What's next for the Trans Mountain pipeline project?

After more than four years of construction and at least $34 billion in costs, the Trans Mountain pipeline expansion project is nearly complete.

Here's a look at what milestones to expect in the coming weeks as the massive pipeline gets ready to start shipping Canadian oil to the West Coast:

Resolution of B.C. construction challenges: Crown corporation Trans Mountain Corp. has been dealing with construction-related challenges in the Fraser Valley between Hope and Chilliwack, where it encountered an "obstruction" when trying to pull the pipe into the horizontal hole that had been drilled for it. The setback forced the company to remove the pipe temporarily to address the issue, but Trans Mountain Corp. says it is nearing a resolution and expects to be able to re-install the pipe in that section within the next couple of weeks.

Mechanical completion: This marks the final stage of physical construction of the pipeline. Once the challenging segment of pipe has been successfully pulled back into its location, Trans Mountain will be able to complete the "final weld," or what is formally known as mechanical completion. 

Leave To Open: After construction is finished but before the pipeline can be put into service, there are several regulatory steps that must be completed. In accordance with the Canada Energy Regulator Act, companies require permission from the CER before commencing operations of a pipeline. This process is called Leave to Open and requires results from a series of inspections and safety tests. Because the Trans Mountain project has been constructed in phases, the company has been applying for Leave to Open permission in stages in order to allow flexibility during the commissioning and startup process.

Line fill: This term is used to describe the final stages of work required to prepare and ultimately fill the expanded pipeline system with more than four billion barrels of oil. The process will take several weeks to complete. While line fill has not yet started on the newly constructed pipe, part of the Trans Mountain expansion project involves reactivating two older pipeline segments that had been maintained in a deactivated state. Initial line fill has already begun in B.C. on that section of the project.

In-service: This term refers to when the entire expanded pipeline system is fully operational and ready to make regular deliveries. According to a Bloomberg report, China's Sinochem Group has purchased one of the first shipments, a 550,000-barrel cargo from Suncor Energy Inc., which will load from the Trans Mountain expansion pipeline in May-June. Trans Mountain is continuing to target an in-service date sometime in the second quarter of 2024.

Cleanup and reclamation: Once the expanded pipeline is operational, required cleanup and reclamation work will continue in the project's construction zone.

This report by The Canadian Press was first published March 26, 2024.

Luxury parka maker Canada Goose laying off 17% of corporate staff

LAST ONE OUT OF THE OFFICE TURN OFF THE LIGHTS

Tara Deschamps, The Canadian Press

Canada Goose Holdings Inc. says it is laying off 17 per cent of its global corporate workforce.

In a LinkedIn note from CEO Dani Reiss, the luxury parka maker said Tuesday that the job cuts are meant to put the company in a better position for scaling and will help the Toronto-based business focus on efficiency and key brand, design and operational initiatives.

"This is sad news for me to share because we have individuals leaving the organization today who were instrumental in making Canada Goose the business it is today, and I am personally grateful to each and every one of them," Reiss wrote.

"Decisions like this are heartbreaking, but at the same time I am confident this is necessary for the next phase of our business."

When asked about the extent and nature of the cuts, Canada Goose did not release the number of employees affected.

Canada Goose had 4,760 staff in April 2023, according to data from financial markets firm Refinitiv.

The layoff comes after Canada Goose faced a particularly difficult winter.

First, unseasonably warm temperatures pushed back the start of the usual parka buying season.

“The first cold snap prompts business,” chief financial officer Jonathan Sinclair said on Nov. 1 call with analysts to discuss the company's second quarter financial results.

“It sort of reminds the consumer that this is the time that they should go and buy cold weather gear, so the longer you wait for that, the later (the sales period) starts, and I think that is what we've experienced this year.”

Months later, when the company was discussing its third-quarter performance, Reiss conceded the company was facing a "challenging consumer environment” globally.

Carrie Baker, the company's president of brand and commercial, said Canada Goose was open to hiking prices as buyers rethink purchasing expensive apparel while interest rates and inflation remain high. Despite already selling some parkas for $2,000, a higher price point would increase the desirability of the luxury brand, she said.

