Waabi CEO aims to launch driverless trucks 'faster and safer than everybody else'

Jordan Fleguel, BNN Bloomberg

The founder and CEO of Toronto-based autonomous driving startup Waabi says her company is on the verge of launching driverless freight trucks that could revolutionize North American supply chains.

Raquel Urtasun told BNN Bloomberg’s Jon Erlichman at the Collision technology conference in Toronto on Wednesday that she started Waabi in 2021 with the goal of introducing cutting-edge artificial intelligence (AI) technology to the physical world.

“When I built Waabi it was really about building this next-generation technology that would enable us to go so much faster and safer than everybody else,” Urtasun said.

Urtasun, a University of Toronto professor and the former chief scientist of Uber’s self-driving unit, is widely considered a world leader in AI and machine learning research, and she’s won over some high-profile investors since Waabi’s founding.

The company announced on Tuesday that it raised US$200 million in Series B funding from backers including Nvidia Corp., Uber Technologies Inc. and Volvo AB.

Urtasun said that Nvidia’s Chief Executive Jensen Huang has taken a personal interest in Waabi, and has been a supporter of her AI research for more than a decade.

In a statement released by Waabi on Tuesday, Huang said he’s “excited to support Raquel’s vision through our investment in Waabi, which is powered by Nvidia technology.”

“I have championed Raquel’s pioneering work in AI for more than a decade. Her tenacity to solve the impossible is an inspiration.”

Waabi intends to use the investment to grow its commercial operations and expand its team in Canada and the U.S., the statement said. The company recently opened a trucking terminal in Texas and expects to officially launch a fleet of driverless trucks as soon as next year.

Capital-efficient approach

Urtasun said that while Waabi’s second round of financing was one of the largest in Canadian history, it’s a relatively small amount of invested capital compared to the company’s major U.S. competitors.

She said this is partly due to Waabi’s approach, which is more capital-efficient than other large companies that are developing autonomous driving tech, like Tesla or Alphabet Inc. through its Waymo subsidiary.

Rather than sending a fleet of vehicles on public roads for training purposes, Waabi uses a digital simulator to design and test different scenarios in order to teach its AI system how to react to real-world challenges.

The company said in the statement that this keeps costs down and gives its self-driving system “human-like reasoning, enabling it to generalize to any situation that might happen on the road, including those it has never seen before.”

Despite the recent fundraising success, Urtasun said that it makes sense for Waabi to remain a private company for the time being, but kept the idea of going public on the table.

“What is definite I can say is that there’s a lot of interest for Waabi potentially being public one day,” she said. “We will see when is the right time and if there is a right time.”

Waabi raises US$200 million to deploy driverless trucks by 2025

Tuhin Kar, Bloomberg News   

Jun 18, 2024

Autonomous driving startup Waabi Innovation Inc. has raised US$200 million from investors including Uber Technologies Inc., Nvidia Corp. and Volvo AB’s venture wing to support its deployment of driverless trucks as soon as 2025.

Toronto-based Waabi will use the investment to grow its commercial operations and expand its team in Canada and the U.S., where it recently opened a trucking terminal in Texas, the company said in a statement on Tuesday. Founded in 2021, it’s one of a handful of autonomous trucking startups, including Alphabet Inc.’s Waymo, whose Via unit specializes in freight, as well as Aurora Innovation, Gatik AI, and TuSimple Holdings Inc.

Unlike Waymo and other self-driving rivals including Tesla Inc., Waabi’s approach does not rely on the capital- and compute-intensive operation of a fleet of vehicles driving for millions of miles on public roads for training purposes. Instead, it uses a digital simulator to design and test different scenarios to teach its AI system how to handle different real-world challenges.

This approach keeps costs down and gives its AI system “human-like reasoning, enabling it to generalize to any situation that might happen on the road, including those it has never seen before,” the company said in the statement. 

Khosla Ventures led the oversubscribed funding round with Uber, with contributions from Porsche Automobil Holding SE and Ingka Investments among others. The round brings Waabi’s total funding to about $280 million.

Canada can’t meet goal of 100 per cent EV sales by 2035, automakers say

Monique Mulima, Bloomberg News   

Jun 19, 2024

Automakers in Canada say it’s doubtful there will be enough consumer demand for electric vehicles to reach the government’s target of phasing out new gasoline-powered vehicles by 2035.

Executives at Toyota Motor Corp. and Honda Motor Co. expect that consumers will switch to EVs if they are more affordable, can meet their range needs and if there is sufficient charging infrastructure. But those conditions haven’t been met.

“We need to make sure that we’re revisiting targets to align targets with reality,” Frank Voss, president of Toyota Motor Manufacturing Canada, said in an interview with Bloomberg. “The government can only do so much to entice consumers to purchase vehicles that they would like to see implemented. Consumers will choose what they need.”

EVs are still a small part of the market. Just 11 per cent of new vehicles registered in Canada in 2023 were battery electric, plug-in hybrid electric or hydrogen fuel cell. BloombergNEF recently lowered its estimates for EV sales in Canada, estimating that by 2035, they will make up around 70 per cent of new passenger vehicle sales.

