Developers to get cheap land leases in Canadian homebuilding push

Laura Dhillon Kane and Brian Platt, Bloomberg News

Prime Minister Justin Trudeau’s government will provide low-cost leases of public land to developers and push factory construction of homes as part of what it calls a “historic” plan to alleviate Canada’s housing crisis.

Companies that agree to build affordable homes will gain access to “surplus, underused, and vacant lands” owned by the public, the government said, while providing few specific details. The prime minister’s housing strategy, published on Friday, also includes low-interest loans for homeowners who want to add basement suites or laneway houses to their properties. 

The strategy should allow the country to build about 3.9 million homes by 2031, Trudeau said at a news conference. That would exceed the 3.5 million that the Smart Prosperity Institute has estimated is needed — if provinces and local governments join the initiative with “serious ambition,” Housing Minister Sean Fraser said in an interview.

There were two other points in Canada’s history when it faced a housing shortage close to the current scale, Fraser said. One was following World War II, when soldiers returned and displaced people flooded the country; the second was a generation later, when the baby boomers came of age and needed to house their growing families.

In both instances, the country stepped up to increase its housing stock. But after decades of underinvestment, combined with a growing population, Canada may be facing its biggest housing-supply challenge yet, in Fraser’s view

The federal government is the country’s largest landowner, but Fraser said it is opting for leasing land rather than selling it to keep it public and to retain more control over what gets built. The government says it will work with homebuilders and housing providers to build “on every possible site across the public portfolio.”

“This is the most ambitious plan to build houses in the history of Canada,” Fraser said. 

But many parts of the housing strategy need buy-in from provinces and cities — including use of land they own as well. Some premiers, including Quebec’s Francois Legault, have already balked at intrusions into their jurisdiction.

A statement from Conservative Leader Pierre Poilievre’s office pointed to Canada’s housing record under Trudeau, including that it now takes 25 years to save for a down payment in Toronto according to National Bank. Poilievre has promised to incentivize cities to build more housing and penalize those that don’t.

The government’s plan also contains an “industrial strategy for homebuilding,” focusing on prefabricated homes, including 3D-printed properties. This element of the strategy includes a previously announced design catalogue to speed construction and earmarking $500 million in low-cost loans for innovative apartment projects.

Here are some of the other new measures in the housing plan: 

• Temporarily increasing the capital cost allowance tax rate to 10 per cent from four per cent to boost builders’ returns
• Creating a new program to allow homeowners to access up to $40,000 in low-interest loans to add a secondary suite to their homes
• Adding $50 million to a foreign credential recognition program to recognize newcomers’ expertise in residential construction and boosting training and apprenticeship programs to help Canadians join the skilled trades
• Consulting on a plan to restrict the purchase and acquisition of existing single-family homes by large corporate investors
• Consulting with the mortgage industry on making a tool available through the Canada Revenue Agency to verify borrower income for mortgages, in an effort to combat fraud
• Investing an additional $1 billion over four years in a program called Reaching Home, which provides funding to communities to help address homelessness

Trudeau has made a series of announcements in advance of the government’s April 16 budget related to helping younger Canadians with high housing costs. The lack of affordability has become a key political issue, helping to sink Trudeau’s popularity among under-40 voters. 

Previously announced measures in the housing strategy allowing first-time homebuyers 30-year amortization periods for mortgages on newly built homes and a fund for provinces to help pay for infrastructure if they agree to allow more dense housing.

Young Canadians squeezed by housing turn away from Trudeau

Laura Dhillon Kane, Bloomberg News

Prime Minister Justin Trudeau swept to power in 2015 with the help of younger Canadians captivated by his positive messaging and socially progressive views. That same group of voters may eventually be his undoing.

Trudeau’s chief rival, Conservative Leader Pierre Poilievre, has been making huge gains with younger voters since he began attacking the prime minister forcefully on the cost of housing. In public opinion polling, the Conservatives now lead Trudeau’s Liberal Party by a 2-to-1 ratio among voters 18 to 29.

It’s been a dramatic fall for a prime minister who was the second-youngest ever to take office, who pledged to address youth issues and even appointed himself youth minister. While he fulfilled promises to legalize recreational cannabis and implement stronger climate policies, those issues have fallen down the list of priorities for young people.

One number helps illustrate his problem with voters in their twenties: 60 per cent. That’s the increase in national home prices since he took office. 

