Tim Hortons to stage theatrical production

DANCING COFFEE CUPS AND DONUTS (WITH SPRIKLES)

Tara Deschamps, The Canadian Press   Apr 25, 2024

In the last year, Tim Hortons has treated cottaging Canadians to a boat drivethru, revived its beloved Dutchie doughnut and launched flatbread pizzas.

But perhaps its biggest surprise will come this summer, on the heels of its 60th anniversary on May 17, when it enters a realm so unexpected for a fast-food giant that even its executives expect some people’s first reactions to be, “What?!”

The head-scratcher will come in the form of "The Last Timbit," a musical for which Tim Hortons has assembled a who’s who of Canadian artists to stage at the Elgin Theatre in Toronto this June.

The production is loosely based on a 2010 snowstorm that was so bad, drivers on a highway east of Sarnia, Ont., were forced to hunker down in cars and others had to wait out the inclement weather at a local Tim Hortons.

Turning the story into a theatrical production was the brainchild of Gut, a marketing firm Tims hired to help it conjure up a way to celebrate its milestone year.

Tims was determined to give Gut as much room to be creative as possible, so it didn't even specify the firm had to come up with an event. All the chain said was to find "something with heart" and that would reflect the relationship the fast-food eatery has with its customers, recalled the chain's chief marketing officer Hope Bagozzi.

When she was pitched on a play, even she was surprised.

“What on earth would we know about pulling something like this together ... in a really highly professional way,” she said was her reaction.

“Our agency, that’s not their specialty. It’s certainly not ours.”

Despite it being new territory and Tims having to wrangle talent well outside its comfort zone, she felt “cautiously optimistic” about the idea.

“It’s a little wacky but certainty it felt grand (and) of the kind of ambition we had," she said.

So Bagozzi and her staff set about making it happen.

Among their first calls was Michael Rubinoff, a Toronto lawyer and theatre producer who turned the story of passengers on planes diverted to Gander, Nfld. after the 9/11 attacks in New York into hit musical "Come From Away."

“We didn’t imagine that he would actually come on board. We just thought we would try to pick his brain on, 'Are we crazy? Should we do this? How would we go about it?'” Bagozzi recalled.

Rubinoff wasn’t fazed by the unlikely caller. Though many would assume he was shocked to hear a fast-food brand wanted to jump into theatre, he didn’t find it unusual because “Tims has been part of Broadway for many years.”

“The Tims logo is on one of the backdrops in 'The Book of Mormon' that people don’t realize and of course, in the musical I’m involved in, 'Come From Away,' Tims plays a really important part,” Rubinoff said.

“After the opening number, the first line is ‘I start my day at Tim Hortons’ and we have a scene in the Tim Hortons and we come back to it, so Tim Hortons in musical theatre didn’t seem as outlandish to me as it might have to other people.”

Alongside Rubinoff, other talent started flowing in.

Nick Green, the playwright behind "Casey and Diana," wrote the script and Anika and Britta Johnson of "Life After" created the music and lyrics, which include a song called "What would you do for a Timbit?"

The cast features Stratford and Shaw festival regulars Andrew Broderick and DeAnn deGruijter, as well as Broadway stars Kimberly-Ann Truong, Jake Epstein and Chilina Kennedy.

Most were surprised Tims, which is spending the year focused on expanding its afternoon and evening sales, was behind the play. Once they saw the calibre of theatrical talent on board, they realized "this is going to be something that they're excited to attach themselves to," Rubinoff said.

The production comes as arts organizations have struggled to retain corporate funding. Last summer, Bell stopped funding the Toronto International Film Festival after 28 years of sponsorship. In March, the Bank of Nova Scotia ditched its title sponsorship of the Contact Photography Festival in Toronto.

Hot Docs, Canada's largest documentary film festival, has also warned its future is in jeopardy.

Such struggles have not been lost on Rubinoff, who called "The Last Timbit" a "major investment."

"We only get better and we only strengthen those skills when we have the opportunities to actually do the thing, and this is the opportunity to do the thing," he said.