The average price of a new vehicle in Canada is $66,000 (about US$48,000), while the average price of a new battery electric vehicle is $73,000, according to Canadian Black Book. The government says its incentive program, which provides as much as $5,000 to buyers of zero-emissions vehicles, has helped make EVs more affordable and increase sales. 

Yet many potential EV buyers are hesitant. In below freezing temperatures, lithium-ion batteries can lose over 20 per cent of their range, according to Recurrent, a Seattle-based startup that assesses EV batteries. But automakers like Toyota say range is an issue they are trying to address, while balancing weight and size concerns. 

Then there’s range anxiety in a huge country where there’s often long distances between major cities. Canada aims to have 84,500 chargers and 45 hydrogen stations by 2029, funded in part through the government’s Zero Emission Vehicle Infrastructure Program. Natural Resources Canada estimates the nation will need around 200,000 public chargers by 2035, but is hopeful the private sector will fund chargers as well.

Members of the auto parts industry have been calling on the Canadian government to more closely align its emissions targets with the U.S., which has a less aggressive emissions target that may imply more than 50 per cent of new vehicle sales being battery electric by 2032.

But Prime Minister Justin Trudeau’s government is sticking with its environmental goals. “The Government of Canada will continually assess progress towards its ambitious zero-emission vehicle sales targets to meet our climate change commitments,” Hicham Ayoun, a Transport Canada spokesperson, said in an email.

Despite Honda’s concerns about the pace of consumer adoption, it is still planning to invest billions on EV manufacturing in Canada, from which it will also serve parts of the U.S. market. 

“There’s a lot of things that need to fall into place to give people the confidence to make the transition,” Jean Marc Leclerc, chief executive officer of Honda Canada, said in an interview. “It may not be fully there today to support the rate of adoption that we’re asked to deliver, but we know it’s going to be there.”

The plan is expand the carmaker’s operation in Alliston, Ontario, to make hybrid and electric vehicles to respond to changing consumer needs, Leclerc said. Hybrid vehicles can be an easier sell for consumers who have hesitations about going all-electric. But if they don’t plug in, they don’t count toward the government’s zero-emission vehicle targets because they still use internal combustion engines.

Leclerc said Honda aims to lower battery costs by 20 per cent and manufacturing costs by 35 per cent for cars manufactured in Ontario by using a local supply chain for raw materials, which will reduce transportation costs. 

Toyota, however, is holding off on building EVs in Canada for now. The company is cautious as the demand and support for electrification aren’t there yet, Voss said. It’s focusing on the transition to hybrid vehicles in the meantime.

“Even with my plug-in hybrid, last week I was in Toronto, I went to two different locations, all five chargers didn’t work,” Voss said. “Infrastructure, as it becomes more capable and catches up, it’ll be a great support to that.”

 

Canada's China EV tariff plan draws debate over best approach

Monique Mulima and Brian Platt, Bloomberg News

Automotive and environmental groups are at odds over how far Canada should go in imposing new tariffs on Chinese-made electric vehicles, as Prime Minister Justin Trudeau’s government weighs levies to protect the domestic industry.

The European Union announced last week that it was increasing tariffs on EVs from China to as much as 48 per cent. That followed a move by the U.S. in May to boost its own such tariffs to as much as 102.5 per cent.

As Canada makes final decisions on its plan, stakeholders are debating whether the country should adopt the more restrictive tariffs of its neighbour to the south or take a softer approach. That discussion is adding a new wrinkle to an effort that’s aimed at preventing cheap Chinese EVs from undercutting the market, while still encouraging consumer adoption of cleaner vehicles.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said the industry would like to see Canada materially match the U.S. tariffs.

“Four out of five cars made in Canada are sold in the U.S., so there’s a reasonable expectation of North American partners that Canada reciprocates,” he said in an interview. Still, any new tariffs should be imposed “carefully, with consideration for what the Chinese response might be.”

Ontario Premier Doug Ford also called on Canada to match the U.S. tariffs. The provincial government would like to see federal government use every tool possible to do this, Ontario Economic Development Minister Vic Fedeli said in an interview.

“This is not about our relationship with China,” Fedeli said. “This is really all about our relationship with our closest ally, our No. 1 trading partner, the U.S. And it’s also about protecting the 120,000 good-paying auto jobs in Ontario.”

China is Canada’s second-largest trading partner, behind the U.S. Auto and parts imports from China that year totaled $6.7 billion (US$4.9 billion), according to Statistics Canada. By contrast, Canada is much less important to China, accounting for just 2 per cent of the Asian nation’s trade flows.

While Chinese auto brands don’t currently sell cars in Canada, many of the EVs imported into the country last year were Tesla Inc. models made in Shanghai.

Some environmental groups are skeptical of hiking tariffs due to fears that higher prices will hamper consumer adoption electric vehicles. Nate Wallace, clean transportation program manager at Environmental Defence, said he’s glad the government will likely do consultations, adding that China’s weak labor standards are a problem. But he still sounded a note of caution.