“If you can’t get into the housing market and you’re still living with mom and dad, that’s probably impacting your day-to-day quality of life more than X, Y, Z progressive social policy,” said Andrew Perez, a 37-year-old longtime Liberal volunteer and strategist and principal at Perez Strategies.

Support for Trudeau’s Liberal Party among 18- to 29-year-olds has averaged just 20 per cent over the past three months, trailing the Conservatives at 40 per cent and the left-leaning New Democratic Party at 25 per cent, according to weekly surveys by Nanos Research Group. The Liberals are also doing poorly among those 30 to 39 years old.

Provincial and local governments have much of the responsibility for where and how housing gets built in Canada, not the federal government. Still, Trudeau is keenly aware of his vulnerability on the issue and has been fighting back.

The government made a series of announcements ahead of the finance minister’s April 16 budget, most of them focused on improving housing affordability for Generation Z and millennials. The prime minister kicked it off in March in Vancouver — a key electoral battleground — standing behind a podium that bore the words “Fairness for Every Generation.” He’s set to unveil a new plank in his housing strategy Friday.

The Nanos data shows an eight-point jump for the Liberals among the youngest group of voters in the week after the announcements began, though it’s too short of a time period to see a trend. Overall, it’s a clear deterioration from Trudeau’s election in October 2015, when his party commanded 39 per cent of this voter bloc.

Jaide Kassam, 22, said she voted Liberal in the past mostly because her parents did. Now, after an internship with Ontario’s conservative-leaning provincial government, she found she identified more with conservative values, and now backs Poilievre. He’s doing more to appeal to young workers and students, she said.

While Kassam is hopeful she’ll be able to own a home one day, many members of Gen Z are less optimistic — and considerable doom and gloom has set in among millennials in their 30s. Perez said most of his peers in white-collar jobs aren’t homeowners, mainly because their parents can’t help with a down payment — a generational transfer of wealth increasingly viewed as necessary to enter the property market in Canada.

Urban, socially progressive Canadians who previously voted Liberal are now ready to “roll the dice on a right-wing, populist government,” Perez observed in an opinion piece published in the Toronto Star. Their values don’t actually align with Poilievre’s brand of “aggressive conservatism,” he argued, but they don’t see a path to economic mobility under the current government.

David Coletto of Abacus Data, whose polling has also shown the Liberals bleeding support among young people, pointed out that Poilievre is doing so well across all age groups that he doesn’t necessarily need to mobilize the youth vote in order to win — if his support holds until an election that’s due in 2025.

But winning among young people would be a “feather in his cap,” Coletto said.

A separate Nanos poll for Bloomberg showed that cost of living and housing affordability were the most important issues to voters under 35. The survey of 1,069 Canadians between March 31 and April 1 has a margin of error of 3 percentage points, 19 times out of 20. There are also margins of error involved in narrowing down polls to specific demographics.

Chief data scientist Nik Nanos said the results were worrying for the prime minister. “Considering the Trudeau Liberals built their coalition in 2015 on younger voters, trailing on these issues is a serious political disadvantage.”

 

Asking rent prices in March up 8.8% from year ago, but down from February: Urbanation

The Canadian Press

A new report says the asking rent for a home in Canada in March was up 8.8 per cent compared with a year ago, but down from February.

The report by Urbanation, which analyzes monthly listings from Rentals.ca, says the average asking rent for all home types was $2,181 last month.

On a month-over-month basis, asking rents in March were down 0.6 per cent.

Based on the report, the average asking rent for a one-bedroom unit in Canada was $1,915, up 11.3 per cent from a year ago, while the average asking price for a two-bedroom was $2,295, up 10.6 per cent from March 2023.

Overall, asking rents for purpose-built rental apartments in March increased 12.7 per cent compared with a year earlier to reach an average of $2,117. Condominium apartment rents averaged $2,321, up 3.9 per cent from March 2023.

The federal government has vowed to tackle the increasing financial pressure renters are facing. Late last month, Prime Minister Justin Trudeau announced a bill of rights for renters, among other supports.

The bill of rights, to be developed and implemented in partnership with provinces and territories, would require landlords to disclose a clear history of apartment pricing "so renters can bargain fairly."

The measures would also make sure rental payment history is taken into account on credit scores, giving first-time buyers a better chance at getting a mortgage with a lower interest rate.