On Tuesday, Baker's role was expanded to also include design, while Beth Clymer, president of finance, strategy and administration, took on additional operations responsibilities that used to fall under chief operating officer John Moran. Moran left the company on March 19.

Rounding out the job changes was Daniel Binder, chief transformation officer, who will now also oversee the company's global stores.

Canada Goose said the shuffle is the result of a "comprehensive review" of its organizational structure and roles" needed to achieve our strategic objectives, which we anticipate will yield immediate cost savings, simplify organizational structure, accelerate decision making and increase efficiencies across our operating platform." 

Canada Goose is set to release its fourth-quarter and full-year financial results in May, where it said it will provide further information on its transformation and its outlook for fiscal 2025.

This report by The Canadian Press was first published March 26, 2024.

 

CFIB says 200,000 small businesses took new loans to meet CEBA repayment deadline

Ritika Dubey, The Canadian Press

Roughly 200,000 small businesses took on new debt to access the forgivable portion of their pandemic relief loans from the federal government, the Canadian Federation of Independent Business said Tuesday.

Many businesses took private bank loans with high interest rates to pay back enough of their Canada Emergency Business Account loans to qualify for partial loan forgiveness, CFIB president Dan Kelly said Tuesday.

Meeting the new payment obligations will be a challenge for some, he said.

"This has caused a real constraint on businesses," Kelly said in an interview. "They do so, in so many ways, with a gun to their head because they had no choice in order to access that forgivable portion."

The federal government provided up to $60,000 in interest-free loans to help businesses and non-profit organizations survive pandemic-related shutdowns and slowdowns.

Businesses that paid off the required portion of their loan by the repayment deadline were eligible to have the remainder forgiven. Those that missed the deadline lost out on the forgivable portion and saw their debt converted to a three-year loan with interest of five per cent annually.

The CEBA repayment deadline was extended twice, as businesses dealing with inflation and a slowing economy struggled to come up with the cash, and expired on Jan. 18.

However, a special extension to March 28 was allowed for companies to refinance their loans with a financial institution instead.

As Thursday approaches, Kelly said, some of his organization's members are growing anxious.

"We're starting to get a bunch of calls from business owners that are still facing a level of CEBA panic," Kelly said.

According to the government's CEBA database, more than 28 per cent of businesses have fully paid back their loans. Of the remainder, 65 per cent expect to fully repay the loan by the end of 2026.

Kelly speculated business owners on the verge of defaulting are likely to pay just the interest and not be able to keep up with their obligations.

"That should send an alarm bell to public policymakers," he said, as many small-scale businesses are facing bankruptcies.

The Office of the Superintendent of Bankruptcy said last month that the number of insolvencies filed by Canadian companies in 2022 was up 37.2 per cent compared with 2021.

The small business association is calling on Ottawa to establish partial forgiveness for businesses in the next three years as they start repaying their principal amount.

It is also urging banks to be compassionate toward businesses as they seek refinancing.

This report by The Canadian Press was first published March 26, 2024.

 

Economists defend Liberals' carbon price as political rhetoric heats up

The Canadian Press

Dozens of Canadian economists are issuing an ardent defence of Canada's price on carbon, as the government faces increased pressure from Opposition Conservatives and provincial premiers to pause a planned increase to the levy. 

A growing number of premiers have joined the federal Conservatives and come out against raising the carbon price from $65 to $80 per tonne as scheduled for April 1. 

The economists released an open letter in response to the intense political rhetoric that has garnered 80 signatures from academics across the country as of this afternoon.

The letter says signatories support heathy public debate, but it should be based on facts and sound evidence. 

The economists say several arguments against the carbon price are based on myths, and the levy is actually the least costly way to reach Canada's climate goals.

The letter says the most vocal opponents of the policy have not said how they would reduce greenhouse-gas emissions at a lower cost. 