“Tariffs are maybe a second-best option,” Wallace said in an interview. “The first-best option being: How do we do we start to level the playing field between western carmakers and China without raising EV prices?”

If Canada does hike tariffs, Wallace said he prefers the European Union model, rather than the U.S. one.

“We need to have an approach that makes sure we’re protecting wages and jobs in Canada for the auto industry, but also doesn’t actually remove that incentive for automakers to innovate and catch up to China, which is what we ultimately want,” he said.

 

Canada prepares potential tariffs on Chinese EVs after U.S. and EU moves

Brian Platt, Bloomberg News

Prime Minister Justin Trudeau’s government is preparing potential new tariffs on Chinese-made electric vehicles to align Canada with actions taken by the U.S. and European Union, according to people familiar with the matter.

The government still has to make final decisions on how to proceed, but it’s likely to announce soon the start of public consultations on tariffs that would hit Chinese exports of EVs into Canada, according to officials who spoke on condition they not be identified.

Trudeau has been under increasing pressure at home and abroad to follow the lead of U.S. President Joe Biden’s administration, which announced in May a plan to nearly quadruple tariffs on Chinese-manufactured electric vehicles, up to a final rate of 102.5 per cent. The European Union said last week it plans to increase tariffs on Chinese EVs, taking those levies as high as 48 per cent on some vehicles.

Western democracies are increasingly concerned about China’s overproduction of key goods, seeing it as an effort to dominate supply chains and undercut their own industries. Battery-electric vehicles have become a major target as Chinese firms such as BYD Co. move aggressively into global markets.

On Thursday, Ontario Premier Doug Ford accused China of taking advantage of low labour standards and dirty energy to make inexpensive EVs. He called on Trudeau’s government to at least match the Biden tariffs. “Unless we act fast, we risk Ontario and Canadian jobs,” he said on the social media platform X.

The value of Chinese electric vehicles imported by Canada surged to $2.2 billion last year, from less than $100 million in 2022, according to data from Statistics Canada. The number of cars arriving from China at the port of Vancouver jumped more than fivefold after Tesla Inc. started shipping Model Y vehicles there from its Shanghai factory. 

However, the Canadian government’s main concern isn’t Tesla, but the prospect of cheap cars made by Chinese automakers eventually flooding the market.

Publicly, Trudeau and his cabinet ministers have said they’re monitoring what other countries are doing, but haven’t committed to new tariffs. The prime minister told reporters on Thursday he had “significant conversations” about Chinese production at the Group of Seven leaders’ summit in Italy last week.

A spokesperson for Finance Minister Chrystia Freeland said Canada is “actively considering next steps to counter Chinese oversupply,” but didn’t address if tariffs are being prepared.

“China has an intentional, state-directed policy of overcapacity,” Katherine Cuplinskas, Freeland’s press secretary, said in an email. “Protecting Canadian jobs, manufacturing, and our free trade relationships is essential.”

Canadian auto industry groups have called on Canada to impose stiff tariffs. They’ve warned that Canada can’t afford to be offside with the U.S. on this issue, given the upcoming review of the United States-Mexico-Canada free trade agreement. The U.S. and Canada have tightly integrated auto supply chains, with parts and finished vehicles flowing across the border in huge quantities. The vast majority of Canada’s auto production is exported to the U.S. 

However, Trudeau has moved carefully, given the possibility of Chinese trade retaliation. Some environmental groups argue that it’s most important to keep EV costs low to encourage higher consumer adoption.

Trudeau’s administration and Doug Ford’s government in Ontario have promised to pour billions into building a domestic electric-vehicle industry, from mining critical minerals for batteries all the way to assembling cars and light trucks.

That includes multibillion-dollar subsidies for major new factories proposed by Volkswagen AG, Chrysler owner Stellantis NV, and Honda Motor Co. 

 

Trudeau must match U.S. tariffs on Chinese imports, Ontario premier says

Laura Dhillon Kane, Bloomberg News

The leader of Canada’s most populous province called on Prime Minister Justin Trudeau to impose tariffs on Chinese imports, including at least a 100 per cent levy on electric vehicles, to mirror the Biden administration’s policy.

Ontario Premier Doug Ford accused China of taking advantage of low labor standards and dirty energy and flooding the market with cheap EVs. “Unless we act fast, we risk Ontario and Canadian jobs,” Ford said in a statement on the social media platform X.

Ontario represents about 40 per cent of Canada’s economy and is the heartland of its automotive and manufacturing industries. General Motors Co., Ford Motor Co., Toyota Motor Corp. and other major automakers all have assembly plants in the southern part of the province, making cars and light trucks primarily for export to the U.S. 

Last month, the White House announced sweeping tariff hikes on Chinese goods, including quadrupling tariffs on Chinese electric vehicles to bring the rate to 102.5 per cent. Canada imposes only a small tariff of about 6 per cent on Chinese-made vehicles, but they’re still a relatively small part of the market. 

