Workers lay pipe during construction of the Trans Mountain pipeline expansion in Abbotsford, B.C., on May 3, 2023.DARRYL DYCK/The Canadian Press
Alberta Investment Management Corp. has its eye on the Trans Mountain pipeline as a potential investment, with the expansion project creeping closer to completion.
Edmonton-based AIMCo is Canada’s sixth-largest pension-fund manager, including plans for public servants, teachers, municipal employees, law-enforcement officers and academics in Alberta. The Crown corporation is coming out of a complete overhaul, after it lost $2.1-billion on a trading strategy gone wrong under previous leadership when COVID-19 struck in the spring of 2020.
AIMCo had been making complex derivative bets against market volatility for years, and profiting from them. But the strategy failed spectacularly when markets plunged early in the pandemic.
The cost of the pipeline expansion, meanwhile, has ballooned dramatically to a projected $30.9-billion, from a 2017 estimate of $7.4-billion.
But AIMCo chief executive Evan Siddall told BNN Bloomberg in an interview aired Thursday that the fund manager has an active file on Trans Mountain, and “would look at it” as an investment. “The government knows that, and we’re keeping track of the situation,” he said.
AIMCo said in an e-mail that the fund makes large-scale investments globally in all asset classes, including infrastructure.
“The Trans Mountain pipeline is an example of the type of Canadian infrastructure asset that AIMCo, along with other investment managers, would consider if it were made available,” it said.
The existing 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. It was bought by the federal government for $4.5-billion in 2018. The expansion will raise daily output to 890,000 barrels.
Trans Mountain Corp. took over the pipeline when Ottawa bought it from Kinder Morgan in 2018, after the company threatened to scrap the expansion project in the face of environmentalist opposition.
In 2020, the expected price of the expansion jumped to $12.6-billion. In 2022, the federal government said that no more public funds would be spent on the project after the cost ballooned once again, to $21.4-billion, and completion was delayed until late 2023.
Trans Mountain expects the long-delayed project will be in service near the end of the first quarter of 2024, though the date is subject to change, the corporation said in an e-mail this week.
Mr. Siddall took over leadership of AIMCo in July, 2021. In slightly more than two years at the helm, he has changed most of its executive team, launched a revamp of its technology systems, opened new offices abroad and shifted the way it manages risk in its investments.
The current Alberta government is a vocal cheerleader for the oil and gas sector, which drives revenues to the provincial coffers. And under former premier Jason Kenney, the United Conservative Party government made a $1.3-billion bet on the Keystone XL pipeline in 2020 with Calgary-based pipeline builder TC Energy Corp. TRP-T, when Donald Trump was still in the White House.
The US$11.5-billion pipeline was designed to ship up to 830,000 barrels of crude a day from Hardisty, Alta., to Steele City, Neb. The pipeline was among a series of projects seen as crucial to Canada’s energy industry that became symbols for the North American climate movement.
That bet failed when U.S. President Joe Biden decided to kill the project in 2021, and TC Energy terminated its plans to build the project.
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.
