Pumpjacks pump crude oil near Halkirk, Alta., June 20, 2007. Alberta’s UCP government says it will end in December monthly oil curtailment quotas introduced by the previous NDP government at the beginning of 2019 to support oil prices by aligning surging output with static pipeline capacity.THE CANADIAN PRESS/Larry MacDougal
Alberta’s oil curtailment quotas are set to end in December, nearly two years after the previous NDP government introduced them to support oil prices, the UCP government announced Friday.
The curtailments, reset monthly, are no longer necessary because 16 per cent of Alberta’s crude oil production is off-line, down from 22 per cent at the start of the COVID-19 pandemic, the government said in a news release.
It added it will retain the regulatory authority to reintroduce the measures if necessary in 2021.
“Maintaining the stability and predictability of Alberta’s resource sector is vital for investor confidence as we navigate the economic conditions brought on by the pandemic, the commodity price crisis and the need for pipelines,” said Energy Minister Sonya Savage.
“This purposeful approach serves as an insurance policy, as it will allow Alberta to respond swiftly if there is a risk of storage reaching maximum capacity while enabling industry to produce as the free market intended.”
The province quoted Genscape in noting that there were about 20 million barrels of oil in storage as of Oct. 16, down from nearly 40 million when the curtailment program began.
High inventory levels are blamed on the inability of the pipeline system to match the province’s growing oil production levels, mainly from new and expanded oilsands projects.
The program has been controversial from the start, with oil producers such as Cenovus Energy Inc. largely in favour of it while oil producers that also own refining operations, such as Imperial Oil Ltd., adamantly opposed.
“We have always maintained that a market-based approach is best and support the government’s move to end the current program,” said Husky Energy Inc. spokeswoman Dawn Delaney on Friday.
In a report, RBC analyst Greg Pardy said the end of the program is beneficial for producers including Cenovus, Suncor Energy Inc., Canadian Natural Resources Ltd. and others that have been forced to choke back production at their facilities.
Suncor, for example, has not been able to maintain full production at its Fort Hills oilsands mine after expanding its capacity to 194,000 barrels per day in 2018. Earlier this year, it shut down one of its two extraction trains because of low oil prices.
However, a rebound in production could result in widening of the price discount on western Canadian crude versus U.S. benchmarks, Pardy warned, noting that lower oilsands output so far this year has reduced the discount on western Canadian Select bitumen-blend oil.
The province’s allowable production quota was gradually raised from 3.56 million barrels per day in January 2019 to 3.81 million bpd by year-end, a level maintained through the first 11 months of 2020.
The province says production was actually 3.1 million bpd in August and it’s not expected to exceed export capacity before mid-2021.
The government’s move to stop the program makes sense given the impact of the COVID-19 pandemic on the oil market, said Ben Brunnen, vice-president of fiscal and economic policy for the Canadian Association of Petroleum Producers.
“This enables companies now to be making decisions from a production perspective based on market fundamentals as opposed to government-mandated limitations,” he said.
But he added it’s unfortunate the government felt obliged to intervene in the market in the first place.
“CAPP supports transparent and unconstrained market access to ensure all of Alberta’s oil production is delivered to desired markets at market clearing prices,” he said.
The government says it extended what was intended to be a short-term measure because of ongoing delays to pipeline projects that would increase the province’s export capacity.
Pardy said the completion of pipelines including Keystone XL, the Trans Mountain expansion, and Enbridge Line 3 “should enhance the province’s permanent ability to balance production and takeaway capacity, helping to ensure Alberta’s resources are exported at full value.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
