As the Canadian Pacific Railway locomotive moves along the tracks in Calgary, something is clearly amiss.
It’s the typical size and look that you’d expect, but what’s absent is the low rumbling noise of the diesel engine.
Instead, this locomotive is powered by hydrogen fuel cell and battery technology as part of a trial by the railway to explore whether the low-emission vehicles are strong enough and reliable enough to potentially one day revolutionize operations at the company.
Over the last several years, there has been an increased focus on the potential for hydrogen to decarbonize many industries and help countries reach their climate goals, while revamping energy systems along the way.
The next 12 months will be critical, experts say, in understanding whether that vision could plausibly become a reality in the near future or remain part of the imagination for decades to come.
There is excitement in the Canadian industry about what 2023 will bring as several demonstration projects are set to take place, while construction will also begin on a massive new hydrogen production facility.
Testing underway
For CP Rail, the hydrogen locomotive completed its first “revenue trip” a few months ago with the expectation to have the trains operating in Vancouver, Edmonton and Calgary by the end of 2023. The next step will be testing out the technology through the Rocky Mountains.
“It’s a perfect test bed. If you can operate there: heavy haul, cold temperatures, the most challenging operational conditions I’ve ever experienced in my career. And if it works there, it will work everywhere,” CP’s chief executive, Keith Creel, said during a speech at the RailTrends 2022 conference in November.
“If this proves its mettle and it shakes out through the very tough validation test we’ll give it, [it will] truly be transformational for this industry.”
Relying on hydrogen as a fuel source isn’t a new concept, but technology is advancing to improve performance, at the same time as there is an increased focus on climate change around the world.
A new City of Edmonton hydrogen-powered bus sits in the parking lot of a transit garage. A second hydrogen bus will operate in nearby Strathcona County as part of a one-year pilot project. (Julia Wong/CBC)
This year will mark the start of a few other experiments as hydrogen-powered buses and semi-trucks hit the road.
A pair of transit buses will transport passengers in Edmonton and nearby Strathcona County as part of a one-year pilot project.
New production plant
Meanwhile, a hydrogen fuelling station is under construction in Edmonton to allow the Alberta Motor Transport Association to test out semi-trucks on the province’s highways. The organization is looking to offer up to four different truck models this year for local companies to try out.
“I think the next 12 months is largely a proof of concept,” said David Layzell, an energy systems architect with the Transition Accelerator — a non-profit organization set up to help Canada reach its climate goals — and professor emeritus in biological sciences at the University of Calgary.
David Layzell, an energy systems architect with the Transition Accelerator and professor emeritus at the University of Calgary, says for hydrogen to be cheaper than diesel, the higher cost of transporting hydrogen and constructing the fuelling station in Edmonton pose challenges. (CESAR)
“We can actually make hydrogen cheaper than diesel fuel today,” he said, although the challenge is the much higher cost of transporting hydrogen and constructing the fuelling station.
“We are only going to get those prices down by getting to scale,” Layzell said.
Hydrogen is an energy carrier, and experts say it can be used primarily for heating and as a fuel for transportation.
The amount of pollution associated with hydrogen depends on how it’s made. For instance, if solar or wind facilities — rather than a coal power plant — produce the electricity that is used to create hydrogen, the emissions are relatively low.
Construction has just begun in northeast Edmonton on the largest hydrogen plant in the world by Air Products Canada. The $1.6-billion facility will use natural gas to produce hydrogen with the goal of sequestering 95 per cent of the emissions and store them underground.
François-Philippe Champagne, federal minister of innovation, science and industry, is shown in Edmonton in November 2022, announcing funding toward construction of the $1.6-billion Air Products hydrogen plant, the largest in the world. (Janet French/CBC)
“The challenge with hydrogen is a little bit of the chicken-or-the-egg challenge,” said Kevin Krausert, chief executive of Avatar Innovations Inc., a Calgary-based firm that helps develop energy transition technologies.
“Who’s going to build a major hydrogen facility if there’s no demand for it, and who’s going to build a whole bunch of hydrogen trucks or trains if there’s no hydrogen to supply it? So you’ve got this sort of supply-demand challenge.”
Construction of the Air Products facility, he said, begins to overcome that problem.
‘Too little, too late’
There is momentum in the hydrogen sector in Canada, but some experts warn that the most critical question in the next 12 months is not so much about the technology itself but how willing governments are to support the industry.
“That is relative to what’s going on to the south of us with the United States’ policy supports that are very strong and very attractive and could take all the capital [investment] that we might spend up here and divert it southward,” said Ed Whittingham, an Alberta-based public policy consultant.
Alberta-based public policy consultant Ed Whittingham says Canada will need to step up if it wants to be competitive in the hydrogen technology field with the U.S., which under new legislation could cover up to 75 per cent of the cost to produce low-carbon hydrogen. (CBC)
The U.S. government’s Inflation Reduction Act [IRA] includes significant subsidies to not only offset the cost of constructing a hydrogen facility but to subsidize its operations, among other funding programs.
In some cases, Whittingham said, up to 75 per cent of the cost to produce low-carbon hydrogen could be covered by the U.S. government.
“What really is going to determine whether hydrogen stays niche and stays small scale in Canada or whether it goes mainstream and Canada really becomes a serious competitor is our response to what the U.S. has done,” he said.
“And it could be a case, frankly, of too little, too late.”
The federal government is proposing a clean hydrogen investment tax credit to entice companies to develop new clean hydrogen projects. The tax credit will be worth at least 40 per cent for projects that meet certain labour and low-emission requirements.
In its 2022 fall economic statement, the federal government warned that the subsidies offered in the United States were more generous and increase the challenge to attract investment north of the border.
What’s holding back the hydrogen industry in Canada?
Ed Whittingham is a public policy consultant and the former executive director of the Pembina Institute.
“Canada will need to do even more to secure our competitive advantage and continue creating opportunities for Canadian workers,” the report said. “Without new measures to keep pace with the IRA, Canada risks being left behind.”
Ottawa is currently accepting feedback on its proposed hydrogen tax credit.
The $1.6-billion Air Products facility under development in Edmonton is receiving $300 million from the federal government toward construction and an additional $161.5 million from the Alberta government once the plant is operational.
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.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