The increase in the national average came as the average asking rents for purpose-built and condominium apartments in B.C. fell 1.9 per cent year-over-year to $2,494.

Ontario had the second highest average asking rents last month, edging up 0.4 per cent from March 2023 to reach $2,410.

Alberta and Saskatchewan posted the fastest-growing rents, with total average asking prices up 18.3 and 18.2 per cent annually last month, respectively, to reach $1,728 and $1,297.

On a municipal basis, average asking rents in Vancouver moved down 4.9 per cent to $2,993 last month. While Vancouver rents remain the highest among Canada’s largest cities, it marks the first time since July 2022 that they fell below the $3,000-level.

Toronto's average rental prices also declined 1.3 per cent to $2,782, representing the third consecutive month of annual rent declines.

The strongest rent growth among Canada’s largest cities was in Edmonton, reaching an average of $1,507 in March — a 15.9 per cent gain from the same month in 2023.

This report by The Canadian Press was first published April 12, 2024.

 

Boeing shares on longest losing streak since 2018

Esha Dey, Bloomberg News

The turmoil at Boeing Co. has put the planemaker’s shares on their worst run since its 737 Max aircraft was involved in a deadly crash off Indonesia five years ago. 

The recent troubles started early this year after a panel covering an unused door blew out mid-air during an Alaska Airlines flight. The near-calamity has led to regulatory probes, a sweeping management overhaul and a wider lack of confidence in the company’s safety controls. 

That’s fueled a retreat from Boeing shares that’s pushed them down 35 per cent this year, making it the second worst performer on the S&P 500 Index. 

On Friday, the stock dropped for the 10th straight session, marking its longest losing streak since November 2018. Just this month, Boeing reported its lowest deliveries in the first quarter since mid-2021, and an engineer at the company made allegations that brought its 787 Dreamliner aircraft under scrutiny as well. 

“Boeing’s first-quarter delivery announcement confirmed what the market has come to accept over the past two to three months, which is that the pace of activity at its Commercial Airplanes segment is slow,” Seth Seifman, an analyst at JPMorgan Chase & Co., wrote in a note on Thursday. 

“The path forward on production is not very clear, and while demand should allow for significant growth over time, investors should keep nearer term expectations in check,” the analyst added. Seifman lowered his price target on the stock, but kept his buy-equivalent rating.

Read more: Boeing Hit by Damning FAA Report Faulting Safety Culture

Overall, Wall Street analysts are turning cautious. The share of buy recommendations on Boeing shares is now at the lowest since November 2021, hold ratings have almost doubled this year and the average price target has fallen 14 per cent, according to data compiled by Bloomberg.  

Meanwhile, earnings expectations have tumbled. Analysts’ average 2024 adjusted profit estimates have dropped a staggering 83 per cent over the past year, while revenue expectations have taken a 5 per cent cut. 

“A lower multiple is justified given uncertainty and risks related to the management change and ongoing investigations,” said Ronald Epstein, an analyst at Bank of America Corp. “Further, we feel there is downside risk to our cash flow projections.” Epstein also lowered his price target on Boeing this week. 

Still, despite all the chaos and challenges, analysts say the longer-term outlook for the company remains bright. That explains why even after this year’s continuous barrage of negative headlines, buy ratings still comprise more than 60 per cent of all recommendations on the stock. 

Boeing’s advantage is that demand is expected to stay in its industry, with the order book for top competitor Airbus SE already sold out into the end of the decade. And entering the plane-making business isn’t an easy one, which rules out the possibility of any sudden new rival. 

“The company will be able to continue to benefit from the robust global air travel demand environment and, in the long run, benefit from improved quality assurance,” BofA’s Epstein said. “In the short- to medium-term, however, there are risks.”

 

World's top fertilizer maker plans exit from Argentina, Chile

Kim Chipman and Jonathan Gilbert, Bloomberg News

Work is done on Nutrien Tower in Saskatoon, Sask., Friday, June 25, 2021. , THE CANADIAN PRESS/Liam Richards

Nutrien Ltd., the world’s largest maker of fertilizers, said it is seeking to sell its retail operations in Argentina, Chile and Uruguay in order to focus on Brazil and other global markets.

The Canadian company is prioritizing key markets in a bid to boost returns for investors, a spokesperson said in an emailed statement to Bloomberg. 

