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B.C. restaurants: 'Shame on Dr. Henry' for NYE alcohol sales ban – BC News – Castanet.net

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B.C.’s restaurant sector has a simple, direct response to the Provincial Health Officer Bonnie Henry’s decision – announced only one day ahead of time – to ban alcohol sales from 8 p.m. on New Year’s Eve to 9 a.m. the next day.

“We are profoundly disappointed because she has left a trail of disaster by making this decision,” said Ian Tostenson, president/CEO of the BC Restaurant and Food Services Association. “The decision was arbitrary, and the timing of it is terrible because it’s going to cost hundreds of thousands of dollars – if not millions. And it was unnecessary.

“Shame on Dr. Henry this time,” he concluded.

The ban was announced in a hastily called news conference on Wednesday afternoon – a day where provincial officials previously said they would have issued a press release for its daily COVID-19 update rather than holding a press briefing.

Instead, Henry and B.C. Health Minister Adrian Dix announced the ban at the event roughly 29 hours before it was to come into effect. The ban’s purpose, Henry said, is to decrease the late-night consumption of alcohol that leads to “risky behaviour” such as table-hopping and social gatherings outside of individual households – which, Henry said, has been proven to aid the spread of COVID-19.

Tostenson said that the announcement caught the entire industry by surprise because there was “zero consultation” from the province that this ban was under consideration.

“We all knew it’s going to be New Year’s Eve tomorrow; it’s not new,” he said. “We could have thought about this ahead of time. Industry could have worked with Dr. Henry to develop a plan… This didn’t need to happen.”

At the press conference, Henry said in response to a question about the last-minute nature of this decision that the NYE alcohol sales ban was actually under consideration “for some time” and that she felt it was something that needed to be done given what she has seen and heard about people’s New Year’s celebration plans.

She added the 8 p.m. time was actually decided upon with restaurants in mind.

“I know that many restaurants are planning two sittings, and the second sitting usually happens at around 7 to 7:30 p.m.,” Henry said. “So this does give people the opportunity to order wine with their meals… We tried to time it so that restaurants can have two sittings and provide food service, so we hope it’s not going to impact those restaurants who are doing a great job of keeping people safe.”

That explanation, however, does not fly with Tostenson or B.C.’s restaurant owners.
“In a lot of restaurants, 7:30 p.m. is the first sitting,” Tostenson said, adding that most restaurants have second sittings around 8 p.m. or later – past the newly imposed deadline.

One easy solution, he countered, would have been to set the deadline one hour later at 9 p.m. to cover the vast majority of restaurants’ second sittings – something that restaurant owners would have told Henry and the province if given the chance.

“We have a restaurant downtown that has reservations for 500 people – mostly couples – spread out over two sittings for NYE,” Tostenson said. “The second sitting starts at 8 p.m., and now they are calling guests to get everyone to come in an hour earlier. That won’t work with a lot of guests, so we can see as many as 50% cancelling. If you consider an average of $100 per table – and that’s a pretty light NYE bill – you have just cancelled about $25,000 in sales at just one restaurant.

“If we kept alcohol sales open until 9 p.m., that same restaurant would have been able to retain roughly 80% of their business on that night. That’s how simple it was with just a one-hour difference; but Dr. Henry doesn’t know that because she doesn’t run restaurants. Had we collaborated with Dr. Henry, we would have been able to explain it to her.”

Henry, for her part, said the 8 p.m. time is set in stone.

“Food is perfectly fine, but last call needs to be at 8 o’clock,” she said. “… What we are concerned about is the people who want to stay out later and consume alcohol – which leads to behaviours that would put restaurants and other patrons at risk.”

Tostenson remains miffed, however, that no one from Henry’s office or the province gave the industry any direct contact – even on Wednesday, the day of the announcement. With Henry noting she is already eyeing potential issues with upcoming gathering dates like St. Patrick’s Day, Tostenson said what happened this time cannot happen again.

“Unless you want the entire industry to go insolvent, you can’t have 24-hour decisions going forward,” he said. “If we had a chance to consult with the province weeks ahead of time, Dr. Henry may have still said it has to be an 8 p.m. deadline. In that case, we can at least tell people that – for reasons that we understand – the industry will comply. And that still gives us two or three weeks to plan.

“Now, things are in chaos. We fully support the health objectives, and we’ve always supported Dr. Henry. But this could have all been avoided by simple consultation with an industry that’s determined to do the right thing.”