Trudeau and other Canadian officials have said they’re monitoring the U.S.-China trade battle, but have not committed to following Biden’s lead. The European Union last week announced additional tariffs on electric cars shipped from China — making Canada appear more isolated on the issue. 

Trudeau told reporters on Thursday his government is watching its allies’ actions closely and he had “significant” conversations about this topic at the Group of Seven summit last week.

“We will look very carefully at what steps need to be taken to ensure that the Canadian auto industry and indeed Canadian consumers are well supported for years to come,” he said. 

In his social-media post, the Ontario premier said over the past four years, his province has secured $43 billion (US$31.4 billion) worth of investments in electric vehicle and battery manufacturing. Some of those investments have been lured by promises of billions in public money to match incentives in the U.S. Inflation Reduction Act. 

“We can never take our progress for granted,” Ford said. “Now’s the time to work with our U.S. partners to deepen and strengthen homegrown, U.S.-Canada supply chains.”

Canada blocks Chinese rare earths deal in Trudeau-led crackdown

Jacob Lorinc, Bloomberg News   Jun 17, 2024

Canada’s government will buy stockpiled rare earth materials from Vital Metals Ltd. in a deal that prevents the company from selling its production to a Chinese buyer. 

The small Australian firm, which mines rare earths in Canada’s Northwest Territories, will sell its stockpiled rare earth material to the Saskatchewan Research Council for $3 million. The arrangement, facilitated by Canada’s federal government, keeps Vital from moving forward on a plan it started in December to sell that same stockpile to China’s Shenghe Resources Holding Co. for $2.4 million.

Canada recognizes the rare earths mine as a “strategic asset that contributes to the country’s prosperity and critical mineral goals,” Vital Metals said Monday. 

The intervention is part of a wider push to block Chinese firms from delving further into Canada’s critical minerals sector. Prime Minister Justin Trudeau’s government has warned it will closely scrutinize transactions between domestic mining companies and Chinese government-linked firms and only approve deals “on an exceptional basis.” In 2022, it ordered three Chinese investors to sell their stakes in a trio of Canadian lithium firms.

In May, Canadian copper miner Solaris Resources Inc. dropped a financing deal with a Chinese firm after the arrangement was subject to a lengthy national security review from the federal government. 

Vital’s stockpiled material will go toward a rare earths processing facility being built by the Saskatchewan Research Council, which has made similar purchases. The government-run council previously signed an agreement to import rare earth carbonate from Hung Thinh Group, a Vietnamese minerals producer. 

P3 PUBLIC PENSION FUNDS PRIVATE CAPITAL

Hedge fund Arrowpoint lures CPPIB, Temasek unit as anchors

Bei Hu and David Ramli, Bloomberg News   

Jun 20, 2024

Former Millennium Management Asia executive Jonathan Xiong’s new hedge fund pod-shop has signed up Canada Pension Plan Investment Board (CPPIB) and a unit of Singapore’s Temasek Holdings Pte. as additional backers, according to people familiar with the matter.

Canada’s largest pension plan and Seviora Capital Pte, a wholly-owned unit of the Singapore state-owned investor, will join Blackstone Inc. as anchor investors for Arrowpoint Investment Partners’s fund, said the people, who requested not to be named because the matter is private. 

Arrowpoint aims to start trading on July 1 and deploy more than US$1 billion within two months, said one of the people. That makes it one of the largest Asia hedge fund startups in history based on assets amassed at inception. Representatives from Arrowpoint, CPPIB and Temasek’s Seviora declined to comment. 

Hedge fund pod-shops have been gaining popularity in recent years while the rest of the global industry stagnated. Combined assets of 55 of these firms globally nearly tripled in the six years through 2023, according to a September report by Goldman Sachs Group Inc.’s prime brokerage team. Investors have been looking for one-stop shops to gain access to a variety of investment strategies in a growingly volatile market environment.

More of them are spreading their wings in Asia. Still, the regional space is dominated by large global players such as Millennium, Point72 Asset Management LP and Balyasny Asset Management LP, for whom Asia represents a smaller market. Arrowpoint marks a rare new entrant dedicated to the region with locally-based decision-makers. Xiong is a former Asia co-chief executive officer of Millennium. 

The people declined to specify the amount of capital the three anchor investors are contributing and other terms of their investments. Strategic backers are usually willing to commit money for longer periods, often in exchange for a share of the fee revenue. CPPIB is investing in Arrowpoint through its so-called “emerging managers program,” which has provided $6 billion of capital to fledgling hedge fund firms since 2016, including Hong Kong-based Ovata Capital Management Ltd.

Arrowpoint will begin trading with more than 50 employees in Singapore and Hong Kong combined. More than half of them will be investment and trading staff, said the person. It is looking to nearly double the total number of people hired by year-end to as many as 100, though some of them may not start until next year.

July will see about 12 of its investment teams start trading. The rest of the 18 teams that the firm has signed up will join at later dates due to non-compete agreements with their prior employers, said the person. 

