Warren Buffett’s Berkshire Hathaway has decided against investing $4-billion in a project to bring Alberta natural gas to port in Saguenay, Que., citing Canada’s “current political context.”
Énergie Saguenay revealed Thursday it lost its major potential investor in the $14-billion GNL Québec project, making it the latest Canadian energy project to encounter hurdles caused by low oil and gas prices, political opposition and resistance from Indigenous people and environmentalists.
“A major private investor who was near investing in the project decided at the last minute to not proceed,” said Stéphanie Fortin, director of public affairs for Énergie Saguenay. “The reason evoked was Canada’s current political context.”
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Ms. Fortin declined to name Berkshire Hathaway, the conglomerate giant led by billionaire Mr. Buffett, as the investor who pulled out. But a Quebec government source confirmed the information first reported by La Presse on Thursday. The source was granted anonymity because they were not authorized to speak on the matter.
Ms. Fortin also declined to name specific parts of the political context that led to the decision. “All of the elements creating a certain instability, questions among investors, we’ve seen on different projects across the country,” Ms. Fortin said.
Meanwhile on Thursday, Mohawks from the Kahnawake reserve south of Montreal lifted their blockade on a Canadian Pacific Railway line. A group of Mi’qmaqs in eastern Quebec followed suit a short time later, releasing from paralysis a small regional railway in the Gaspé. The two blockades, in support of Indigenous opponents of a British Columbia natural gas pipeline, were the last of a series of protests that disrupted rail transport across Canada for a month.
Énergie Saguenay’s GNL Québec project, including a liquid natural gas facility and a 750-kilometre natural gas pipeline from an existing line in Northeastern Ontario across Northern Quebec, is heading into federal and provincial environmental review. The first Quebec hearings start March 16. The environmental reviews must be complete before final financial commitments are made in 2021, Ms. Fortin said.
The planned route of the pipeline crosses several traditional Indigenous lands. The terminal at Saguenay will load ships that will cross waters occupied by beluga and fin whale populations. On Thursday, 250 doctors signed a letter warning the Quebec government of health impacts from the gas industry.
Quebec Premier François Legault warned last week that the pipeline project must gain “social acceptability” if it is to proceed, after the Wemotaci Atikamekw Council said it hasn’t consented to the project. Prime Minister Justin Trudeau said Thursday the atmosphere has changed for energy project proponents.
“We have to do more to demonstrate the jobs we are creating, the investment we are attracting, can succeed in a world where the reality of climate change is hitting harder all the time,” Mr. Trudeau said.
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Tim McMillan, president and chief executive officer of the Canadian Association of Petroleum Producers, wasn’t surprised by the news, but acknowledged his disappointment.
The move by investors follows a string of project cancellations over the past few years, he said, including the recent decision by Teck Resources Ltd. to withdraw its Frontier oil sands mine application, and various pipeline projects being nixed or delayed.
“This investor not willing to invest in Canada has been the backdrop for several major project cancellations,” he said. “It doesn’t seem to be getting better. In fact, recent events in Canada are continuing to shake confidence in the types of investments we absolutely need to be attracting.”
Pointing to federal regulatory changes and multiple rail blockades, Mr. McMillan said the problem has spread from Western Canadian energy projects to national agriculture, mining and shipping sectors.
Mr. McMillan “absolutely” thinks the GNL project’s location in Quebec will draw more attention from Ottawa. “I hope it’s a wake-up call for multiple governments to re-establish Canada as a place where the rule of law is consistent and where our regulatory system is clear and transparent,” he said.
Dale Nally, Alberta’s Associate Minister of Natural Gas, took aim at weeks of rail and port blockades, saying in an e-mail it is “undeniable” they have deterred international investors from doing business in Canada.
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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