He's approaching the project with the same seriousness as he does any other theatrical production. There's been months of perfecting the script and table reads and soon, rehearsals will begin.

The music has already become an earworm.

"These songs have been on loop. I am telling you I can't sleep without hearing the songs," he said. "I wake up hearing the song, so I know that it's a great sign."

While he doesn't want to give away too many hints about the tunes or the play's plot, he said at the core of the storyline is a mother and daughter impacted by the storm. (The last Timbit they will vie for is a birthday one.)

And though the play is meant to mix humour and heart, he said, "nobody will dress up and dance like a Timbit, but I don't want to say no to anything."

That includes touring with the production, which will premiere in front of Tims franchisees visiting Toronto and then continue with five shows for the public. Tickets go on sale Friday.

Those who snag seats will be able to buy Tims-centric merchandise from Roots Corp., which doubles as the play's wardrobe partner, and will likely find a concession stand of Tims favourites, including Timbits, Bagozzi said.

"Those won't dance away," Rubinoff chimed in. "You can enjoy them."

This report by The Canadian Press was first published April 25, 2024.

 

U.S. election uncertainty making 'very difficult' freight market worse, TFI CEO says

Christopher Reynolds, The Canadian Press

The head of Canada's biggest trucking firm says the U.S. election is softening an already

 weak market for freight. A transport truck carries a cargo container at port in Vancouver,

 on Friday, July 14, 2023. , THE CANADIAN PRESS/Darryl Dyck

The head of Canada's biggest trucking firm says the upcoming U.S. election is straining an already weak market for freight.

Uncertainty over the outcome of the political contest this fall means some customers are holding off on shipments until the result becomes clear, Alain Bédard, chairman and CEO of TFI International Inc., said Friday.

On a conference call with analysts, Bédard gave the example of a green energy company spun off from General Electric, claiming GE Vernova's wind turbine business could suffer depending on who wins after ballots are cast on Nov. 5.

"If it's candidate one, he's against windmills, so that business is going to fall. If you take the No. 2 guy, well he likes windmills, he's more green. So that's why we have these kinds of customers just sitting on the fence not knowing where the ball is going to drop — left or right,” Bédard said.

“We still anticipate this freight recession will not change probably before ’25. We have an election year in the U.S. A lot of our customers are just waiting to see what's going to happen.”

GE Vernova did not respond to a request for comment.

A tough trucking environment in general has also hurt transport companies, the chief executive said, resulting in a seven per cent year-over-year drop in adjusted earnings per share in TFI's first quarter, below analysts' expectations.

"Why is that? Because the truckload in Q1 was just a disaster," he said. “It's a very, very difficult market right now.”

Bédard was referring to the "truckload" segment of the business that carries full loads to a client, as opposed to "less-than-truckload" deliveries that make multiple drops of cargo for different clients on a single run.

Employment in trucking and logistics fell by about 38,000 jobs between 2021 and the end of last year, according to industry non-profit Trucking HR Canada.

The Conference Board of Canada has said household debt will hamper consumer spending this year, as Canadians' penchant for online purchases continues to taper off from pandemic highs, leaving shippers in the lurch.

Bédard said rampant undercutting of labour laws by some trucking outfits has harmed TFI to the point where he is mulling a sale of one of its components.

Asked by an analyst whether he would dispose of its ailing Canadian truckload division, Bédard replied: "We're asking ourselves that question."

Bédard called the phenomenon known as Driver Inc. a “cancer” for legitimate trucking companies as rule-breaking rivals gain a competitive advantage.

Driver Inc. refers to the misclassification of workers as self-employed, which means the company does not provide benefits or basic labour protections.

“Our Canadian business will shrink, absolutely, because of Driver Inc.," he said. "People will lose jobs — good-paying jobs — at TFI because of that Driver Inc. unfair competition."

The mislabelling of contractors who drive for only one company and do not own their trucks or control their own schedules is illegal — and risky, since workers do not receive basic entitlements such as workers' compensation, paid sick leave, overtime or severance.

