Laurentian Bank appoints new CEO after computer mainframe outage

Laurentian Bank announced the appointment of Éric Provost as president and chief executive on Monday, following a computer outage at the bank last week.

Provost replaces Rania Llewellyn in the top job, effective immediately. He was most recently Laurentian's group head of personal and commercial banking.

The bank also said director Michael Boychuk has been appointed chair of its board of directors, replacing Michael Mueller, who has resigned from the board.

"We have experienced challenges recently and the board is confident that Éric will successfully focus the organization on our customer experience and operational effectiveness," Boychuk said in a statement.

"Éric's appointment as CEO follows his exceptional performance leading our commercial banking business and was part of our formal succession planning process." 

Laurentian said it suffered a mainframe outage last week during a planned IT maintenance update. It said customer data and financial information remained secure at all times.

The bank said Provost's immediate priority will be to rebuild trust with the bank's customers and address the impacts of the outage.

"Once the issues related to the outage are fully behind us, we will develop a new plan to ensure the sustained success of our bank," Provost said. 

"We will focus our efforts on renewing the trust of loyal customers while continuing our efforts to drive greater operational efficiency and growth in all our business lines."

As an initial step, the bank said it will reverse all monthly service fees for September as soon as possible. 

Last month, Laurentian completed its review of strategic options without a deal to sell the bank.

A strategic review is often seen by investors as a prelude to a sale by a company. However, Laurentian said it will work on simplifying its organizational structure and focusing on allocating capital and resources to its highest grossing businesses and specialized products.

Laurentian said it would share more information when it reports its fourth-quarter results on Dec. 7 and will unveil a renewed strategic plan at an investor day early in 2024.

The bank has been working through a three-year strategic plan it launched in late 2021 to modernize operations, including with the rollout of its first mobile banking app. 

This report by The Canadian Press was first published Oct. 2, 2023.

Laurentian needs to send a message to investors quickly, expert suggests

Ben Cousins, BNN Bloomberg

Following the latest news of a shakeup of Laurentian Bank’s C-suite, one portfolio manager said the bank needs to take steps to reassure its investors in short order.

On Monday, the bank announced Eric Provost, Laurentian’s group head of personal and commercial banking, would take over as president and CEO from Rania Llewellyn effective immediately, following an IT outage last week.

The bank also announced that director Michael Boychuk would replace Michael Mueller as chair of its board of directors.

Bryden Teich, partner and portfolio manager at Avenue Investment Management, said the IT issue reasoning could be a way for the bank to avoid indicating the leadership change was due to its failed strategic review from earlier this year.

“If I’m trying to read the tea leaves, the banking sector as a whole is in a difficult moment, I think Laurentian specifically has been searching for an identity,” he told BNN Bloomberg Monday. “I would say perhaps that management didn’t find it and this is just a board shakeup and the bank is headed in a different direction.”

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When it comes to the most recent shakeup, Teich the bank needs to be open with its investors about where the bank is going.

“You have to come out with a message quickly,” he said. “I think a lot of the moves, trying to go private or sell themselves, I think it’s also a great way to shake out any shorts that were in your stock.”

WHAT’S NEXT FOR LAURENTIAN?\

In the near term, Teich suggested Laurentian might keep its operations as-is for the time being, with an economic downturn looming,

“Ultimately, lending’s a tough business, we’re about to go through probably a tough credit cycle and you need to have a management team that can focus on getting the institution through that,” he said.

“What Laurentian becomes after that, I’m not sure.”

With files from The Canadian Press

 

India tensions source of concern for Canada's postsecondary schools

Indira Kannan and Jordan Fleguel, BNN Bloomberg

With 20,000 students from India making up half of its student population, the president of Conestoga College in Kitchener, Ont., is hoping for a quick resolution to worsening relations between Canada and India.

Tensions have escalated between the two countries after Canadian Prime Minister Justin Trudeau said Monday that there were “credible allegations” of Indian government involvement in the killing of Sikh independence activist Hardeep Singh Nijjar, a Canadian citizen who was shot dead in June outside a B.C. temple.

