to admit they can’t afford their grocery bill. Within that group, 85 per cent answered they would find it difficult to tell family or friends they have too much debt and ask for help. 

“The results of our BDO Debt Stigma Survey clearly affirm a sense of shame and embarrassment among those burdened with affordability challenges and debt,” Snedden said. 

However, the survey also found that Canadians “are showing signs” that increased transparency on financial matters is required, as 89 per cent of respondents said they would tell their family or friends if they were not able to participate in an event due to budget constraints.

METHODOLOGY 

The online survey was conducted in a partnership between BDO Canada and Leger. It was conducted between Sept. 15 to Sept. 17 among a random sample of 1,565 Canadians over the age of 18. 

 

Brookfield raises US$26 billion on Oaktree, infra fund boost

Layan Odeh, Bloomberg News

Brookfield Asset Management raised US$26 billion in the third quarter and said it’s on track to bring in close to $150 billion in fresh capital this year, despite a tough fundraising environment. 

“2023 is shaping up to be an excellent year for capital raising, which sets the stage next year for excellent earnings and dividend growth,” President Connor Teskey said in a statement Monday. About $11 billion came into the funds of Oaktree Capital. 

The Toronto-based alternative asset manager posted distributable earnings of $568 million in the quarter, up eight per cent from the prior year, according to the statement. 

Fee-bearing capital, a measure of the amount from which the firm is entitled to earn fee revenue, was $440 billion at the end of September, the same as three months earlier. It has a goal of getting to $1 trillion by 2028. 

The firm, which handles about $850 billion of assets including those of its parent, Brookfield Corp., has been one of the world’s most active investment firms this year, even as many of its peers have remained on the sidelines in a quiet spell for mergers and acquisitions. 

Brookfield has raised $61 billion since the beginning of the year, Teskey said, giving it $102 billion of dry powder available to deploy. 

During the quarter, Brookfield closed its third infrastructure debt fund at more than $6 billion; it also expects the size of its latest flagship infrastructure fund to exceed $27 billion. The Canadian firm also held a final close for its sixth flagship private equity fund at $12 billion. 

Its most recent deals include an agreement to buy most of the assets of bankrupt data center firm Cyxtera Technologies Inc. for $775 million and Dubai-based credit card processor Network International Holdings Plc for about £2.2 billion (US$2.7 billion). 

But Brookfield’s efforts to buy Origin Energy Ltd. hit a snag after top shareholder AustralianSuper rejected the offer. 

Brookfield expects a busy period of deal activity as markets regain confidence and liquidity starts to return, according to a letter to shareholders from Chief Executive Officer Bruce Flatt and Teskey. Interest rates are “peaking, and this is good for transaction activity,” they said. 

“Economic activity has been resilient and labor markets have remained tight, particularly in the United States,” Flatt and Teskey wrote. 

The firm’s $150 billion target for 2023 fundraising includes money it expects to manage for American Equity Investment Life Holding Co., which Brookfield Reinsurance is in the process of acquiring. 

 

Premiers say Ottawa must ensure carbon pricing measures are fair to all Canadians

The Canadian Press

Almost all of Canada's premiers presented a rare unified front today as they took turns saying Ottawa's recent changes to its carbon pricing measures were unfair to the country.

Premiers from across Canada, except Quebec, released a statement after a meeting in Halifax, calling on Prime Minister Justin Trudeau to ensure that federal policies, like carbon pricing, are delivered equitably.

Last week, Trudeau announced his government would pause for three years the carbon price on home heating oil to make it easier for users of that fuel to switch to electric heat pumps.

But the move immediately drew criticism from premiers in Western Canada, where few residents and businesses use home heating oil.

The nine premiers today rallied around the idea that Ottawa's move treated Canadians differently at a time when the entire country is struggling with an affordability crisis.

They also called on Trudeau to convene an in-person first ministers meeting, something that hasn't happened since 2018 despite repeated requests from the provinces.

This report by The Canadian Press was first published Nov. 6, 2023.