"They don't pay any benefits to their drivers. That is really killing us," Bédard said.

He added that he believes provincial and federal leaders will crack down on scofflaws, but noted the problem has persisted despite years of warning calls from the industry.

In the federal budget this month, the government reiterated its pledge from a year earlier to amend the Canada Labour Code to bolster job protections for federally regulated gig workers. The effort would strengthen bans on employee misclassification, according to the Canada Revenue Agency.

Other challenges lie ahead for TFI, including the integration of Daseke Inc. 

TFI closed its purchase of the Texas-based flatbed trucking company for about $1.1 billion earlier this month in a move that bolsters its fleet of 11,000-plus trucks by more than 40 per cent.

“It’s not a disaster. It’s not UPS Freight, where these guys were losing money," Bédard said of an acquisition from 2021. But he criticized Daseke's former head office: "Those guys were costing a fortune and the results were not there."

Last year, TFI snapped up JHT Holdings in August. The addition drove up revenue in TFI's logistics segment by 24 per cent year-over-year — the only one to see an increase last quarter.

Despite its acquisitions — six in the past 12 months — net income fell 17 per cent year-over-year to $92.8 million in the quarter ended March 31. Revenue nudged up one per cent to $1.87 billion.

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

Documents reveal Ottawa's efforts to get Loblaw, Walmart on board with grocery code

Rosa Saba, The Canadian Press

It was evident to the federal government as early as last fall that Loblaw and Walmart might be holdouts to the grocery code of conduct, jeopardizing the project's success. 

Documents obtained through access to information legislation shed new light on the federal government’s efforts to convince the two retailers to sign the grocery code of conduct, with cracks appearing in the months leading up to a House of Commons meeting where the grocers said they couldn't sign the near-complete code.

“There are ongoing federal efforts to seek commitment from key players, including large retailers like Walmart and Loblaws, to participate in the code,” read a briefing note prepared on Sept. 22 for a meeting between federal agriculture and agri-food minister Lawrence MacAulay and Quebec agriculture and food minister André Lamontagne. 

The document, obtained through the Access to Information Act, says participation by some of the largest retailers — namely Loblaw and Walmart — is “still to be determined.”

The code of conduct is intended to set out agreed-upon rules for negotiations between industry players, including retailers and suppliers. It would also include a dispute resolution process. 

It was meant to be voluntary, but it's always been acknowledged that it needs all the major players on board to work, said Francis Chechile, a spokesman for MacAulay, in a statement. 

Until last fall, the code appeared to be progressing well, said Chechile, noting that federal, provincial and territorial governments had been closely monitoring progress and engaging with stakeholders including Loblaw and Walmart. 

“By late October, it had become evident that the hesitation from Loblaw and Walmart was such that it posed a risk to the successful implementation of a code with full industry participation," said Chechile. 

On Dec. 7, leaders from Loblaw and Walmart told the House of Commons committee studying food prices that they couldn’t commit to signing the code in its current form, citing concerns it would raise prices. 

At the meeting, Loblaw chairman Galen Weston said he stood by a letter the company had sent a month earlier to the committee developing the code. The letter said that Loblaw was worried the code could “raise food prices for Canadians by more than $1 billion." 

The Dec. 7 committee meeting served as public confirmation of the two grocers' unwillingness to sign on to the code as drafted, said Michael Graydon, CEO of the Food, Health and Consumer Products of Canada association and leader of the group that's been developing the code. However, he also said there were indications for him around October that this might happen. 

As the code neared completion, plans were underway to launch a grocery code adjudicator office.

But after the Dec. 7 comments by Loblaw and Walmart, progress on the office stalled. Work to hire an adjudicator is on hold, and a funding request for the office is in limbo, said Graydon. 

However, even before indications of the two grocers' reticence became apparent to Graydon and the federal government in October, officials were working to get the retailers on board, the documents show.