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Tourmaline to expand in Montney with C$1.1 billion deal for Black Swan

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Canada‘s Tourmaline Oil Corp said on Friday it would buy privately owned Black Swan Energy Ltd in a C$1.1 billion ($908.79 million) deal, as the oil and gas producer looks to expand in the Montney region, one of North America’s top shale plays.

Canada‘s Montney, which straddles Alberta and British Columbia, has seen a wave of consolidation as companies buckled under collapsing oil prices amid the COVID-19 pandemic.

Tourmaline said the deal represents a key part of its ongoing North Montney consolidation strategy and the company sees the area as a key sub-basin for supplying Canadian liquefied natural gas.

The company in April acquired 50% of Saguaro Resources Ltd’s assets in the Laprise-Conroy North Montney play for $205 million and entered into a joint-venture agreement to develop these assets.

Analysts at brokerage ATB Capital Markets called the Black Swan assets a “hand in glove” fit with its recent acquisitions.

Tourmaline stock rose 4.5% to C$32.1.

The deal value consists of 26 million Tourmaline shares and a net debt of up to $350 million, including deal costs.

Tourmaline will acquire an expected average production capacity of over 50,000 boepd when the deal closes, likely in the second half of July.

The company, which also raised its dividend by 1 Canadian cent per share, expects the Black Swan assets to generate free cash flow of $150 million to $200 million in 2022 and beyond.

The Canadian energy sector has seen a flurry of deals with companies expecting to benefit from the rebound in oil prices as global fuel demand picks up.

ARC Resources Ltd in April bought Seven Generations Energy Ltd for C$2.7 billion to create Montney’s largest oil and gas producer.

($1 = 1.2104 Canadian dollars)

 

(Reporting by Rithika Krishna in Bengaluru; Editing by Vinay Dwivedi)

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Exxon losing veteran oil traders recruited to beef up profit

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Exxon Mobil Corp has lost two top crude oil traders from its U.S. energy trading group, according to people familiar with the matter, in a continued exodus from the group.

Exxon last year reversed course on a major expansion of its oil and petroleum products trading as fuel demand tumbled during the pandemic. It suffered a $22.4 billion loss in 2020 from its oil production and refining businesses, leading to deep cost cuts across the business.

Veteran oil traders Michael Paradise and Adam Buller, both of whom joined the company in 2019 after lengthy careers elsewhere, resigned last week, the people said. Paul Butcher, an Exxon trader in Britain, plans to leave in September, another person familiar with the operation said.

Butcher was recruited by Exxon in 2018 to advise it on North Sea oil markets and on accounting for trading transactions. He earlier worked for BP Plc, Glencore Plc and Vitol SA.

Exxon declined to comment on the departures, citing personnel matters.

“We’re pleased with our progress over the past couple of years to grow our team and capabilities,” said spokesman Casey Norton. Exxon’s scale and reach “give our trading teams a broad footprint and unique knowledge and insights” that can generate value for shareholders.

Paradise was a highly regarded crude oil trader who joined Exxon from Noble Group and earlier was director of crude oil trading at Citigroup Inc and BNP Paribas. Buller joined Exxon in late 2019 after trading oil for Petrolama Energy Canada and Spain’s Repsol SA. He earlier was director of international oil trading at BG Group.

Exxon recruited a cadre of experienced traders hoping to replicate rivals BP and Royal Dutch Shell in trading. Both generated enormous trading profits last year by buying oil during the downturn. They sold it at higher prices for future delivery, posting multibillion-dollar profits for the year.

In contrast, Exxon began restricting the group’s access to capital as the pandemic accelerated, laid off some staff and offered early retirement packages to others, Reuters reported. Exxon does not separately report the performance of its trading unit.

(Reporting by Gary McWilliams in Houston, Devika Krishna Kumar in New York and Julia Payne in LondonEditing by David Evans and Matthew Lewis)

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G7 global tax plan may hit corporate titans unevenly

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An agreement by wealthy nations aimed at squeezing more tax out of large multinational companies could hit some firms hard while leaving others – including some of the most frequent targets of lawmakers’ ire – relatively unscathed, according to a Reuters analysis.

Finance ministers from the Group of Seven leading nations on Saturday agreed on proposals aimed at ensuring that companies pay tax in each country in which they operate rather than shifting profits to low-tax havens elsewhere.

One proposed measure would allow countries where customers are based to tax a greater share of a multinational company’s profits above a certain threshold. The ministers also agreed to a second proposal, which would levy a minimum tax rate of 15% of profits in each overseas country where companies operate, regardless of profit margin.