This report by The Canadian Press was first published March 26, 202

Canadian IT workers welcome AI adoption, but hurdles remain: survey

Ben Cousins, BNN Bloomberg\

A survey of Canadian “IT decision makers” shows most companies welcome the use of artificial intelligence in their work, but are concerned for its current uses.

The survey from CDW in collaboration with Angus Reid, released Tuesday, shows 61 per cent of respondents are open to using AI and 58 per cent believe it helps productivity, but 49 per cent are uncomfortable with its current uses.

Michael Traves, the devops and AI cloud principal architect at CDW Canada, said in a news release that much of the discomfort surrounding AI comes from a misunderstanding of the technology.

“Organizations recognize the transformative potential of AI and its ability to not only enhance operational efficiency but to drive innovation and growth,” he said in the release. “The current discomfort with AI adoption stems from a lack of understanding around important pieces of the AI puzzle, including security, education and compliance.”

The optimism surrounding AI echoes a similar report from the financial services company Square, which found 100 per cent of responding Canadian restaurants believe AI can help with staffing and food prep, among other use cases.

The report also speculated AI could one day help with pairing food and drink choices to individual tastes for an elevated experience.

Understanding of AI has also hurt the implementation of the software, however. More than half of respondents have already implemented some form of AI into their workplace, but on 21 per cent of respondents believe their company is doing it effectively.

CDW explains the disconnect “highlights a significant gap in education and governance between those responsible for overseeing AI integration, the organizations they work for and assumptions about the complexity of AI tools.”

Small businesses lag behind

The survey also found a lack of AI knowledge among small businesses, as just 28 per cent of small businesses were aware of AI data processing tools, compared to 60 per cent of larger businesses.

Small businesses are also less likely to benefit from AI adoption, the survey found. Just 18 per cent of small businesses found AI provided customer service benefits and only 20 per cent reported it helped with decision-making.

Overall, CDW recommends tailoring AI solutions to individual employees’ needs, for businesses to train employees on AI and evaluate the AI options to find the best organizational fit. 

METHODOLOGY

These are the findings of an online survey conducted by CDW from February 1 to February 8, 2024, among a sample of 309 IT decision-makers who are members of the Angus Reid Forum. The survey was conducted in English. For comparison purposes only, a probability sample of this size would carry a margin of error of +/-6 percentage points, 19 times out of 20.

Need to improve Canadian productivity has reached emergency level, BoC official says

FAILURE OF CAPITALI$TS TO INVEST VS BUYBACKS

The Canadian Press

A senior Bank of Canada official says the need to improve productivity has reached an emergency level as the economy faces a future where inflation may be more of a threat than in the past few decades.

"You know those signs that say 'In an emergency, break the glass?' Well, it's time to break the glass," Bank of Canada senior deputy governor Carolyn Rogers said in a speech Tuesday.

Rogers said Canadian labour productivity eked out a small gain at the end of last year, but that came after six straight quarters where productivity fell.

She noted the U.S. has seen productivity gains coming out of the pandemic as firms found their footing, but Canada has not seen the same.

"In fact, the level of productivity in Canada’s business sector is more or less unchanged from where it was seven years ago," Rogers said.

The need to improve productivity comes as Rogers said many of the forces that helped create a benign environment for inflation in the past are going to fade away, or even reverse. 

"We know that changing demographics and the economic impacts of climate change will tend to put upward pressure on prices. Persistent global trade tensions also raise the risk of future inflation," she said.

The Bank of Canada's next interest rate decision and monetary policy report is set for April 10.

Inflation has been cooling in recent months, coming in at an annual rate of 2.8 per cent in February. Economists will be watching to see what the central bank, which is targeting an annual inflation rate of two per cent, will have to say about cuts to its key interest rate target.

Rogers said Tuesday that productivity is a way to inoculate an economy against inflation.

"An economy with low productivity can grow only so quickly before inflation sets in. But an economy with strong productivity can have faster growth, more jobs and higher wages with less risk of inflation," she said.

Canada's lagging productivity has been a chronic problem.

Rogers said when you compare Canada’s recent productivity record with that of other countries, what sticks out is how much the country lags on investment in machinery, equipment and intellectual property.