Deputy minister of agriculture Stefanie Beck, two representatives from Loblaw and three other government officials met on Sept. 22 to discuss several issues, primarily sustainable agriculture, according to a briefing note. 

But they also planned to talk about the code. The briefing note said government officials should “underscore the federal desire that all large retailers commit to the grocery code of conduct.” 

“Loblaws has not taken an active role in the industry-led process to develop a grocery code of conduct and they have been reluctant to publicly confirm support for the code until the industry proposal is finalized,” the note reads. 

The federal, provincial and territorial ministers had a call on Nov. 27 to discuss the code and the possibility that the two major retailers might not adopt it, according to a briefing note.

Though the code is meant to be voluntary, recently there have been talks of making it law instead to force everyone to participate. 

MacAulay has said that the government is “actively examining all federal options,” including legislation. 

And in a letter mid-February, the House of Commons committee urged Loblaw and Walmart to sign on, saying if they didn’t, it would “not hesitate to recommend that the federal and provincial governments adopt legislation to make it mandatory.” 

Graydon is still hopeful. 

“I don't think it's dead in the water; I think there is some really strong desire to try to find a solution,” he said. 

The group is looking at whether some of the language of the code could be changed to bring more clarity, or more prescriptiveness, said Graydon — “and there seems to be openness, at least from one of the retailers, to have those conversations.” 

Conversations with Loblaw have given the committee a chance to explain aspects of the code and see whether a solution can be reached, he said. 

“My sense is they're legitimate in their approach to try to find a solution.”

Loblaw spokeswoman Catherine Thomas said in an email the company is an “active participant in the ongoing industry process” and is optimistic a code can be finalized that everyone can support. 

Walmart Canada spokeswoman Sarah Kennedy directed The Canadian Press to previous public statements about the code by the retailer, including one from October in which the company said it’s “conscious of adding unnecessary burdens that could increase the cost of food for Canadians.”

A more recent statement from mid-February states that Walmart supports initiatives promoting fairness and reciprocity, and benefiting consumers. 

“While we have significant concerns about the code in its current form, we will continue to work constructively with the industry on this topic.”

Proponents of the code have pushed back on claims that it could lead to higher retail prices. 

The documents also show that the industry steering committee requested around $1.8 million in government funding to support the implementation of the not-for-profit grocery code adjudicator office.

A memo to the deputy agriculture minister digitally signed on June 6, 2023 describes the request for a non-repayable contribution from federal, territorial and provincial governments to support the office for its first two years, “until its revenue model is implemented and becomes self-sufficient.” 

“The majority of funding is going to come from large retailers and large manufacturers,” said Graydon, though the group has planned for scenarios in which not all major players sign on right away. 

“Hopefully, it's the opposite, everybody's in, everybody's early, we get the funding that we require, and we can reduce the requirements in regards to any sort of contribution from government,” he said.

Chechile confirmed that “officials are awaiting the outcome of industry discussions before taking further steps” related to the funding request. 

With files from researcher Ken Rubin in Ottawa

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

Imperial Oil marks record Q1 production at Kearl ahead of Trans Mountain start

The Canadian Press

The Imperial Oil logo is shown at the company's annual meeting in Calgary, 

. (THE CANADIAN PRESS/Jeff McIntosh)

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Imperial Oil Ltd. pushed its Kearl oilsands project to record production for its first quarter as it continues to ramp up output ahead of the opening of the Trans Mountain pipeline expansion.

The company averaged production of 277,000 barrels per day at the project, up about seven per cent from the same quarter last year.

"I'm very pleased to report that we sustained the strong operating momentum from the past several quarters," chief executive Brad Corson told analysts on a conference call discussing the company's latest results on Friday.

Overall, Imperial's production rose by a more modest two per cent from last year to an average of 421,000 oil-equivalent barrels per day in its latest quarter as both Cold Lake and Syncrude saw production drop. Output was also off its highest-ever production of the equivalent of 452,000 barrels per day last quarter, due mostly to seasonal factors, Corson said.

