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Trans Mountain pipeline expansion cost climbs 70%, now $21.4B – Global News

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An eye-popping 70 per cent increase in the projected price tag for the Trans Mountain expansion was met Friday by jeers from environmental groups and a pledge from the federal government to put no additional public money toward the project.

But Canada’s oil and gas industry remains staunchly behind a project it says remains essential to the national interest, in spite of newly disclosed budget overruns that peg the new cost of the Trans Mountain expansion at $21.4 billion, up from an earlier estimate of $12.6 billion.

“We remain fully supportive of this world-class infrastructure project which is vital to Canada’s long-term economic success and energy security,” said Suncor Energy Inc. chief executive Mark Little, in a statement released just hours after federal Crown corporation Trans Mountain Corp. released its new cost projections for the project.

Read more:

Trans Mountain Pipeline expansion construction complete in Edmonton area

“While no one wants to see cost increases, they are often a fact of life with projects of this size and in this case were largely beyond Trans Mountain’s control,” said Alex Pourbaix, CEO of Cenovus Energy Inc., in a separate statement.

The 1,150 km Trans Mountain pipeline carries 300,000 barrels of oil per day, and is Canada’s only pipeline system transporting oil from Alberta to the West Coast.

Its expansion, for which construction is currently underway, will essentially twin the existing pipeline, raising daily output to 890,000 barrels to support Canadian crude oil production growth and ensure access to global energy markets.

Trans Mountain was bought by the federal government for $4.5 billion in 2018, after previous owner Kinder Morgan Canada Inc. threatened to scrap the pipeline’s planned expansion project in the face of environmentalist opposition.

On Friday, Trans Mountain Corp. blamed the surging cost projections for the project on the COVID-19 pandemic and the effects of the November 2021 flooding in British Columbia, as well as project enhancements, increased security costs, route changes to avoid culturally and environmentally sensitive areas, and scheduling pressures related to permitting processes and construction challenges in difficult terrain.

The company also pushed back the projected completion date to the third quarter of 2023. The pipeline expansion was originally expected to be complete sometime this year.

Following the company’s update, Deputy Prime Minister Chrystia Freeland said that Trans Mountain Corp. will need to secure third-party funding to complete the project, either through banks or public debt markets.

“I want to assure Canadians there will be no additional public funding for TMC,” Freeland told reporters in Ottawa, adding the government has engaged BMO Capital Markets and TD Securities to provide financial advice on the project and has been assured by both parties that the project remains commercially viable.

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Indigenous non-profit group seeks ownership stake in Trans Mountain Pipeline

Freeland said the federal government still believes the Trans Mountain expansion is a “serious and necessary project.”

“This project is in the national interest and will make Canada and the Canadian economy more sovereign and more resilient,” she said.

Oil and gas industry representatives were quick to defend Trans Mountain on Friday, arguing the project’s operators have been hit by a whammy of misfortune they could not have predicted — everything from supply chain and inflation issues triggered by COVID-19 to weather-related catastrophes like wildfires and flooding.

“It’s very easy to just look at the numbers and look at the figures, but you have to actually put it in context,” said Tristan Goodman, president of the Explorers and Producers Association of Canada. “Overall, we’re actually still very confident that this is moving in the right direction.”


Click to play video: 'B.C. floods: Shutdown of TMX pipeline could impact gas supplies'



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B.C. floods: Shutdown of TMX pipeline could impact gas supplies


B.C. floods: Shutdown of TMX pipeline could impact gas supplies – Nov 18, 2021

But environmentalists were quick to use words like “white elephant” and “boondoggle.” Keith Stewart of Greenpeace Canada pointed out that this is not the first time the budget for the Trans Mountain expansion has ballooned — back in 2015, Kinder Morgan estimated the project would cost $5.4 billion, and that rose to $7.4 billion in 2017 just before the Trudeau government bought it.

“This project was crazy from a climate perspective when it was supposed to cost $7.4 billion, but at $21.4 billion and rising it is now economic madness,” Stewart said.

Sven Biggs, Canadian oil and gas program director for Stand.earth, said the Trans Mountain pipeline expansion is a threat to the climate and the federal government should cancel it.

“Ironically, the latest delays (to project construction) were caused in large part by the recent flooding in B.C., which has been linked to climate change,” Biggs said in an emailed statement.

Read more:

Trans Mountain Pipeline expansion construction complete in Edmonton area

Spiraling construction costs mean more borrowing and higher interest costs, which will make the pipeline less profitable to an eventual buyer, said Richard Masson, executive fellow with the University of Calgary’s School of Public Policy.

That’s a problem, Masson said, because the federal government has indicated it does not want to be the long-term owner of the pipeline. On Friday, Freeland said the government will launch a divestment process later this year.

A number of Indigenous-led initiatives have already come forward saying they will seek an equity stake in the project.

Masson added that while Canada’s energy industry can get by without the added pipeline capacity for now, thanks to the addition of Enbridge Inc.’s Line 3 replacement project that came online last fall, the Trans Mountain expansion is still sorely needed in the long-term.


Click to play video: 'TransMountain pipeline opponents set up rail blockade in Vancouver'



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TransMountain pipeline opponents set up rail blockade in Vancouver


TransMountain pipeline opponents set up rail blockade in Vancouver – Sep 21, 2020

The newly announced budget overruns and cost increases, he said, are just the latest example of how difficult it is to complete major infrastructure projects in this country.

“Canada’s got a lot of resources, the world needs our resources, but we’re just having so much trouble actually developing them in a cost-effective way,” Masson said.

Also on Friday, Trans Mountain Corp. announced the retirement of president and CEO Ian Anderson, effective April 1.

“Ian led a project that continues to progress while setting new standards for major pipeline project execution, including unprecedented levels of involvement from Indigenous Peoples and communities,” board chair William Downe said in a news release.

Anderson, who has been with Trans Mountain and its predecessor companies for 40 years, was previously president of Kinder Morgan Canada.

© 2022 The Canadian Press

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Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

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Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

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VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

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

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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

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

Companies in this story: (TSX:TRZ)

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