Nutrien, which has been in South America for more than a quarter of a century, is working to recover after sharply missing profit expectations in the last three months of 2023 amid plunging fertilizer prices that hurt retail results. 

The company said in its annual report that Argentina’s currency controls meant it lost money when it transferred currency out of the country because it had to use a more expensive exchange rate. New President Javier Milei has promised to scrap the controls as he seeks to deregulate the economy.

Its exit from the Argentine retail business comes as the country seeks to cheapen the herbicide and fertilizer market for farmers by reducing import taxes on both inputs. 

Other companies have also abandoned Argentina’s tough business environment in recent years, including HSBC Holdings PLC and Walmart Inc. Bayer AG ditched its Argentine soy seed business in 2021.

Nutrien didn’t say what it’s planning to do with its 50 per cent stake in Profertil SA, a urea and ammonia manufacturing venture it has with Argentina state-run oil company YPF SA. YPF, under new management appointed by Milei, is looking to divest assets to focus on shale drilling.

Nutrien on Friday said it would continue to support all customers and partners through its divestiture process.

Tesla executive Baglino leaves as Musk loses another top deputy

Ed Ludlow and Dana Hull, Bloomberg News

The departure of Baglino is likely to reinforce concerns among some investors about succession planning at Tesla.

, Bloomberg

Two of Tesla Inc.’s top executives have left the carmaker in the midst of its latest round of job cuts, according to people familiar with the matter.

Senior Vice President Drew Baglino resigned from the company, according to one of the people, who asked not to be identified because the information is private. He’s been one of just four named executive officers at Tesla, leading engineering and technology development for its batteries, motors and energy products. 

The 18-year company veteran — who co-hosted earnings calls and shared the stage with Chief Executive Officer Elon Musk at multiple events, including Tesla’s investor day just over a year ago — is leaving along with Rohan Patel, Tesla’s vice president of public policy and business development.

Tesla and Musk didn’t respond to requests for comment. The carmaker’s shares dropped more than 3 per cent shortly after the start of regular trading Monday. The stock has fallen 33 per cent this year.

The shake-up coincides with Musk announcing the decision to cut headcount by more than 10 per cent globally amid the deteriorating outlook for electric-vehicle sales. The CEO lost another top deputy in August, when Zachary Kirkhorn stepped down as CFO after 13 years with Tesla.

The departure of Baglino is likely to reinforce concerns among some investors about succession planning at Tesla, where Musk has been CEO since 2008. The billionaire leads six other companies and doesn’t devote his full time or attention to the world’s most valuable automaker. Musk also said early this year that he preferred to build products elsewhere unless he’s awarded around 25 per cent voting control.

Musk’s biographer, Walter Isaacson, described Baglino as a personable engineer with an easy laugh. In his book on Musk published last year, Isaacson recounted a tense first meeting Baglino had with the CEO over how many battery cells Tesla would need to hit its range target.

“I never want to be in another meeting with Elon,” Isaacson quoted Baglino saying to Tesla co-founder J.B. Straubel, who left the company in 2019 but joined its board of directors last year.

Isaacson writes that Straubel reassured Baglino, who’s quoted saying that Musk’s battery-cell calculation proved correct.

Baglino has netted about $96 million from periodic share sales since he was appointed a senior VP and had to start publicly disclosing his transactions, according to Bloomberg calculations. The sales have been executed under multiple pre-arranged trading plans, filings show.

Baglino and Tesla’s board chair, Robyn Denholm, set up share-trading plans late last year allowing them to sell significant sums of stock. Baglino made arrangements to potentially sell up to 115,500 shares through the end of this year, according to a regulatory filing.

DEI

Rogers investors advised not to support heir Edward as chair

Thomas Seal, Bloomberg News

Rogers Communications Inc. investors shouldn’t vote in favour of the reappointment of Chairman Edward Rogers because there aren’t enough women on the telecommunications company’s board, two proxy advisory firms said.

Only three of 14 directors on this year’s director slate are women — short of the minimum target of 30 per cent set by proxy advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co. 

In January, Martha Rogers and Melinda Rogers-Hixon stepped down from the board as part of a settlement to a long-running feud with Edward Rogers. The three are the children of late founder Ted Rogers; Edward holds sway over the company, which is Canada’s largest wireless provider and owns extensive cable television and sports assets. 