Indian officials have called the allegations “absurd,” and this week the country issued a travel advisory for Canada that warned citizens to exercise caution and addressed students directly.

“Given the deteriorating security environment in Canada, Indian students in particular are advised to exercise extreme caution and remain vigilant,” the advisory read.

John Tibbits, president of Conestoga College, said he is hoping for an early resolution to the row, as any disruption of Indian student inflows would impact his institution, along with many other Canadian post-secondary schools.

“We’re concerned, but we’re not panicking at this point,” Tibbits said in a Friday interview.

“It would have a big impact on both sides if India decided they wanted to restrict the number of people coming here. We need the students and their skills and it would have a big impact on their families. So I’m hoping somehow the tension will diminish, but I understand it will take some time.”

Referring to security concerns raised in the travel advisory, Tibbits said there are no heightened security concerns in his area.

“I can’t talk about B.C. or other places, but here classes are going on as normal, it’s business as usual,” he said.

‘SINGLE GREATEST ECONOMIC RELATIONSHIP’

India is by far the largest source country for international students in Canada.

Indians make up around 40 per cent of the foreign student population in this country. Those students not only pay tuition fees that are four to six times higher than those paid by domestic students, but also contribute to the local economies through rent, other spending and as a source of labour. 

In 2021, Ontario’s auditor general released a report warning about the risks of the province’s colleges depending on high international student tuitions to stay afloat.

"That puts these institutions in a precarious position, should students decide to go elsewhere, or are no longer able to come to Canada to study," Auditor General Bonnie Lysyk’s report had stated.

Colleges, universities and communities across Canada would be impacted if current political tensions were to affect the flow of Indian students to Canada, according to the president of the Asia Pacific Foundation of Canada.

Jeff Nankivell told BNN Bloomberg this week that the freeze could risk impacting a major source of funding for Canadian universities and colleges.

“The single greatest economic relationship is around the student flows to Canada,” he said in a television interview on Thursday.

While demand remains high in India for Canadian education, and “it would take a lot to knock it off course,” Nankivell noted that government tensions could dissuade prospective students.

“That has implications not just for colleges and universities and private professional schools, but also for communities across the country,” he said.

His comments echoed remarks from Rohinton Medhora, distinguished fellow at the Centre for International Governance Innovation, who in a recent interview with BNN Bloomberg, also pointed to international student flows as a possible “economic consequence” of the ongoing diplomatic crisis between Canada and India.

VISA SUSPENSION

India has also announced a ban on new visas for Canadian citizens.

While this is unlikely to affect students, who mostly hold Indian passports, a bigger cause for concern is the Indian government’s directive to Canada to downsize its diplomatic and consular staff in India, to match India’s staff strength in Canada. 

That could delay the processing of student visas, prompting students to look elsewhere, Tibbits explained.

“Certainly there is a risk, there’s no question,” Tibbits said.

“We know Indian students could go to Australia, Great Britain or the U.S. But there’s a lot of diaspora in Canada and I think overall they consider Canada a country of opportunity and friendly to the Indian population. So I would think we would still be, compared to the U.S., a destination of choice.”

Tibbits said he was not aware of requests from Indian students yet to defer their admission to later semesters, but he hopes things return to normal soon.

“I’m certainly disappointed at the tension,” he said. “I think India’s a very important ally of Canada. It’s in both our interests to have a good relationship, especially for Canada … we’re a small country, we need a good relationship with India.”

 

Coastal GasLink pipeline project 98 per cent complete

TC Energy Corp. says its Coastal GasLink pipeline project is 98 per cent complete.

Coastal GasLink is a 670-kilometre pipeline spanning northern British Columbia that will carry natural gas across the province to the LNG Canada processing and export facility in Kitimat, B.C.

TC Energy says the pipeline will be mechanically complete before the end of the year.

Earlier this year, the company raised the estimated project price tag for Coastal GasLink to $14.5 billion, up significantly from a previous estimate of $11.2 billion and more than double the initial cost estimate of $6.2 billion.

Over the course of the project, the pipeline's construction has also attracted opposition and protests from environmentalists and Indigenous leaders.

