Enbridge cites economic uncertainty, a challenging regulatory environment, higher interest rates and fierce competition for growth
Citing persistent economic headwinds, Calgary-based pipeline giant Enbridge signalled it’s going to cut its workforce by 650 people next month, while the midstream sector faces a changing landscape.
The energy infrastructure firm, which has a large presence in both Canada and the United States, sent a memo Tuesday informing its staff of planned cuts across the company, which will begin in February and be completed by March 1.
“While we delivered strong financial performance in 2023, cost-reduction measures are necessary to maintain our financial strength, be more cost competitive and enable us to grow.”
In the memo, Enbridge pointed to ongoing economic uncertainty, a challenging regulatory environment, higher interest rates, fierce competition for growth, and the reverberations from geopolitical developments for contributing to “increasingly difficult business conditions.”
According to its website, the company has more than 12,000 employees, mainly based in Canada and the United States. The cuts represent slightly less than six per cent of its total workforce.
Enbridge said it will look to reduce vacancies and contract positions, as well as redeploy staff.
“Reducing our operating costs and strengthening our competitiveness will enable us to weather near-term challenges,” the statement said.
Analyst Stephen Ellis with Morningstar noted pipeline companies in the North American industry aren’t benefiting as much from service rates that are tied to inflationary increases as they have in recent years, while rising interest rates have heightened their need to focus on cost-cutting.
During the third quarter of 2023, Enbridge reported adjusted earnings of $1.27 billion, down from $1.37 billion during the same period in 2022.
Enbridge is the largest pipeline company in Canada and the sector has been facing a shifting landscape during the energy transition.
Last September, Enbridge bought three U.S. natural gas utilities — East Ohio Gas Co., Public Service Company of North Carolina (PSNC) and Questar Gas Co. — from Richmond-based Dominion Energy for $19 billion.
The acquired companies have more than 3,000 employees. The deal was the largest acquisition for Enbridge since 2016, when it bought Houston-based Spectra Energy for $37 billion.
In December, Enbridge sold off its interest in the Alliance natural gas pipeline and the Aux Sable joint ventures for $3.1 billion.
Enbridge, which operates Canada’s Mainline crude pipeline network, will soon see increased competition from the Trans Mountain expansion project, Ellis noted.
Calgary-based TC Energy, which has aggressively sold assets in the past year, is also planning to spin off its oil pipeline network — including the Keystone system — into a new publicly traded company named South Bow. The move is expected to occur in the second half of this year.
Laura Lau, chief investment officer with Brompton Group, which has previously owned stock in Enbridge, said Tuesday the midstream sector is facing increased pressure due to the effect of high interest rates and the difficulty to build major infrastructure projects in Canada and the United States.
She pointed to Friday’s decision by the Biden administration to put a temporary pause on approving new LNG export projects as another example of government policy that could impede the industry.
“It used to be, in the good old days, you could do these big projects. It’s harder to find growth now and it’s harder to make numbers work with higher interest rates,” Lau said.
“The operating environment is getting tougher and tougher for permitting.”
There have been some layoffs in the Canadian oilpatch in the past year, with Suncor Energy announcing last summer it was cutting 1,500 positions.
The Canadian economy has largely stalled since the middle of 2023. It’s expected to remain weak in the first quarter before growth gradually resumes, with an annual GDP expansion of just under one per cent forecast by the Bank of Canada’s latest monetary policy report.
Meanwhile, energy prices have dipped in recent months and it could mean less cash flow for the country’s oil and gas industry in 2024.
Based on the current pricing outlook for oil and natural gas, industry revenues in Canada are projected to drop by 12 per cent to $162 billion from last year’s levels, said Jackie Forrest, executive director of ARC Energy Research Institute.
“The lower commodity prices are putting a bit more fiscal pressure (on). I’m not sure that will result in layoffs but, for sure, you’re going to see the slowdown in spending,” Forrest said.
“Add to that the massive policy that we’re getting here — the layering of policy on top, potential for legal challenges, political uncertainty. I think that’s another factor that’s going to slow down investment over the next year.”
Chris Varcoe is a Calgary Herald columnist.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:GOOS)
The Canadian Press. All rights reserved.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
The Canadian Press. All rights reserved.
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:TD)
The Canadian Press. All rights reserved.
New Brunswick Premier Blaine Higgs expected to call provincial election today
Alberta Premier Smith aims to help fund private school construction
Sutherland House Experts Book Publishing Launches To Empower Quiet Experts
Arch Manning to get first start for No. 1 Texas as Ewers continues recovery from abdomen strain
Canada’s Probate Laws: What You Need to Know about Estate Planning in 2024
Flames re-sign defenceman Ilya Solovyov, centre Cole Schwindt
Quebec won’t fund graphite mine project tied to Pentagon; locals claim ‘victory’
New Brunswick Premier Blaine Higgs kicks off provincial election campaign