Further expansion is already in the plans. By January, Arrowpoint will move into a new Singapore office that can seat 100 people. Apart from investment staff, the city-state will house the bulk of its technology, middle- and back-office support employees.

Most of the investment strategies Arrowpoint intends to employ will be in place by Sept. 1, the person said.

They include:

• Equity long-short: wagering on rising and falling stocks
• Commodities, including base metals and energy trading
• Fixed income and macro that seek to profit from broad themes in various asset classes, ranging from equities, to fixed income, commodities and currencies
• Interest rate volatility trading
• Event-driven, such as arbitrage trades around mergers and acquisitions
• Share class arbitrage between different classes of shares issued by the same companies
• Statistical arbitrage, a systematic equity approach trying to profit from shifts in the pricing gaps between two or more securities
• Dispersion trading: buying single stock options while selling index options, exploiting the fact that the gaps between implied and realized volatility tend to be greater between index options than between single stock options.

Arrowpoint is not the only new entrant to the Asia pod-shop space. Bobby Jain’s Jain Global LLC is also slated to begin trading in July with at least $5 billion. Unlike peers such as Millennium and Point72 that expanded to Asia years after founding, Jain Global is making Asia one of its seven core businesses at inception, starting with more than 10 portfolio managers in the region, Bloomberg News reported earlier this month.

Other regional hedge fund pod-shops of size include Dymon Asia Capital and Polymer Capital Management, the $4.3 billion firm led by a former Asia head of Point72 and majority owned by PAG.

Pod-shops allocate capital among teams of investors and typically pass on certain expenses to their clients in an arrangement known as “pass-through.” They have been locked in intensifying competition for talent and have been under pressure to produce returns to justify their higher fees as risk-free interest rates have risen.

 

Emissions cap not possible without oil, gas production cuts: Deloitte

Amanda Stephenson, The Canadian Press

Canadian oil and gas companies facing a federally imposed emissions cap will decide to cut their production rather than invest in too-expensive carbon capture and storage technology, a new report by Deloitte says.

The Alberta government-commissioned report — a copy of which was obtained by The Canadian Press — aims to assess the economic impact of the proposed cap.

Its findings contradict the federal government's stance that its proposed cap on greenhouse gas emissions from the oil and gas sector would be a cap on pollution, not a cap on production. And it supports Alberta's position that a mandated cap would lead to production curtailments and severe economic consequences.

But the Deloitte report also casts doubt on the idea that widespread deployment of carbon capture and storage technology will drive down emissions from the oil and gas sector in the coming years, suggesting that scenario doesn't make financial sense. 

"We expect that the cap (will impose) 20 megatonnes in emissions reduction on producers by 2030, which will need to be achieved by CCS (carbon capture and storage) investments, or through production curtailment," the Deloitte report states.

"Curtailing production would be a more cost-effective option compared to investing in CCS." 

The oil and gas sector is Canada's heaviest-emitting industry, and rising oilsands production has meant total emissions from the sector are increasing at a time when many other sectors of the economy are successfully reducing overall emissions. 

Globally, oil demand is growing, with the International Energy Agency forecasting global oil demand to be 3.2 million barrels per day higher in 2030 than in 2023, though the agency also suggests growing supply will outstrip demand growth sometime this decade.

In a draft framework released last December, the federal government proposed mandating a ceiling on oil and gas emissions in order to help slow climate change. The rules would require the industry to cut greenhouse gas emissions by 35 to 38 per cent from 2019 levels by 2030. Companies would also have the option to buy offset credits or contribute to a decarbonization fund that would lower that requirement to cutting just 20 to 23 per cent.

But the Deloitte report suggests oil production in this country could increase 30 per cent, and gas production over 16 per cent, from 2021 to 2040. Those figures are based on a Canada Energy Regulator forecast and on current government policies.

This means that producers will have two choices to meet the constraints of an emissions cap, Deloitte argues. They can invest heavily in carbon capture and storage — trapping greenhouse gas emissions from oil production at site and storing them safely underground — or cut back on planned production increases. 

The oil and gas industry itself has been promoting carbon capture and storage as the key to reducing emissions while still increasing production. The oilsands industry, which is responsible for the bulk of Canada's overall oil and gas sector emissions, has proposed spending $16.5-billion on a massive carbon capture and storage network for northern Alberta. 

But the group of companies behind the proposal, called the Pathways Alliance, has not yet made a final investment decision, saying more certainty about the level of government support and funding for the project is required.

In its report, Deloitte concludes the cost of carbon capture and storage is so high that in many cases, it is "economically unviable."

It says it is unlikely that many companies would go that route in an effort to comply with an emissions cap, and would instead simply curtail production. 

"It is important to note that once implemented, the investment in CCS is irreversible," the report states. 

"However, production curtailment can be reversed. Considering these factors, we do not foresee any oilsands CCS investments being implemented.”

The Deloitte report concludes a mandatory limit on greenhouse gas emissions from the oil and gas sector would result in decreased production, job losses and investment, as well as a "significant" decline in GDP in Alberta and the rest of Canada.