Glass Lewis said shareholders should withhold their votes for three other directors as well as Rogers: Trevor English, Robert Gemmell and David Robinson. ISS advised withholding votes for English and real estate magnate Michael Cooper — in the latter case because it believes he’s on too many other boards.

ISS advised shareholders to vote against the company’s restricted share unit plan because of the extent of director participation. It also gave an additional reason for withholding support from Edward Rogers — he’s a controlling shareholder while also sitting on the board nominations committee.

A representative for Toronto-based Rogers said nobody was available to comment on the matter. 

As in previous years, all of the proposed directors will be elected at the April 24 annual meeting because the Rogers family’s control trust holds about 98 per cent of voting stock in a dual-class share structure. 

That’s a setup Glass Lewis opposes, recommending one vote per share as a “safeguard for common shareholders by ensuring that those who hold a significant minority of shares are able to weigh in on issues set forth by the board.” For this reason, it says investors should withhold their vote for Gemmell, the governance committee chair. 

Glass Lewis also disputed Rogers’s characterization of several directors as “independent,” including former Toronto Mayor John Tory, Mohamed Lachemi, and English, the former chief financial officer of Shaw Communications Inc., which Rogers acquired last year in the biggest Canadian telecom deal ever.

The firm said nine of Rogers’ 14 proposed directors are insiders or affiliated with the company, which “raises concerns about the objectivity and independence of the board and its ability to perform its proper oversight role.” Neither English nor David Robinson — who’s a Rogers family relative — should be on the audit committee, “which we believe should consist solely of independent directors,” Glass Lewis wrote.

 

Apple faces worst iPhone slump since Covid as rivals rise

Vlad Savov, Bloomberg News

Apple Inc.’s iPhone shipments slid a worse-than-projected nearly 10 per cent in the quarter ended in March, reflecting flagging sales in China despite a broader smartphone industry rebound.

The company shipped 50.1 million iPhones in the first three months of the year, according to market tracker IDC, falling shy of the 51.7 million average analyst estimate compiled by Bloomberg. The 9.6 per cent year-on-year drop is the steepest for Apple since Covid lockdowns snarled supply chains in 2022, the researchers said.

The Cupertino, California-based iPhone maker has struggled to sustain sales in China since the debut of its latest model in September. The resurgence of rivals from Huawei Technologies Co. to Xiaomi Corp. and a Beijing-imposed ban on foreign devices in the workplace have all weighed on sales. The IDC data provides the first snapshot of the global performance of Apple’s most important product ahead of earnings on May 2.

Shares were down less than one per cent in premarket trading in New York on Monday.

The drop in iPhone shipments is significant given the overall mobile market registered its best growth in years. Smartphone makers shipped 289.4 million handsets in the period, marking a 7.8 per cent rise from the trough of a year ago, when many manufacturers were grappling with a surfeit of unsold devices. Samsung Electronics Co. regained the top spot in the March quarter, while budget-focused Transsion increased shipments by 85 per cent and Xiaomi bounced back to close the gap on second-place Apple.

“The smartphone market is emerging from the turbulence of the last two years both stronger and changed,” said Nabila Popal, research director at IDC. “While Apple has been super resilient and seen a lot of growth in shipments and share over the last few years, it will be a challenge for it to maintain the pace of growth and the peak share it saw in 2023. As the market recovers further in 2024, IDC expects Android to grow much faster than Apple.”

Prominent Apple suppliers Hon Hai Precision Industry Co., Murata Manufacturing Co. and LG Innotek Co. fell in Asia trading on Monday, amid a broader selloff on fears of escalating conflict in the Middle East.

What Bloomberg Intelligence says

• Xiaomi’s 1Q handset shipments of 40.8 million units, according to IDC, jumped 33.8 per cent year over year while both Apple and Samsung declined. Its strong handset sales were likely driven by a recovery in its overseas market and might lead to high-teens sales growth in the first quarter.

- Steven Tseng and Sean Chen, analysts

During the pandemic, Apple’s iPhone showed the greatest resilience as consumers pulled back from purchases of smartphones by most of its Android-powered rivals. That inventory buildup led to aggressive pricing by Chinese competitors like Xiaomi, which took months to deplete stocks and are now starting to ramp shipments back up. Huawei’s surprise return to prominence last year — with its own made-in-China chip and HarmonyOS operating system on the Mate 60 series — has been eroding Apple’s share of China’s premium market since August.