While many Indigenous groups along the project's pathway support the pipeline, the hereditary Wet'suwet'en chiefs, whose territory the pipeline crosses, do not.

This report by The Canadian Press was first published Sept. 29, 2023.

 

Clean electricity regs can be tweaked, but no special deal for Alberta: Guilbeault

Mia Rabson, The Canadian Press 

There will be no special treatment for Alberta when it comes to Canada's incoming regulations to make electricity cleaner, Environment Minister Steven Guilbeault said Friday.

The comments are the latest salvo in the seemingly never-ending battle between Alberta and Ottawa over climate policy.

This one relates to new clean electricity regulations that Guilbeault published in draft form in August. The regulations will require all electricity to be from either renewable sources, like wind or hydro, or equipped with carbon-capture technology by 2035.

Both Alberta and Saskatchewan have said that that is simply not doable, and they are instead targeting 2050 as the date for full emissions-free electricity. 

The two provinces still rely heavily on fossil fuels — natural gas for Alberta and coal and gas for Saskatchewan — to make power, and they say they can't eliminate those or build enough carbon capture without hurting reliability or costing their residents a fortune.

Alberta Premier Danielle Smith Thursday said she will use her province's sovereignty act to challenge any attempt by Ottawa to enforce that deadline. Her comment came after an Alberta Electric System Operator issued a report warning about the possibility of blackouts if the federal regulations are enforced. 

The report did not explain how that conclusion was reached. But Smith is in full-scale attack mode, launching a widespread advertising campaign, including outside of Alberta, asking people to tell Ottawa not to let Albertans freeze in the dark.

Guilbeault disputes that the regulations will put undue costs or cause reliability problems anywhere. He said he wants to work with all provinces and territories to make sure the regulations work for everyone and also reduce emissions.

"I would call on Premier Smith to work with us constructively to ensure that these regulations are the most efficient for all Canadians," Guilbeault said during a news conference on an unrelated topic in Ottawa Friday.

He said while the regulations are still in the consultation stage, and adjustments can still be made, there will not be a carve-out that exempts Alberta.

"How fair would it be for ... the rest of the federation if we started carving out exceptions for provinces?" he said.

"We didn't do it for pricing. We worked with all provinces to ensure that we had a fair and equitable system when it came to pricing, and we will do the same for the clean electricity regulations."

Alberta and Saskatchewan, along with Ontario, launched court challenges of Ottawa's authority to impose a carbon price, arguing it impeded their jurisdictions from developing their natural resources as they see fit. 

Ultimately, the Supreme Court of Canada sided with Ottawa, ruling that climate change and emissions cross provincial borders, so Ottawa has jurisdiction to implement a carbon price.

The Sovereignty Act, which Smith passed in Alberta almost a year ago, would allow the province to reject federal laws or regulations when the province thinks they cause harm to Alberta. It has not been tested in court.

This report by The Canadian Press was first published Sept. 29, 2023.

 

High grocery prices 'inherent to the Canadian system': food economist

Daniel Johnson, BNN Bloomberg

Following meetings between government officials, grocers and manufacturing companies around at stabilizing food costs, a food economist said conversations about food supply chains should be broad and inclusive to get at the heart of the issue.

Mike von Massow, a food economist and associate professor at the University of Guelph, told BNN Bloomberg it’s important for players at all levels of the supply chain to be involved in the discussions in order to have a “fulsome” picture of what is taking place. 

“It’s important to have the broader conversations,” von Massow said in a Tuesday interview.

“Frankly, I would have had them even more broad, and included some of the producer groups, so that we have a complete picture of what's going on in the supply chain.”

The expert’s comments came after the federal government held meetings on the topic of stabilizing food prices with top grocery executives at Loblaw, Metro, Empire, Walmart and Costco, and with leaders at manufacturing companies including McCain, Nestlé and Kraft Heinz.

Industry Minister François-Philippe Champagne said grocery executives agreed to take action to stabilize food prices and that their plans will be presented next month. 

In another bid to tackle high food costs, the federal government also tabled the “Affordable Housing and Groceries Act” last week. The legislation attempts to maintain competition in the grocery industry and expands powers for the Competition Bureau to investigate price fixing.