Imperial, majority-owned by U.S. giant Exxon Mobil, has been working for some time to improve productivity and lower costs at Kearl, which is located north of Fort McMurray, Alta.

A major piece of that work was Imperial's multi-year effort to convert its entire fleet of heavy haul mining trucks at Kearl to fully autonomous operation. The company announced the completion of the initiative last fall.

The ramp up comes as the May 1 scheduled commercial start date for the Trans Mountain expansion approaches, which is helping lower the discount on Canadian crude, Corson said.

The narrowing differential between the U.S. benchmark WTI crude price and Canadian WCS helped offset a softening in oil prices, he said.

"A key factor is the approaching start up of TMX, which will provide significant additional capacity for egress out of the western Canadian basin," Corson said.

The production and pricing changes led to a first quarter profit of $1.20 billion, down from its best-ever first quarter last year that had profits of $1.25 billion.

The company said the profit amounted to $2.23 per diluted share for the quarter ended March 31, up from $2.13 per diluted share in its first quarter last year when it had more shares outstanding.

Total revenue and other income amounted to $12.28 billion, up from $12.12 billion in its first quarter of 2023.

Refinery throughput for the quarter averaged 407,000 barrels per day, down from 417,000 barrels per day in the first quarter of 2023, while refinery capacity utilization was 94 per cent, down from 96 per cent.

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

Precision Drilling seeing boost in demand as Trans Mountain start nears

The Canadian Press

The completion of the Trans Mountain pipeline expansion is leading to a boom in demand for drilling services, said Precision Drilling chief executive Kevin Neveu.

The contract driller is seeing demand exceed its expectations, he said on an earnings call Thursday, as the expansion of the crude oil pipeline to the West Coast approaches a May 1 start of commercial operations.

"Do we see customer interest increasing in anticipation of the Trans Mountain start up? The answer is resoundingly yes."

The company has 48 rigs currently operating where last year it had 38, and expects demand to continue. It also expects a boost to well servicing contracts.

"We see this momentum continuing throughout the summer and exceeding our prior view on Canadian rig demand," said Neveu.

The growth is helping offset a retreat in the U.S., where activity is more muted by weak natural gas prices and operator consolidation, he said. 

The company reported 38 active drilling rigs in the U.S. for its first quarter compared with 60 for the first quarter of 2023.

In Canada, Precision averaged 73 active drilling rigs for the quarter, compared with 69 a year earlier.

The decline in U.S. activity helped lead its first-quarter profit to come in at $36.5 million, down from $95.8 million a year ago.

The company says the profit amounted to $2.53 per diluted share for the quarter ended March 31, down from $5.57 per diluted share the same time last year.

Revenue totalled $527.8 million, down from $558.6 million in the first quarter of 2023.

The company is focused on cost reductions, paying down debt and returning profits to shareholders, said Neveu.

Precision is also investing in automated rig technology that could mean future rises in demand won't lead as much to booms in employment.

The system has several more months ahead of field hardening before it's commercially ready, but so far it's working better than expected, said Neveu. 

"We'll eliminate human work from the red zone on the drill rig floor and in the mast, while ensuring our customers safe, consistent, predictable and highly efficient rig floor performance."

This report by The Canadian Press was first published April 25, 2024.

 

'Good luck with that': PM says Saskatchewan premier shouldn't pick fight with CRA

The Canadian Press

Prime Minister Justin Trudeau says the Canada Revenue Agency is "very, very good" at getting the money it's owed, and Saskatchewan's premier should take note of that.

Scott Moe has pledged the province will not send Ottawa the money it collects from the federal carbon price on natural gas.

That move breaks the law, and Trudeau says the CRA has ways of making sure it can collect.

On Tuesday, the prime minister said his government will keep sending carbon rebate cheques to people in Saskatchewan. 

The jurisdictional spat began when the Liberals created a temporary exemption to the carbon price for home heating oil. 

The Saskatchewan government says that's unfair and politically motivated, because the exemption has an outsized impact in Atlantic Canada.