“Increased competition in China is a big part of Apple’s decline in Q1,” Popal said. Elsewhere, a number of regions started the year with excess iPhone inventory after heavy shipments in the final months of 2023, she added.

Average selling prices for handsets are rising, as consumers increasingly opt for premium models that they intend to hold on to for longer, IDC’s researchers found. Apple, which consistently maintains the highest ASP in the industry, has led the way in this, with consumers showing a distinct preference for its higher-tier models. Still, the company has this year resorted to unusual discounts to spur sales, with some retail partners in China taking as much as US$180 off the regular price.

In March, Apple opened a large new store in the center of financial hub Shanghai, with Chief Executive Officer Tim Cook in attendance. China is host to the company’s biggest retail network outside the U.S. and accounts for roughly a fifth of sales, largely driven by the iPhone. Many of the attendees who spoke to Bloomberg at the Shanghai event had acquired their iPhones more than two years ago. And while those Apple fans said they intended to remain within the company’s ecosystem, some said they would also consider Huawei’s Mate 60 successor or foldable device options from rivals.

Quebec employers group worried 'politicized' immigration debate will hurt jobs

Morgan Lowrie, The Canadian Press

The latest spat between Quebec and Ottawa over immigration is based on politics and not the reality of the labour market, says the head of a major employers group.

"In some ways, it's deplorable," said Karl Blackburn, president and CEO of the Conseil du patronat du Québec.

His comments come as Quebec Premier François Legault is threatening to hold a "referendum" on immigration if the federal government doesn't take rapid action to stem the rising number of temporary immigrants, which include foreign workers, international students and refugee claimants.

"The majority of Quebecers think that 560,000 temporary immigrants is too much," Legault said last week. "It’s hurting our health-care system. We don’t have enough teachers, we don’t have enough housing."

Provincial Immigration Minister Christine Fréchette said the province's demands include stronger French-language requirements in immigration programs managed by the federal government and a reduction in the number of asylum seekers and temporary workers.

While Prime Minister Justin Trudeau rejected the province's bid for full control over immigration — currently a shared responsibility — Legault said in March that his federal counterpart had showed openness to some of the province's demands, and agreed with him on the need to reduce temporary immigrants.

Blackburn, however, disagrees that there are too many temporary workers, who he said are "working in our businesses producing goods and services." Their numbers, he added, reflect the needs of the labour market and of an aging society.

He said he supports the Legault government's call to reduce the number of asylum seekers in the province because Quebec has received a disproportionate share in recent years. But he denounced the federal government's "improvised" decision to suddenly reimpose visas on some Mexican nationals earlier this year, a measure Quebec had pushed for as a way of reducing asylum claims.

He said that's already having "direct effects" on businesses by restricting their ability to bring in workers. Any subsequent measures to reduce the number of temporary workers will further hurt Quebec's economy as well as consumers who will no longer have access to the same goods and services, he said.

"It's as if our governments knowingly agreed to cause companies to lose contracts for reasons of political partisanship and not based on economic growth, which is nonsensical in a way," Blackburn said.

Politicians are unfairly blaming immigrants for shortages of housing, daycare spaces and teachers, when the real problem is government failure to invest in those areas, he added.

The long-running debate between Quebec and Ottawa has flared in recent months. Earlier this year, the premier wrote to Trudeau about the influx of asylum seekers entering Quebec, which has welcomed more than 65,000 of the 144,000 would-be refugees who came to Canada last year.

Quebec has demanded Ottawa reimburse the province $1 billion — the amount Quebec says it has cost to care for asylum seekers over the last three years.

Federal Immigration Minister Marc Miller said last week that no country would ever give up total control over immigration. But he said he and his provincial counterpart are having good discussions and agree on many matters, including limiting visas to Mexicans and protecting French.

While Legault has blamed the federal government for the “exploding” number of newcomers, the director of a research institute and co-author of a recent study on temporary immigrants says both Ottawa and Quebec have brought in measures in recent years to facilitate their arrival.

Emna Braham says the surge in temporary immigrants is due to a combination of factors, including a tight labour market, post-secondary institutions recruiting internationally, and programs by both Ottawa and Quebec to allow companies to bring in more workers.

She said numbers have now climbed higher than either level of government expected, likely because temporary immigration is administered through a series of programs that are separate from one another.