The mining, refinery products and utilities sector will also experience a decrease in real output in the event of an emissions cap, Deloitte says, due to their proximity to the oil and gas sector.

Alberta's oil production in 2030 would be 10 per cent lower with a cap than without one, the Deloitte report suggests, and its natural gas production would be 16 per cent lower. The cap would also mean decreased fossil fuel production in B.C., Saskatchewan and Newfoundland.

By 2040, Deloitte says, Alberta’s GDP would be 4.5 per cent lower, and Canada’s GDP would be one per cent lower, than if no emissions cap were in place.

Federal Environment Minister Steven Guilbeault told reporters in Ottawa Tuesday that the findings are "baffling" given the government has not even published draft emission cap regulations yet.

"How can they come up with these scenarios about production cuts when all they have seen is basically a white paper, defining contours of what the regulations could be?" he said.

Guilbeault added that oil and gas companies themselves, including the Pathways Alliance, have committed to getting to net-zero emissions by 2050.

"All we're doing with the oil and gas emissions cap is taking companies at their word," he said.

"They said they wanted to be carbon-neutral by 2050, and what we're doing with these regulations is making sure nobody waits until 2048 to start putting in place the measures that are necessary."

But Alberta Environment Minister Rebecca Shulz said the report supports what the province has been saying all along.

"We have to use common sense. You have to take socio-economic data into perspective when you're looking at policies like (an emissions cap)," said Shulz in an interview.

"I don't think Canadians want to see us throw the country into further economic decline."

Shulz added Alberta recognizes that the economics of carbon capture and storage are challenging. She said heavy-handed government policy that makes companies less profitable will only have the effect of discouraging investment in emissions reduction.

"From a policy perspective, the layering of all of these punitive measures are continuing to drive away the emissions reduction technology that we actually want to see happen here," she said.

The Deloitte report predicts Alberta would have 54,000 fewer jobs in 2030 with an emissions cap than without one.

This report by The Canadian Press was first published June 18, 2024.

Oil and gas industry making risky play in response to greenwashing law: experts

The Canadian Press

Experts in communications and greenwashing say the oil and gas industry is making a risky play in so fully scrubbing environmental claims from their websites and social media in response to a new law. 

The Pathways Alliance group of oilsands companies has removed all content from its platforms while other companies have modified their websites after new greenwashing amendments were passed as part of an update to the Competition Act.

The chief executives of the six oilsands companies behind Pathways put out a statement late Thursday that said the law, which requires companies to back up their environmental claims with evidence, represents a serious threat to freedom of communications. 

Sarbjit Kaur, co-founder of KPW Communications, says the industry strategy is very risky because it could be perceived that their environmental claims are unfounded, or they don't respect the legislation.

Wren Montgomery, associate professor of sustainability at Western University's Ivey Business School who studies greenwashing, says Canadians are savvy and really dislike hypocrisy.

She says the standards in the law are reasonable, and the industry's removal of so many claims in response to it will likely leave many thinking they weren't backed by evidence. 

This report by The Canadian Press was first published June 21, 2024.

Pathways Alliance oilsands group removes all website, social media content

Amanda Stephenson, The Canadian Press\

The Pathways Alliance group of oilsands companies has removed all content from its website and social media feeds, citing uncertainty over a new anti-greenwashing rule poised to become federal law, while a major oil and gas industry group has also modified its website.

The Pathways Alliance is a consortium of Canada's six largest oilsands companies, which together have publicly committed to reaching net-zero greenhouse gas emissions from oilsands production by 2050.

The consortium has previously spent millions of dollars on a countrywide public relations blitz aimed at demonstrating that the oilsands is committed to helping fight climate change.

But as of Thursday, all that remains on the group's website is a notice saying Pathways has removed its content due to concerns around an anti-greenwashing provision in federal Bill C-59.

"Imminent amendments to the Competition Act will create significant uncertainty for Canadian companies that want to communicate publicly about the work they are doing to improve their environmental performance," the Pathways statement reads.

"With uncertainty on how the new law will be interpreted and applied, any clarity the Competition Bureau can provide through specific guidance may help direct our communications approach in the future."

The group — which has not yet responded to an interview request — added it remains committed to the work it is doing to reduce the environmental impacts of oilsands production.

The Canadian Association of Petroleum Producers also said Thursday it has "chosen to reduce the amount of information available on its website and other digital platforms."

The omnibus bill C-59, which passed third reading in the Senate Wednesday and will soon become law, contains a truth-in-advertising amendment that would require corporations to provide evidence to support their environmental claims.

The provision is not fossil fuel-specific, but applies to all businesses and economic sectors. The bill's wording says businesses must not make claims to the public about what they are doing to protect the environment or mitigate the effects of climate change unless those claims are based on "adequate and proper substantiation in accordance with internationally recognized methodology."

The passage of the provision is a win for Canadian environmental groups, who have been mounting a full-fledged campaign against "greenwashing" — a term given to the perceived tendency by companies to market their products and practices as more sustainable than they really are.

