NRC should assess risks from climate change, report recommends

The US Nuclear Regulatory Commission should address potential impacts of climate change–related hazards during the licensing process for nuclear power plants, the Government Accountability Office has recommended.

The Fort Calhoun plant in Nebraska, now shut down, was at risk in 2011 when Missouri River floods surrounded the plant (Image: Ammodramus)

The Government Accountability Office (GAO) is an independent, nonpartisan agency that works for the US Congress and is responsible for investigating federal government expenditures. It was requested to review the climate resilience of energy infrastructure. Its report examines how climate change is expected to affect nuclear power plants and NRC actions to address risks to nuclear power plants from climate change.

"Climate change is expected to exacerbate natural hazards - including heat, drought, wildfires, flooding, hurricanes, and sea level rise," the GAO notes. "In addition, climate change may affect extreme cold weather events. Risks to nuclear power plants from these hazards include loss of offsite power, damage to systems and equipment, and diminished cooling capacity, potentially resulting in reduced operations or plant shutdowns."

In its new report, titled Nuclear power plants: NRC should take actions to fully consider the potential effects of climate change, the Government Accountability Office says that while the NRC addresses risks to the safety of nuclear power plants, including risks from natural hazards, in its licensing and oversight processes it does not fully consider potential climate change effects.

In compiling its report, the GAO looked at data and spoke to nuclear personnel from November 2022 to the present day. Sources included staff from the NRC, the Department of Energy, the Federal Energy Regulatory Commission, the National Oceanic and Atmospheric Administration, the Federal Emergency Management Agency and the US Forest Service. It also visited the Palo Verde nuclear power plant in Arizona and Turkey Point plant in Florida - plants that were selected on the basis of their exposure to a variety of natural hazards exacerbated by climate change - and interviewed staff.

The GAO obtained NRC data on the location of all 54 operating US nuclear power plants, as well as the 21 shut-down plants that have used nuclear fuel stored in fuel pools or in dry storage.

The report concludes: "Commercial nuclear power plants in the United States were licensed and built an average of 42 years ago, and weather patterns and climate-related risks to their safety and operations have changed since their construction. NRC has the opportunity to consider climate risks more fully and, in doing so, to better fulfill its mission to protect public health and safety."

GAO makes three recommendations to the NRC. Firstly, it should assess whether its licensing and oversight processes adequately address the potential for increased risks to nuclear power plants from climate change. Secondly, it should develop, finalise and implement a plan to address any gaps identified in its assessment of existing processes. Thirdly, it should develop and finalise guidance on incorporating climate projections data into relevant processes, including what sources of climate projections data to use and when and how to use climate projections data.

The NRC was provided with a draft report and responded with written comments for the GAO to incorporate in the final publication. The NRC said it is already implementing or planning to implement additional climate change–related review data in its processes.

The commission noted that the "layers of conservatism and defence-in-depth incorporated into the NRC's processes provide reasonable assurance regarding any plausible natural hazard ... including those that could result from climate change".

Last year, the UK's Office for Nuclear Regulation (ONR) asked site operators to complete a self-assessment questionnaire on their arrangements and resilience in relation to climate change effects. This stage aimed to understand the approach currently adopted by licensees for consideration of climate change in safety cases, including climate change projections used to define the design basis for external hazards affected by climate change. In March, it selected five sites to be taken forward to the inspection stage.

In February, ONR hosted a meeting with the French Nuclear Safety Authority (ASN), the Dutch Authority for Nuclear Safety and Radiation Protection (ANVS), and Belgium's Federal Agency for Nuclear Control (FANC) to discuss the implications of climate change on the nuclear sector.

12 April 2024

Researched and written by World Nuclear News

 

Increasing renewable energy to create more conflicts between environmental values

Bob Weber, The Canadian Press

An Alberta environmental group opposes a solar power project over concerns it would damage antelope habitat and block their migration.

Homeowners in the province are fighting a renewable natural gas proposal over fears it would hurt air quality and strengthen already powerful odours.

As Alberta slowly builds a climate change-friendly energy grid, conflicts between different environmental values are going to become more frequent, experts say.

"All energy development has impacts," said Sara Hastings-Simon, a professor in the School of Public Policy at the University of Calgary.

"As we see more development happening, there will be more conflicts."

One example is the Aira solar project near the town of Bow Island in southern Alberta.

The project would provide 450 megawatts of carbon-free electricity to the provincial grid, but opponents fear its location would damage native grasslands and block herds of antelope as they migrate north from the U.S.

"Antelope can't migrate through chain-link fences," said Cliff Wallis of the Alberta Wilderness Association.

The company has promised to build lanes for the animals to pass through. But Wallis said antelope are unlikely to use them.

"All we're doing is opening up the door to these projects and not figuring out where is the best place to put them," he said.

Further north, near the town of High River, Benita Estes has been fighting a large biodigester project that would turn manure into enough natural gas to power 6,000 homes.

Proponent Rimrock Renewables concedes the plant's odours would sometimes exceed provincial guidelines, even with the upgraded control mechanisms it recently announced. 

"Biogas (projects) are great, if they're in small areas," Estes said. "This one is a monstrosity."

The Alberta Utilities Commission, which licenses renewable power projects, is tasked with weighing environmental concerns against each other. It recently turned down a solar project over concerns about impacts on native grassland.

Ryan Fournier, spokesman for Alberta Environment Minister Rebecca Schulz, said the commission is up to the job.

"Each project proponent sends the department a submission that identifies wildlife species and vital habitats, assesses species concern, details how they will meet wildlife directive standards and proposes ways to minimize the risks," he said in an email. 

But Alberta needs to unpack more of the tools it already has to manage such conflicts, said Jason Wang of the clean energy think-tank the Pembina Institute. 

He points out Alberta has been divided into seven regions for land use planning. Two of those plans have been completed and one — the South Saskatchewan plan, where most renewables development is concentrated — is about to face a 10-year review. 

"The intention of these regional land use plans was to do that sort of long-term planning with communities," said Wang. "They can be challenging, but (the province) should finish that approach."

Part of the challenge is differentiating legitimate concerns from those with a not-in-my-backyard mindset, said Hastings-Simon.

"Some of the objections to renewable energy can be traced back to groups trying to prevent renewable energy," she said. 

"If done well, renewable energy has significant less impact," she said. "But we do need to think about where that's going to be."

Wallis, with the Alberta Wilderness Association, said environmental impacts have to be understood more broadly than just climate change. 

"We're facing two crises," he said. "We don't want to trade off biodiversity to mitigate only climate change.

"We can do both if we're smart about it."

Estes said projects such as the biogas one she opposes should be regulated for what they are. 

"They're trying to sell these projects as agricultural when they're actually industrial. It's not being put on industrial-zoned land."

Craig Snodgrass, who's in the middle of such quarrels as High River's mayor, said conflicts are likely to increase as Alberta's population grows.

"Everybody's trying to do more renewable things, but there's a negative side to it as well," Snodgrass said.

"A better way to manage that, that our government could be doing a better job of, is putting people first — looking at the human being first rather than putting industry first."

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

 

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.