“We had a set of measures that could be justified individually, but there was no reflection on what the impact will be of all these cumulative measures on the flow of immigrants that Quebec and Canada accept,” Braham said in a phone interview.

Quebec, meanwhile, says a way to reduce the number of temporary workers is to invest in technology.

"As we know, Quebec lags behind in terms of business robotization and automation. By investing in technologies, businesses will be able to increase their productivity while relying less on temporary workers," Fréchette said in a statement Monday.

Both Braham and Blackburn point out that the high number of temporary workers in Quebec is also a result of the province’s decision to cap the number of new permanent residents it accepts each year to around 50,000, creating a bottleneck of people awaiting permanent status.

"If the government of Quebec had set its thresholds at the level they should be to meet the needs of the labour market, we wouldn't be in this situation where (there) is a significant increase in temporary workers," Blackburn said.

Braham said the moment is right for provinces and the federal government to develop a coordinated approach to immigration, and to ensure a system is put in place to ensure both long- and short-term needs are met. 

This report by The Canadian Press was first published April 15, 2024.

 

'Zombie fires' smoldering near oil and gas wells threaten Canada's drillers

Robert Tuttle, Bloomberg News

(Bloomberg) -- Leftover blazes from last year’s record wildfire season in Canada are threatening to knock out almost 3% of the country’s natural gas production.

A total of 50 so-called zombie fires still smoldering beneath layers of snow are located near oil and gas wells and other production facilities, according to government data analyzed by Bloomberg News. Those sites yield natural gas equivalent to about 80,000 barrels a day of oil in Canada’s energy heartland of Alberta alone, in addition to almost 14,000 barrels a day of crude. 

Companies most at risk of disruptions include Tourmaline Oil Corp., the country’s biggest gas driller, as well as oil-sands giant Cenovus Energy Inc. and Paramount Resources Ltd. Smaller explorers could also be affected, including closely held Westbrick Energy Ltd.

Read more: Last Year’s Wildfires Are Still Burning Under Canada’s Snow

The residual blazes underscore how Canada’s energy industry -- underpinned by an oil-sands sector that produces some of the world’s dirtiest crudes — is increasingly imperiled by climate change. Usually hot, dry weather contributed to the country’s worst-ever wildfire season last year, darkening skies over New York and other US cities. And with over 65% of Canada abnormally parched or in drought at the end of March, the nation is bracing for another smoke-filled summer. 

Canada could be facing another catastrophic fire season this year as dangerously dry conditions combine with higher-than-normal temperatures buoyed by the El Niño weather pattern, according to a government forecast. Alberta declared the start of its its wildfire season this year on Feb. 20, the earliest in recent years. Zombie fires, along with new ones, could flare up as temperatures rise throughout the spring. 

The leftover fires burn into organic matter in the earth including into peat, which smolders easily and is difficult to extinguish. The blazes from 2023 aren’t generally as much of a threat as new conflagrations that emerge, but the large number of carryover fires this year is a problem, Alberta Wildfire spokeswoman Josee St-Onge said by phone. 

“The advantage is we know them and we have been working on them for a year,’’ she said, cautioning that the province is entering a period when blazes flare up. 

A representative for Cenovus said the company is building on what it learned last year to prepare for wildfires this season, including updating its fire program and completing risk assessments to ensure areas with excess vegetation are identified and mitigated. Spokespeople for Tourmaline and Paramount didn’t immediately respond to requests for comment.

For Westbrick, which shut in as much as 30,000 barrels of oil equivalent last year, the leftover fires are not a reason to be “overly concerned,” Chief Executive Officer Ken McCagherty said by phone. Much of the vegetation that fueled last year’s wildfires has been burned off, he said.

“We’re in a far, far better position this year than last year,” McCagherty said.

Chevron Corp., Canadian Natural Resources Ltd. and Baytex Energy Corp. at times shut production equivalent to about 300,000 barrels of oil a day combined last year as blazes encroached on wells and processing infrastructure, mostly in the western shale oil and gas producing regions along the British Columbia and Alberta border. The fires scorched about 4% of the country’s forests. 

That damage was dwarfed by the fire season of 2016, when more than 1 million barrels of daily oil output was shut during a devastating blaze that razed sections of Fort McMurray — the largest city near most producers’ oil-sands operations — and caused about C$3.7 billion in insured losses, making it Canada’s costliest natural disaster.

©2024 Bloomberg L.P.