In the last year, Canadian green groups have lodged at least four formal complaints with the federal Competition Bureau alleging greenwashing or false environmental claims by fossil fuel companies or banks.

The Pathways Alliance was the target of one of those complaints. Environmental groups have said the consortium's ads and public claims about net-zero are misleading, as the Pathways Alliance has not yet made a final investment decision on its proposed $16.5-billion carbon capture and storage network.

Leah Temper, program director with the Canadian Association of Physicians for the Environment, said Thursday she was "thrilled and surprised" to see the oilsands industry react so strongly to the passage of C-59.

"This is basically a very modest provision in the Competition Act. It simply requires companies to tell the truth and to have an evidence base to back up their claims," Temper said.

"So I do think this reaction is very telling."

In a statement, the Canadian Association of Petroleum Producers said the anti-greenwashing provision will have the effect of silencing the energy industry and curtailing the ability of Canadians to participate in debates around climate and environmental policy.

"The burden of proof provision included in the amendments means those making the complaint face no risk or accountability. Rather, the burden falls entirely on companies," said CAPP president and CEO Lisa Baiton.

"Businesses across Canada are being put at significant risk for communicating their efforts to reduce their impact on the environment."

But Temper said that as climate change concerns mount, it has become increasingly common for businesses in all industries to make questionable environmental claims in their advertising.

"It has been the Wild West. Companies have been able to make almost any claim they want, using terms such as net-carbon neutral, without any reliable evidence base," Temper said.

"Hopefully this (C-59) will represent a sea change."

Alberta Environment Minister Rebecca Shulz has called the anti-greenwashing provision an "undemocratic gag order" that creates needless uncertainty for businesses.

On Thursday, the Calgary Chamber of Commerce said the new rules run at "cross-purposes" to the climate ambitions of industries across all sectors. 

The Chamber said the rules will also limit disclosure of climate targets and ambitions to investors and financial markets, putting Canadian companies at a distinct disadvantage relative to companies operating in other jurisdictions.

“Changes to Canada’s Competition Act will be far-reaching and risk the environmental progress industries writ-large have been working toward," said Chamber president Deborah Yedlin.

The debate over environmental claims in advertising has been heating up worldwide. Earlier this month, UN secretary-general Antonio Guterres urged countries to ban advertising by fossil fuel companies in the face of the climate crisis.

This report by The Canadian Press was first published June 20, 2024.

 

Most renters have no plans to buy a home in the near term: Royal LePage

Daniel Johnson, BNN Bloomberg

The majority of Canadian renters say they have no plans to purchase a home, as only one quarter intend to buy over the next two years, according to new survey data from Royal LePage. 

In a press release on Thursday, Royal LePage said that 27 per cent of renters are planning to buy a property in the next two years, a figure that rises to 40 per cent among renters aged 18 to 34. However, the majority of renters, 69 per cent, say they do not plan to purchase a home in the near term. 

“The rental sector is not immune to the significant affordability challenges stemming from Canada’s acute housing shortage. High mortgage rates have made it difficult for many to purchase a home, forcing some to move into, or remain longer than planned, in the rental market,” Phil Soper, president and chief executive officer of Royal LePage, said in the press release. 

Among those who do not plan to purchase a home, the survey found 54 per cent said they did not view their income as sufficient to afford a desirable property, this figure rose to 61 per cent among those between the ages of 18 and 34. 

The survey also found that 29 per cent of renters indicated they thought about purchasing a home ahead of renewing their lease or signing a new one, while 41 per cent of respondents indicated they could not afford a down payment. 

“While a third of Canadian adults are currently renting, and there are families who are perfectly content doing so, the desire for home ownership remains strong among a large portion of this segment of the population,” Soper said. 

“Our latest research reveals that a material number of renters wish to transition to home ownership. Understandably, the greatest barrier to entry is the ability to drum up the initial capital for a down payment.” 

Methodology 

The survey was conducted by Hill & Knowlton using the Leger Opinion online panel to survey 1,506 Canadians, aged 18+, who rent their primary residence. Results were taken between June 7 and June 10. 

 

Equifax Canada reports rise in delinquency, debts amidst rate cut optimism

Mitchell Consky, BNN Bloomberg

Equifax Canada says it's exploring how using payday loan data could affect people's credit scores. Signage is seen at the corporate headquarters of Equifax Inc. in Atlanta, Saturday, July 21, 2012. , THE CANADIAN PRESS/AP-Mike Stewart

Installment loans surged higher in the second half of 2023 compared to the previous year, according to data from Equifax Canada. 

The agency’s 2024 Business Credit Trends Report attributes a 74 per cent year-over-year spike in new installment loan originations during the latter half of last year to Canadian businesses rushing to meet the Canadian Emergency Business Account (CEBA) forgiveness deadline of Jan. 18. 

"While it may feel like CEBA is moving into the rear-view mirror, it’s truly a matter of businesses turning to new installment loans to secure their financial stability," said Jeff Brown, head of commercial solutions for Equifax Canada, in a press release Tuesday.