At a press conference in Oakville, Ont., on Wednesday morning, Trudeau said the CRA has quasi-judicial powers to ensure it collects what it's owed.

"Having an argument with CRA about not wanting to pay your taxes is not a position I want anyone to be in. Good luck with that, Premier Moe," he said.

This report by The Canadian Press was first published April 24, 2024.

WORKERS CAPITAL

Canada pension fund's credit head wants to take advantage of leveraged buyout boom

Paula Sambo, Bloomberg News

Canada’s largest pension fund plans to nearly double the size of its credit holdings over the next five years, and it’s counting on an upturn in leveraged buyouts to generate some of that growth.

Andrew Edgell, global head of credit investments at Canada Pension Plan Investment Board, said the fund expects to have more than $115 billion (US$84.1 billion) in credit assets by 2029, compared with about $62 billion today. Much of that will be handled by its in-house investment team, which is prepared for a thaw in the buyout market after a couple of slow years.

“There’s pent-up demand. In discussions with sponsors, there’s a greater sense of optimism,” Edgell said in an interview. “There’s also so much dry powder that’s really pushing the LBO market to get unlocked.”

Global mergers and acquisitions rebounded in the first quarter of 2024 compared with a year earlier, driven by mega-deals in the finance, software and energy sectors. Still, there’s a long way to go before private equity firms return to the brisk dealmaking pace seen a couple of years ago, and uncertainty about interest rates remains a headwind.   

CPPIB, the manager of Canada’s national pension fund, is expected to reach $1 trillion in assets around 2030, from almost $600 billion today. It has been investing in private markets for years, and its top executives see attractive returns in plunging even deeper into private lending — which already represents about two-thirds of its credit holdings.

Less than 20 per cent of the fund’s credit portfolio is being managed by third parties, according to Edgell, though the firm maintains strong relationships with some of the world’s largest alternative asset managers. It recently committed $350 million to Blackstone Inc.’s BGreen III private credit fund for renewable power and energy infrastructure. It has also provided financing to support acquisitions led by Carlyle Group Inc., KKR & Co. and CapVest Partners, among others. 

 “We’ve sent the message to the market that we’re a direct lender, but we want to be pragmatic about it,” Edgell said. “And because we have direct investment expertise, we can do co-investments or work on opportunities with those partners on sizable deals.” 

CLOs Return 

A revival in the market for collateralized loan obligations could provide another boost to deal activity, Edgell said. New-issue CLOs have increased 53 per cent compared with 2023, Bloomberg News reported last week. “CLOs are being issued again, which improves the LBO math,” Edgell said.

CLOs are divided into tranches, with the senior portion rated as investment grade, the mezzanine part below that and an equity slice making up the riskiest layer. Big buyers of the senior tranche — typically more than 60 per cent of the instrument’s structure — had backed off for a while, given their ability to lock in rich yields from more vanilla debt instruments.

Still, without a lot of LBO activity yet, lenders are “clamoring” to compete for the transactions that come up, Edgell said. As deal flow increases, “we’ll get to a more natural balance and you won’t have lenders having to do silly things,” he said.

Competition among lenders is bringing down spreads for issuers in general, even if the total cost of borrowing is still elevated due to high interest rates, Edgell said.

Issuers that are only concerned about price may choose between private credit and other sources of capital, he said. The best private credit managers however will develop long-term relationships with sponsors and earn loyalty from issuers that may be willing to pay a little bit more in return for flexible loan terms, he said. 

“It’s more fit-for-purpose for their business plan. And they know that if something goes sideways, then they know who they’re dealing with,” Edgell said. “They know they’re dealing with a partner that has capital.”

The potential risk in private credit is concentrated in smaller firms that haven’t been around for long, he said. But, he said he doesn’t see any systemic risks in the asset class.

“One thing to keep in mind is the move to private credit is actually a great thing for the capital markets because it matches the assets with a more suitable liability. And even when there’s leverage used, it’s very little leverage,” Edgell said.