The Reuters review of corporate filings by Google-owner Alphabet Inc suggests the company could see its taxes increase by less than $600 million, or about 7% more than its $7.8 billion global tax bill in 2020, if both proposed measures were applied. Google is among the companies that some lawmakers have criticized as paying too little tax.

Meanwhile, medical group Johnson & Johnson, which is also U.S.-based, could see its tax bill jump by $1 billion, a more than 50% rise over its $1.78 billion global tax expense last year, according to Reuters’ calculations.

Both Google and J&J declined to comment on the calculations.

In a statement Saturday following the G7’s agreement, Google spokesman José Castañeda said: “We strongly support the work being done to update international tax rules. We hope countries continue to work together to ensure a balanced and durable agreement will be finalized soon.”

Determining the exact impact the new rules will have on companies is difficult, in part because companies don’t typically disclose their revenues and tax payments by country. And key details about how the rules would be implemented are still pending, tax specialists say, including to which countries profits would be reallocated and to what degree taxes generated by the new measures would offset taxes owed under the current system.

The proposed rules themselves also face hurdles. In the United States, several top Republican politicians have voiced opposition to the deal. Details of the agreement are also due to be discussed by the wider Group of 20 countries next month.

Four tax specialists concurred with Reuters’ methodology but noted that there is still uncertainty about how the measures would be applied, including which tax breaks are included in the 15% minimum overseas tax.

The G7 comprises Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.

“The deal makes sure that the system is fair, so that the right companies pay the right tax in the right places,” said a spokesperson for the UK Treasury, which hosted the G7 meeting. “The final design details and parameters of the rules still need to be worked through.”

SHARING PROFITS

The first proposed measure focuses on large global firms that report at least a 10% profit margin globally. Countries in which the companies operate would have the right to tax 20% of global profits above that threshold in an effort to stop companies reporting profits in tax havens where they do little business.

Applying that formula to Google could result in as much as $540 million in additional taxes, according to the Reuters analysis.

Based on Google’s 2020 global profits of $48 billion, Reuters calculated what portion of that income could be reallocated based on the G7’s proposed formula. Reuters then calculated how much more the company would pay if tax was levied on that portion of income at the rate of 23% – which is the average tax rate for developed nations as identified by Paris-based research body the Organization for Economic Cooperation and Development – rather than the average overseas tax rate of 14% that Google said it paid last year.

Applying the same methodology to J&J, and its 2020 global profits of $16.5 billion, the healthcare company would see its global tax bill rise by about $270 million as a result of the first measure.

The exact impact on each company’s tax bill would depend on how much income is actually reallocated. Also at issue is which country the profit is moved from and to – and therefore what the increase in tax rate is. If all the reallocated profit comes out of zero-tax jurisdictions, the impact could be greater.

MINIMUM TAX OVERSEAS

U.S. and UK officials say the other measure, involving a 15% global minimum tax, will have a bigger total impact on how much in taxes governments collect. But its effect on companies will vary widely. In recent years, Google-parent Alphabet, like some other targets of tax campaigners, has reorganized its international tax structures and last year reported over three-quarters of its global income in the United States compared to less than half in each of the previous three years, according to its corporate filings.

Google reported $10.5 billion of dollars of earnings from outside the United States last year and an average overseas tax rate of 14%, which is one percentage point below the G7’s proposed minimum tax.

If Google’s overseas earnings were all taxed at 15%, the additional tax due would be $100 million. The impact could be higher if a large proportion of the money is earned in zero-tax jurisdictions like Bermuda, where Google used to report over $10 billion a year in income. Conversely, the impact of the minimum tax would be reduced if the first measure prompted Google to reallocate some of its non-U.S. earnings out of tax havens.

Excluding the impact of the first proposed measure, increasing the tax rate on overseas income to 15% would mean $45 million of additional tax.

The situation for J&J would be very different. It earned 76% of its 2020 income outside of the United States and paid 7% tax on average on that overseas profit. Applying a 15% tax rate to that overseas income figure would result in $990 million in additional taxes, according to Reuters’ calculations.

While the reallocation of profit under the first measure would reduce this impact, the combined result of the two measures would be more than $1 billion.

Academics say businesses are adept at mitigating the impact of measures that are designed to reduce tax avoidance and therefore could re-organize in order to limit the impact of the proposed measures. And, in reality, tax incentives offered by governments mean companies may end up paying less in practice.

 

(Reporting by Tom Bergin; Editing by Cassell Bryan-Low)

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