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Cash-strapped rural Alberta 'can't wring money' from struggling oil and gas firms, premier says – CBC.ca

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Premier Jason Kenney urged rural municipalities to work with the province to help struggling oil and gas companies Tuesday, adding they can’t get “money from a stone.”

He made the comments following a survey that said the oil and gas sector owes $173 million in unpaid taxes to rural municipalities — more than double since a similar report was done last spring.

Speaking to reporters Tuesday, Kenney said the sector has seen a few bankruptcies in the past year while other companies are barely hanging on.

“You can’t wring money from a stone,” Kenney said, suggesting that could be the case for a number of smaller natural producers who are having trouble right now.

“The best solution, in our view, is to create a future for those companies that are struggling.

Rural Municipalities Alberta (RMA) distributed a survey of its members Monday that showed the amount of unpaid taxes from oil and gas companies had grown by 114 per cent since a similar survey last March.

Years of low oil prices have left many small producers in dire straits but rural communities say those unpaid taxes are leaving significant holes in their budgets.

A decommissioned pumpjack is shown at a well head on an oil and gas installation near Cremona, Alta, in 2018. Rural Municipalities Alberta (RMA) distributed a survey of its members Monday that showed the amount of unpaid taxes from oil and gas companies had grown by 114 per cent since a similar survey last March. (Jeff McIntosh/Canadian Press)

The RMA said legislative gaps make it difficult to recover lost taxes from energy companies. When an oil and gas company goes bust, municipalities rank below regulators as creditors, the association said.

Al Kemmere, president of the RMA, told CBC News Tuesday he will meet with the provincial minister of municipal affairs next month to discuss the situation.

Asked about the premier’s comments, Kemmere agreed there needs to be discussion about solutions, but cautioned rural municipalities only have so much flexibility under the Municipal Government Act.

“We are also in a very limited scope of what we can do, too, because [while] other levels of government can … build a deficit into their budget, we cannot,” Kemmere said.

“That limits us again on what we can do and how we can find solutions. We either balance a budget every year or we are in contempt of our own act.”

Kenney said rural municipalities have the legal ability to take action when taxes go unpaid.

But Kemmere maintained they don’t have that authority other than through the civil courts — something he said could be “really messy” and puts risk on taxpayers.

On Tuesday, Kenney was asked how the province would find a balance between the rural municipalities and the industry. He said he didn’t view them as competing priorities but competing realities. 

“On the one part, the municipalities need the revenue and they have every right to assess it and and to seek to collect it — they have the legal right to collect it,” Kenney said. 

“But for companies that are on the verge of bankruptcy, they have no cash and very little in the way of assets. There’s not a lot to go after.

“So I would just say with the municipalities, you know, work with us to try to create the best conditions to turn that economic situation around.

The industry is seeking reforms to how taxes are assessed on oil and gas companies.

Properties are assessed by the provincial government, which evaluates them on replacement cost and not on market value, Ben Brunnen, vice president of the Canadian Association of Petroleum Producers, said Monday.

What we’re seeing is a need to update the way our assets are valued inside municipalities,” he told CBC News.

“If we do that, we’ll find a way for companies to then … perhaps invest more because the economics are better over the long term and our industry will come out stronger.”

On Monday, Ponoka County Reeve Paul McLauchlin said about 40 per cent of unpaid taxes are from severely distressed companies in an industry hard and widely hit by lower resource prices. The rest of the shortfall is from companies that continue to operate but don’t pay.

“My personal opinion is that this is a tax revolt,” McLauchlin told Canadian Press. “They are using this as a lever to decrease their assessment and change those costs.”

A group concerned about the unpaid taxes, the Alberta Liabilities Disclosure Project, is planning a protest outside the McDougall Centre in downtown Calgary on Wednesday.

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

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