She also said Canada needs to focus on making sure the training and education we provide teach the skills we need, while a more competitive business environment would help drive greater innovation and efficiency. 

This report by The Canadian Press was first published March 26, 2024.

 

CRA fires 232 people for falsely claiming $2,000 monthly pandemic benefit

THAT'S ALOT OF GREIVANCES

The Canadian Press

A sign outside the Canada Revenue Agency is seen Monday May 10, 2021 in Ottawa. The Canada Revenue Agency has now fired more than 200 people for falsely claiming a federal income benefit during the COVID-19 pandemic. , THE CANADIAN PRESS/Adrian Wyld

The Canada Revenue Agency has now fired more than 200 people for falsely claiming a federal income benefit during the COVID-19 pandemic.

The CRA says as of March 15, 232 employees "inappropriately applied for and received" the Canada Emergency Response Benefit and have been terminated, an increase of 47 since December.

The benefit, known as CERB for short, provided $2,000 per month to Canadians whose jobs were lost as a result of public health restrictions during the pandemic.

They must repay the CERB funds they received if they have not already done so.

The agency launched an internal review that identified 600 employees for further investigation but not all would have been ineligible for the benefit because some were students or term employees.

The CRA says the case-by-case reviews completed to date confirmed 133 employees properly received the benefit, leaving about 235 files still to be reviewed.

This report by The Canadian Press was first published March 26, 2024.

WORKERS CAPITAL

More domestic investment by Canada's pension funds would strengthen the economy: Brosseau

Jordan Fleguel, BNN Bloomberg

The co-founder of the firm leading the charge to encourage Canada’s pension funds to invest more at home says that increased domestic investment would strengthen the Canadian economy, and the funds themselves in turn.

Daniel Brosseau, partner at Montreal-based investment management company Letko Brosseau, told BNN Bloomberg that Canada’s pension plans should look at more than just near-term returns when deciding where to invest capital.

“Domestic investments have an enormous impact, which (pension funds) can't see because they're just looking at the returns on their investments,” Brosseau said in a Tuesday morning television interview.

“(They’re) missing out on the economic impact of the investments on the local economy, which is considerably larger… the wellbeing of the pensioners has something to do with the wellbeing of their incomes.”

Brosseau said he acknowledges that the fundamental responsibility of a pension plan is to secure the best returns for those who have paid into it, but added that “the question is then how this responsibility is filled.”

He said the Canadian stock market has outpaced most other emerging global market economies over the past 30 years and has been competitive against U.S. markets in recent decades if the “Magnificent 7” are removed.

“(For pension funds) to say that their ability to fulfil their obligations vis-a-vis their pensioners is dependent on not investing in Canada is a little bit of a stretch,” he added.

Pushback against open letter

Earlier this month, Letko Brosseau wrote an open letter to Finance Minister Chrystia Freeland and her provincial counterparts, urging them to “amend the rules governing pension funds to encourage them to invest in Canada.”

The letter was signed by nearly 100 business leaders, including Rogers CEO Tony Staffieri and Canaccord Genuity Group CEO Dan Daviau, but it has since been opposed by a number of other stakeholders.

Jim Leech, former president and CEO of the Ontario Teachers' Pension Plan, told BNN Bloomberg last week that pension funds must remain independent of government to guarantee the best returns for Canadians.

Brosseau said he finds those kinds of counterarguments to his firm’s point of view “quite constructive,” as they have opened a dialogue and allowed people to examine all sides of the issue.

“One of the objectives of the open letter was to initiate the discussion, and it's a very important discussion for Canada because of the size that this savings pool represents,” he said.

“It's in fact the largest institutional savings pool in Canada, and the only one that can take on the type of long-term equity risk that's required to build the country… we have to pay attention to this.”

'Canada needs a lot of investment'

Brosseau said that Canada lags behind the U.S. and its other G7 peers when it comes to domestic investment of any kind, which has created a competitive disadvantage and hampered Canadian economic output.