"Many businesses were focused on the forgiveness deadline and paying back debt to take advantage of this timeline. The increased reliance on these loans has also contributed to a notable rise in delinquencies, particularly in installment loans."

Equifax Canada also highlighted a rise in delinquencies in industrial trade, which increased from 10.1 per cent in the first quarter of 2023 to 12.2 per cent in the first quarter of 2024. 

Financial trades, such as credit accounts between businesses and financial institutions, also faced an uptick in delinquency rates, with 30-plus day delinquencies jumping from 3.3 per cent in the first quarter of last year to 3.4 per cent in the first quarter of this year. 

Equifax attributes this rise in delinquency rates to missed payments on installment loans and lines of credit. Despite credit card delinquencies remaining generally low, businesses that have opened new credit cards over the last two years are missing payments at a much faster rate on those cards, Equifax reports. 

“It is more important than ever to monitor newer accounts for early warning signs of financial stress as it might take some time to see their impact on portfolios,” Brown said in the statement. 

Aside from the difficulties of increasing delinquencies, Equifax also reported that Canadian companies are struggling under the pressure of rising debt. Outstanding financial trade balances have hit a new high in the first quarter of 2024, reaching $31.9 billion, a 7.4 per cent increase from the first quarter of last year. 

Despite the challenges of increased debts and delinquencies, Equifax also reported a 30 per cent increase in new businesses opening in the first quarter of 2024.

The agency outlined a 2.4 per cent year-over-year increase in inquiry volumes for financing during the first quarter, which Equifax says reflects strong demand from businesses. 

Equifax says that more than 53,000 Canadian businesses have opened in the first quarter of 2024, which is a notable 30 per cent jump from the first quarter of 2023. 

 The central bank plays a role in this business boom, according to the report. 

“The recent rate cut by the Bank of Canada offers hope that we could be on a trend towards lower rates if inflation remains in check,” Brown said in the statement. “Businesses may get some breathing room on debt payments, which could potentially free up resources for growth.”

 

Talks underway with potential buyer for Atlantic Canada's largest newspaper chain

The Canadian Press

The Chronicle Herald sign is seen in Halifax on Thursday, April 13, 2017. , THE CANADIAN PRESS/Andrew Vaughan

The court-appointed monitor overseeing the potential sale of Atlantic Canada's largest newspaper chain has confirmed selection of a bidder who has plans to operate SaltWire Network Inc. and The Halifax Herald Ltd. as viable businesses.

In a report dated Wednesday, Toronto-based KSV Restructuring Inc. says talks with the unnamed bidder are advancing towards a transaction that could be completed by Aug. 9, assuming an extension is granted to the sales process.

The Halifax Herald Ltd. owns The Chronicle Herald, the independent Halifax-based daily newspaper that was founded almost 200 years ago. 

SaltWire Network Inc. owns other newspapers in Nova Scotia, P.E.I. and Newfoundland, including the Cape Breton Post in Sydney, N.S., the Guardian in Charlottetown and the Telegram in St. John's, N.L., as well as weekly papers and several digital publications. 

They employ about 800 independent contractors and 390 staff, which includes about 100 unionized positions, according to court documents. 

On March 13, a Nova Scotia Supreme Court judge granted the two insolvent media companies protection from creditors owed about $90 million, of which $32 million was owed to a senior secured lender, the Fiera Private Debt Fund. 

But rather than push the media companies into receivership, Fiera has supported a restructuring process through a series of loans that have allowed SaltWire and The Herald to keep operating under the federal Companies' Creditors Arrangement Act.

The media companies are owned by Mark Lever and his wife Sarah Dennis. Earlier this year, Lever stepped down as president and CEO of SaltWire, at which point he was expected to submit a bid for the media companies.

In all, four qualified bidders came forward to buy all or part of the media companies' business and assets, KSV said. None was named.

Last Friday, all but one were told their bids were no longer being considered.

KSV's report says "discussions are advancing with a party toward a transaction which, if completed, would see the business continue to operate on a going-concern basis. The monitor is hopeful that negotiations will lead to a successful transaction."

On June 28, KSV is expected to ask Nova Scotia Supreme Court Justice John Keith to extend the media companies' creditor protection to Aug. 9. The deadline to close any sales transaction was originally set at July 31.

With the help of the monitor, Keith will ultimately decide what deal will ensure the survival of the companies and allow creditors to receive some form of payment for amounts owing.

KSV is also seeking approval for a $135,000 "key employee retention plan" and an increase in interim financing that, if approved, will rise from $3 million to $4.1 million. The employee retention plan is aimed at those helping with the potential sale of the media companies and a related company known as Titan Security and Investigations Inc.

Meanwhile, the report says the media companies recently launched a “last mile” parcel delivery business known as Door Direct, which utilizes their existing carrier network.

"The media companies believe that this business has the potential to materially improve their viability," the report says. "The Door Direct business is in its development stages."

As well, the report says plans are moving ahead to sell Titan Security, which is a profitable security and health-care service company with about 100 employees.

This report by The Canadian Press was first published June 20, 2024.