In a recent BNN Bloomberg interview, former Liberal deputy prime minister John Manley criticized the government’s moves aimed at stabilizing food prices. He disagreed with the focus on grocery stores and said if the federal government was serious about its efforts, it would focus on supply management instead.

FOOD PRICES IN CANADA 

Food inflation remains high in Canada. However, von Massow noted that prices have declined in two of the last three months despite elevated prices on an annual basis – a trend he said should provide “some hope” for consumers. 

According to von Massow, there are several factors “inherent to the Canadian system” that contribute to higher prices. 

“None of these things are going to be big magic bullets to bringing food prices down. But I think things like interprovincial trade barriers are small things that we could do to improve not only the food prices but the prices of many other things as well,” he said. 

Some of these factors include labour costs in Canada that are higher relative to the U.S. 

“That comes into play regardless of where we are in the food system, at restaurants, at retail (or) at processing.” von Massow said. 

He also noted that logistic costs are more expensive in Canada due to fuel costs, as well as from a “distance travelled perspective.” 

First Nation wants reasons for Trans Mountain ruling; says it's entitled to appeal

Amanda Stephenson, The Canadian Press

A B.C. First Nation is asking the Canada Energy Regulator to release its reasons as soon as possible for allowing a modification of the Trans Mountain pipeline's route.

In a letter to the regulator dated Wednesday, a lawyer representing the Stk’emlúpsemc te Secwépemc Nation (SSN) said the decision to grant the route deviation Monday without providing its reasons has left the First Nation without the ability to decide its next steps.

The letter said the First Nation has the right to request a reconsideration of the decision, or to appeal it through the Federal Court of Appeal.

"This has, in fact, created significant uncertainty for SSN and left SSN without the procedural options that would otherwise be afforded to it with the potential for irreparable harm to its rights and title as a result," the letter states.

The Canada Energy Regulator ruled Monday to allow Trans Mountain Corp. to alter the route slightly for a 1.3-kilometre stretch of pipeline in the Jacko Lake area near Kamloops, B.C.

It said it would release its reasons for the decision in the coming weeks.

Trans Mountain Corp, a Crown corporation, had requested the change because of what it said were engineering difficulties in the area related to the construction of a tunnel.

The company had warned that being forced to stick to its original route and construction method could result in up to a nine-month delay in the pipeline's completion, as well as an additional $86 million more in project costs.

Trans Mountain had been hoping to have the pipeline completed by early 2024.

But the Stk’emlúpsemc te Secwépemc Nation, whose traditional territory the pipeline crosses and who had only agreed to the originally proposed route, opposed Trans Mountain's application.

The First Nation has said the new route threatens to disturb land that has spiritual and cultural significance.

The First Nation's lawyer said in the letter Wednesday that Trans Mountain has indicated it wants to break ground on the new route on Oct. 2.

The Trans Mountain pipeline is Canada's only pipeline system transporting oil from Alberta to the West Coast. The expansion, which is currently underway, will boost the pipeline's capacity to 890,000 barrels per day (bpd) from 300,000 bpd.

The pipeline — which was bought by the federal government for $4.5 billion in 2018 after previous owner Kinder Morgan Canada Inc. threatened to scrap the expansion project in the face of environmentalist opposition and regulatory hurdles — has already been plagued by construction-related challenges and delays.

Its projected price tag has also soared: first to $12.6 billion, then to $21.4 billion and most recently to $30.9 billion.

This report by The Canadian Press was first published Sept. 28, 2023.

 

Northvolt gets billions from Canada to build Quebec EV battery plant

Mathieu Dion and Rafaela Lindeberg, Bloomberg News

Sweden’s Northvolt AB said clean power and access to critical raw materials alongside generous subsidies swayed its decision to pick a site close to Montreal for its first electric vehicle battery plant in North America. 

The $7 billion project sets up Northvolt, founded by former Tesla Inc. employees, to become a global player as Western nations seek to lessen EV battery dependence on China. It’s set to start operating in 2026 and initially produce enough batteries for about half a million EVs. The plant was announced Thursday, confirming a report in June by Bloomberg News. 

