Ottawa’s plan to cap emissions in the oil and gas sector is earning mixed reactions, with industry players and some provincial politicians opposing the move that environmental groups are celebrating as “necessary” to fight climate change.
On Thursday, Environment Minister Steven Guilbeault and other federal ministers announced a framework plan to cut emissions in the sector by more than one-third by 2030.
Under the framework, the sector will be forced to cut emissions by 35 to 38 per cent compared to 2019 levels, but can buy offset credits through a “cap-and-trade” system.
Energy and Natural Resources Minister Jonathan Wilkinson told BNN Bloomberg that the announcement is crucial in Canada’s work to combat climate change.
“Every sector of the economy needs to contribute in the fight against climate change that Canada and other countries around the world are waging,” Wilkinson said in a Thursday television interview following the announcement.
“The world is moving from an economic perspective and this is actually about the competitiveness of the oil and gas sector moving forward.”
Wilkinson said if Canada’s oil and gas sector can be a world leader in decarbonization, other countries will find Canadian oil attractive.
“Low-carbon intensity fuels are going to have value in a world that increasingly is going to value them.”
ALBERTA CALLS MEASURES ‘ATTACK’ ON THE PROVINCE
Alberta Premier Danielle Smith, whose government has repeatedly clashed with Trudeau’s federal Liberals over climate policies aimed at oil and gas, called the policy and “intentional attack” on her province by Ottawa and vowed the fight the measure.
“Alberta owns our resources, and under the Constitution we have the exclusive jurisdiction to develop and manage them,” Smith and Alberta Environment Minister Rebecca Schulz said in a written statement.
The provincial politicians called the federal measure “punitive” towards the oil and gas sector and argued it risks “hundreds of billions of dollars of investments in Alberta’s and Canada’s economies and core social programs.”
“Over the coming months, our cabinet and caucus will develop a constitutional shield in response to this and other recent attacks on our province by what is fast becoming one of the most damaging federal administrations in Canadian history.”
SECTOR SAYS PLAN IS ‘UNACCEPTABLE’
Oil and gas industry stakeholders were swift to denounce the federal government’s announcement.
Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers, said the emissions cap puts a ceiling on oil and gas production in the sector.
The industry association said the proposed system would result in “significant curtailments” on industry production, calling the framework “effectively a cap on production.”
“At a time when the country’s citizens are experiencing a substantial affordability crisis, coincident with record budget deficits, the federal government risks curtailing the energy Canadians rely on,” she said.
Wilkinson said the announcement shows the government actually expects Canada’s energy sector to increase production under these regulations.
“Between now and 2030, we anticipate increases in production in Canada and around the world, but we are going to reduce emissions in line with what industry themselves say they can do,” he said.
Wilkinson added even as Canada works to decarbonize in its climate change fight, he still expects there will be a market for oil and gas in the future.
“The demand for oil and gas is never going away entirely,” he said. “There are significant quantities of oil that are used for things like carbon graphite, asphalt and chemicals … gas can be used for ultra-low-carbon hydrogen, so there’s a certain portion of the market that’s going to be there even in a net-zero world.”
Pathways Alliance, a group of six major energy firms working to develop carbon capture projects, took a much more muted tone, however, and said it would need more time analyzing the framework “to determine how it may impact oil sands operations.”
The Explorers and Producers Association called the measures “unnecessary and unacceptable” and argued that the sector is already “achieving significant emissions reductions” on its own.
“Our sector must compete for investment,” the organization wrote in a statement.
“This requires balance, pragmatism, and incentives instead of punitive measures like an emissions cap that further damage Canada’s reputation as a place where projects are far too expensive, goalposts are uncertain, and environmental performance is not recognized.”
The Canadian Association of Energy Contractors also called for more “pragmatic and affordable policies” as the world decarbonizes.
“The federal government’s emissions cap will hinder Canada’s ability to attract capital. It means higher energy costs and fewer jobs for Canadian energy workers,” Mark Scholz, president and CEO of the CAOEC, wrote in a statement.
CLIMATE GROUPS CALL MOVE ‘NECESSARY’
Climate groups, on the other hand, welcomed the policy, though some flagged a lack of details around its implementation.
Rick Smith, president of the Canadian Climate Institute, called the emissions cap “reasonable and necessary” and said it should be implemented immediately.
“The stubborn rise in emissions from (the oil and gas sector) is wiping out climate progress in other parts of the economy,” he wrote in a statement.
“Capping oil and gas emissions is a critical element of a package of policies that can ensure Canada meets its emissions reduction targets while supporting the competitiveness of the sector.”
The Canadian Climate Institute has included an emissions cap in its list of four ways to reduce emissions in the oil and gas sector, along with increased regulations to reduce leaks, added support for carbon capture policies and government-backed investments in the green energy transition.
“The oil and gas cap announced today will help the oil sands industry, in particular, deliver on its commitment to work toward net-zero emissions by 2050,” Smith said. “An increasingly stringent cap on oil and gas emissions can drive innovation to better position Canada’s energy sector to compete in global markets.”
Janetta McKenzie, acting director of the oil and gas program at the clean energy think tank the Pembina Institute, called the announcement a “good news day for climate action in Canada.”
“We commend the federal government for developing the framework to reduce greenhouse gas emissions from Canada’s highest-emitting sector by far,” she wrote in a statement.
She noted that the proposed level of the cap is lower than a previous estimate, but still called it “a real reduction from Canada’s highest-emitting sector” and “completely doable.”
Meanwhile, Clean Energy Canada, a think tank that “works to accelerate Canada’s clean energy transition” also called the announcement “necessary and fair.”
“Canada should be commended for putting in place the world’s first national oil and gas emissions cap by a major fossil-fuel-producing country,” Mark Zacharias, executive director at Clean Energy Canada, wrote in a statement.
“The cap is the last line of defence to ensure that emissions from Canada’s fossil fuel industry don’t put the country offside its climate commitments.”
Zacharias noted, however, that the announcement was “light” on details about how compliance would be enforced and questioned the 2030 deadline.
“The longer the government waits, the harder it will be for industry to make the necessary investments to meet the target,” he said. “Long-term clarity and certainty are key ingredients for investors, and Canada should provide plenty of both.”
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.
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.
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.