“Canada needs a lot of investment. We invest 10 per cent of GDP (gross domestic product) in non-residential investments; that's 30 or 40 per cent less than the U.S. does,” he said.

“For every dollar we invest in startups, the U.S. invests $40. In research and development, we're ranked amongst the lowest in the G7… so Canada has a lot of things to do.”

Brosseau argued that with that in mind, finding reasons to keep investment dollars at home shouldn’t be hard for Canadian pension funds, considering the many economic advantages Canada already has.

“Canada is the largest democratic country in the world by landmass, it's rife with resources, it has a well-educated population and its government and legal systems are sound,” he said.

“So if you can't find a way of making money with that… I don't know.”

Vale to negotiate financing with US government for iron ore briquette plant

Reuters | March 25, 2024 | 

Railroad transporting iron ore from Vale’s Carajás complex in Brazil. Source: Vale

Brazilian miner Vale said on Monday it has been selected by the US government to begin negotiations for a potential financing for a new iron ore briquette plant in the country, according to a securities filing.


Vale said it will negotiate an award for up to $282.9 million for the project, which was selected by the Department of Energy through a program focused on technologies to reduce emissions.

The briquette, which is produced through the low-temperature agglomeration of high-quality iron ore, could be used to replace sinters, pellets and granules in steelmaking, cutting greenhouse gas emissions by up to 10% compared to the traditional blast furnace process.

Vale inaugurated its first iron ore briquette plant in Brazil in December, while it also mulls other units in its home country, as well as in Gulf of Mexico and in the Middle East.

(By Andre Romani; Editing by Steven Grattan)

How science may assist green metals exploration efforts

Staff Writer | March 26, 2024 

The inside of a wind turbine. 

(Reference image by Paul Anderson, Wikimedia Commons.)

A recent paper in the journal Science Advances sheds new light on how concentrations of metals used in renewable energy technologies can be transported from deep within the earth’s interior mantle by low-temperature, carbon-rich melts.


The article details how an international team led by Isra Ezad, a postdoctoral research fellow at Australia’s Macquarie University, carried out high-pressure and high-temperature experiments creating small amounts of molten carbonate material at conditions similar to those around 90 kilometres depth in the mantle, below the earth’s crust.

Their experiments showed carbonate melts can dissolve and carry a range of critical metals and compounds from surrounding rocks in the mantle—new information that may inform future metal prospecting.

“We knew that carbonate melts carried rare earth elements, but this research goes further,” Ezad said in a media statement. “We show this molten rock containing carbon takes up sulphur in its oxidized form, while also dissolving precious and base metals—‘green’ metals of the future—extracted from the mantle.”

Most of the rock that lies deep in the planet’s crust and below in the mantle is silicate in composition, like the lava that comes out of volcanoes.

However, a fraction of a percent of these deep rocks contain small amounts of carbon and water that cause them to melt at lower temperatures than other portions of the mantle.

These carbonate melts effectively dissolve and transport base metals like nickel, copper and cobalt; precious metals, including gold and silver, and oxidized sulphur, distilling these metals into potential deposits.

“Our findings suggest carbonate melts enriched in sulphur may be more widespread than previously thought, and can play an important role in concentrating metal deposits,” Ezad said.

To run their experiments, the researchers used two natural mantle compositions: a mica pyroxenite from western Uganda and a fertile spinel lherzolite from Cameroon.

Ezad explained that thicker continental crust regions tend to form in older inland regions of continents, where they can act as a sponge, sucking up carbon and water.

“Carbon-sulphur melts appear to dissolve and concentrate these metals within discrete mantle regions, moving them into shallower crustal depths, where dynamic chemical processes can lead to ore deposit formation,” the scientist pointed out.

In her view, this study indicates that tracking carbonate melts could give us a better understanding of large-scale metal redistribution and ore formation processes over earth’s history.

“As the world transitions away from fossil fuels to battery, wind and solar technologies, demand for these essential metals is skyrocketing, and it’s becoming harder to find reliable sources,” Ezad said. “These new data provide us with a mineral exploration space previously not considered for base and precious metals—deposits from carbonate melts.”