To help attract Northvolt, Canadian Prime Minister Justin Trudeau’s government is matching subsidies available for U.S. manufacturing under the Inflation Reduction Act. The support during construction as well as battery production may amount to more than $5 billion, and follows similar commitments for Volkswagen AG and Stellantis NV factories in Ontario. 

“It will make our country one of the few places with this capacity outside of Asia,” said Trudeau at a news conference in Montreal.

Quebec’s clean hydroelectric power will “slash by half the total footprint of the carbon dioxide required to produce batteries,” co-founder Paolo Cerruti said in an interview. Canada’s reserves of critical minerals and Montreal’s location on the eastern side of the continent were also factors in the company’s choice — alongside generous funds.

The moves are a testament to the growing global subsidy race. Tensions between China and Western countries have spiked, with EVs moving into the crosshairs after the European Union this month kicked off a probe into what it says is unfair Chinese state support of its electric-vehicle makers.

In a first phase, Northvolt’s Montreal factory will have a capacity of 30 gigawatt hours of annual lithium-ion cell manufacturing and will also produce cathode components and recycle old batteries. No timeline was provided for a second phase that would double output.

Government funding will amount to about $1 billion each from Canada and Quebec toward construction, mostly in loans that may be partially forgiven if Northvolt meets certain conditions. As part of its share, Quebec is buying a $420 million equity stake in Northvolt. 

The company will also be eligible for combined operating subsidies of as much as $4.6 billion over a maximum period of nine years, broadly matching commitments for the VW and Stellantis projects in Ontario. Northvolt chose the location east of Montreal from about 70 different sites in North America.

“This is the largest manufacturing investment in the history of Quebec,” said the province’s premier, Francois Legault.

Cerruti, who previously led the supply chain and operations planning at Tesla, will lead Northvolt’s North American operations. The battery maker, created seven years ago, has already received $55 billion in orders from BMW, Volvo Car and Volkswagen. 

It’s currently making batteries in Sweden and plans an initial public offering when equity markets are more favorable, counting BlackRock Inc. is among its large investors. The firm is also planning to build a factory in Germany, but financial support has yet to be finalized. 

Northvolt has already secured a battery buyer in North America for the new plant, Cerruti said, without disclosing any details. Future expansion on the continent is possible, he said. 

The ambitious timeline for the project may come under pressure from a labor shortage with around 3,000 workers necessary and opposition from residents living nearby. 

“It’s not going to be easy, but being aware and having a plan is kind of solving 50 per cent of the problem,” Cerruti said. 

With assistance from Laura Dhillon Kane.

Quebec EV battery plant will produce $25

billion worth of batteries each year: Volpe

Jordan Fleguel, BNN Bloomberg 

A $7-billion electric vehicle battery plant is coming to Quebec, and one industry expert says it will be able to produce around $25 billion worth of batteries each year when fully built out.

The president of the Automotive Parts Manufacturers’ Association told BNN Bloomberg that the investment by Swedish battery-maker Northvolt is an important link in EV battery supply chain infrastructure, which will be critical to Canada’s economy going forward.

“This is their first North American investment, and it's massive,” Flavio Volpe said in a television interview on Thursday.

The Quebec government is subsidizing the plant, committing up to $2.9 billion to secure the deal, while the federal government will add up to another $1.34 billion.

Volpe says that as Canada attempts to break into the global EV battery market, government subsidies are necessary to attract investment from the world’s largest companies.

“If you want to be in the big leagues, you've got to, unfortunately, pay a franchise fee,” he said. “But then it generates all kinds of incredible activity that doesn't come any other way.”

Volpe says that when fully operational, the plant will have the capacity to make roughly one million batteries per year.

“They're about $25,000 each battery, so the economic activity in the area is going to be in and around $25 billion a year,” he said, “so there is a lot of money tied to production.”

Northvolt’s facility, which will be located outside Montreal, is expected to go into production in 2026 and will employ up to 3,000 people, according to the company.

 

Blackstone bets on Canadian immigration to usher in growth

Iva Poshnjari, BNN Bloomberg

With highly educated immigrants set to grow Canada’s population, one of the world’s largest asset management firms is looking to invest heavily in the country.
 
Blackstone, the world’s largest alternative asset management company which oversees US$1 trillion in assets, is opening up an office in Canada as it commits to growing its presence and investments in the country.  

Jonathan Gray, president and chief operating officer of Blackstone, told BNN Bloomberg that his company has “a lot of enthusiasm” about Canada’s economy – and he sees the country’s growing population as its largest asset for future growth and productivity.
 
“We think the resource that (Canada) is most rich in is human talent,” Gray said in a television interview on Wednesday. 
 
“The fact that the population in Canada is growing at 2.7 per cent, five times the rate of the U.S., it’s very bullish. Many of those folks are quite educated as well.”
 
Blackstone is looking to grow its investments in Canada within several industries that include housing, logistics, infrastructure and clean energy. 
 
“You’ll see us on the real estate front do more in the student housing, which is an area Canada is really strong in, because so many people want to get a Canadian education,” he noted. 
 
Data centres will be another area Blackstone intends to focus to facilitate the advancement of artificial intelligence, Gray added.
 
“When you think about what’s coming in AI, data centres are really the manifestation of that,” he added. 
 
HOUSING PUSH 
 
As Blackstone eyes more student housing, Gray spoke about the Canadian housing market’s strength at large. 
 
Despite extraordinary high prices, he expects that overwhelming demand for housing in Canada combined with limited housing supply will continue to support the sector – particularly in areas where concentrated numbers of immigrants are expected to land.
 
“I think housing long-term has got some support because of this supply-demand imbalance,” Gray said. 

 

AI pioneer urges 'extreme' caution as nations race toward using AI systems

Artificial intelligence pioneer Yoshua Bengio is urging the tech industry to guard against a "race to the bottom" as it explores how AI could be used in areas like defence.

The founder and scientific director of Montreal’s Mila AI institute has noticed countries and their militaries hurtling toward the technology at the same time the globe is settling into a Cold War-like environment.

He says the globe needs to treat AI with “extreme” caution because technology is powerful and can ultimately produce both good and bad.

When a technology is as powerful as AI, he says democratic governance becomes even more important.

Bengio's remarks came on the heels of the federal government's voluntary code of conduct which is meant to encourage companies to ensure their AI systems are safe, fair and transparent, have human oversight and accountability mechanisms and are able to thwart cyberattacks.

Signatories, including OpenText, Cohere, BlackBerry and Telus, have agreed to test AI systems in advance of deploying them to uncover potential risks and biases, and promised to implement measures to mitigate the dangers.

This report by The Canadian Press was first published Sept. 28, 2023.

 

Here's how much Canada's top athletes make on Instagram

Ben Cousins, BNN Bloomberg

Canada midfielder Alphonso Davies (19) controls the ball against Honduras during first half CONCACAF Nations 

League soccer action in Toronto on Tuesday, March 28, 2023. THE CANADIAN PRESS/Nathan Denette

Canada’s top athletes are making millions playing their sport and are doing pretty well on social media as well.

A new report from the online casino platform PlayOJO found that Canadian soccer star Alphonso Davies is the most influential Canadian athlete, raking in a whopping $87,176 per sponsored Instagram post and $113,424 per sponsored reel.

In the past year, Davies has sent out 20 sponsored reels and six sponsored posts to his 5.4 million followers, with partnerships including the Bank of Montreal, Nike, BioSteel and EA Sports, among others.

In total, five basketball players – Tristan Thompson, Shai Gilgeous-Alexander, Andrew Wiggins, Jamal Murray and RJ Barrett – cracked the Top 10 list, while Toronto Blue Jays slugger Vladimir Guerrero Jr., retired MMA fighter Georges St-Pierre, the WWE’s Adam Copeland and tennis player Genie Bouchard also made the list.

“It’s fascinating to see which Canadian players and sports have the most influence on social media and who has the opportunity to make significant earnings outside of their sport,” a spokesperson for PlayOJO wrote in a news release.

“Soccer has always been known for its global popularity, but it’s interesting to see the primary sport in the top 10 is basketball, and a range of sports, such as tennis and MMA, also making an appearance.”