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CN rail closures from Wet’suwet’en protests affecting industry, farmers say – Calgary Herald

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A man walks dogs across train tracks as First Nations members of the Tyendinaga Mohawk Territory block the route servicing Via Rail, as part of a protest against British Columbia’s Coastal GasLink pipeline, in Tyendinaga, Ontario, Canada February 13, 2020. REUTERS/Chris Helgren ORG XMIT: GGGTYE104


CHRIS HELGREN / REUTERS

Farmers who rely on rail for shipping their harvest say blockades that have forced the stoppage of all Canadian National Railway Co. transcontinental trains could have a significant economic effect on Alberta’s agricultural industry.

“We’re seeing immediate effects already from the closures,” said Todd Hames, a grain farmer near Marwayne, about 250 kilometres east of Edmonton, who is also the chair of the Alberta Wheat Commission.

“There’s been a significant stoppage of grain movement already and if this were to continue for very many days, it will be lost capacity that’s really hard to regain. It’s like a lost day of work for the industry.”

Blockades set up by demonstrators have halted the movement of more than 300 freight trains since Feb. 6. The protesters are forming the blockades in solidarity with northwestern British Columbia’s Wet’suwet’en First Nation, whose hereditary chiefs oppose the Coastal GasLink project that crosses through their traditional territory.

The barricades, set up in Ontario and British Columbia, led CN Rail to start a “progressive and orderly shutdown of its Eastern Canadian network,” according to a statement posted to the railway operator’s website Thursday.


A “Stop Colonization” sign is taped to a camper as First Nations members of the Tyendinaga Mohawk Territory block train tracks servicing Via Rail, as part of a protest against British Columbia’s Coastal GasLink pipeline, in Tyendinaga, Ontario, Canada February 13, 2020.

CHRIS HELGREN /

REUTERS

For farmers, the news compounds a difficult few months that saw an eight-day CN Rail strike in November, an extended January cold spell and recent heavy rain that delayed rail movement and the loading of grain vessels in Vancouver. In all, it’s led to a backlog that has dozens of ships waiting to be loaded in Vancouver, with another eight sitting idle in Prince Rupert.

“That early strike was certainly a factor, and they’ve had to catch up on supply. It seemed like they were catching up on it, but cold weather has had an effect, especially with the amount of snow on the mountains,” said Lynn Jacobson, president of the Alberta Federation of Agriculture. “Saying (the backlog) is all on the protesters isn’t telling the whole story, but it will have an effect on us.”

If the interruptions continue for an extended period of time, the economic effect could be dramatic, Hames said, arguing that those effects could be felt internationally if Canada fails to ship its product to other markets.

“It causes a loss of confidence in Canada and our competitive environment in Canada because we’re exporting a lot of grain around the world,” he said. “Our customers really like the quality of our product but they need to be assured that they’ll get it when they ask for it.

“Any sort of blip in the system causes our international customers to be concerned about purchasing Canadian grain.”

The concerns extend beyond Alberta’s agricultural industry and to manufacturers across the province, says Canadian Manufacturers and Exporters president and CEO Dennis Darby.

“It has an effect everywhere, and Alberta will be affected as well, because manufacturers in Eastern Canada are often building equipment and parts they need out West,” Darby said. “I think it’s an economic imperative that we get this resolved. We sometimes take for granted that our integrated supply chain in Canada, and also north-to-south, relies on rail.”


First Nations members of the Tyendinaga Mohawk Territory block train tracks servicing Via Rail, as part of a protest against British Columbia’s Coastal GasLink pipeline, in Tyendinaga, Ontario, Canada February 13, 2020.

CHRIS HELGREN /

REUTERS

In addition to the CN Rail closures, Via Rail is putting a temporary halt on its passenger services nationwide. The passenger train service runs mostly on CN Rail track.

The railway operator also said the shutdowns could lead to temporary layoffs, with Teamsters Canada, the union representing CN Rail workers, saying 6,000 employees at CN and other rail companies could be left without a job.

“These blockades are having a catastrophic impact on ordinary, working-class Canadians who have nothing to do with the Coastal GasLink pipeline,”  Teamsters Canada president François Laporte said Thursday.

“Hundreds of our members have been out of work close to week. Now up to 6,000 of our members risk not being able to support their families or make ends meet this month, and they are powerless to do anything about it.”

A blockade in Manitoba was taken down Thursday, but ones in Belleville, Ont., and New Hazelton, B.C., remain.

Federal Indigenous Services Minister Marc Miller offered Thursday to meet with three Indigenous leaders in Ontario as the federal government seeks a solution to the rail blockades.

Tyendinaga Mohawk Chief Donald Maracle says he expects the meeting will take place but he can’t comment on the blockade because it wasn’t initiated by council.

A meeting is also expected to take place between the B.C. government and Gitxsan and Wet’suwet’en hereditary chiefs.

Data from the Angus Reid Institute shows that roughly two in five Canadians support Wet’suwet’en solidarity protesters, while 51 per cent support the $6.6-billion Coastal GasLink pipeline.

However, despite the protests, few Canadians expect the project to be stopped, with 57 per cent believing the pipeline will be built with some delays and another 34 per cent saying they’re confident construction will push forward as planned despite the demonstrations.

— With files from The Canadian Press

jherring@postmedia.com

Twitter: @jasonfherring

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Oil prices fall as market weighs coronavirus demand impact – CNBC

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Oil pumpjacks in silhouette at sunset.

Oil prices fell on Tuesday, tracking losses in financial markets on lingering concerns over the economic impact of the coronavirus outbreak in China and its effect on oil demand.

Brent crude was at $57.07 a barrel, down 60 cents, or 1%, by 0348 GMT, while U.S. West Texas Intermediate crude fell 38 cents, or 0.7%, to $51.67 a barrel.

“Oil prices remain heavy as energy traders may have been overly optimistic as to the crude demand impact of the coronavirus, and in fading optimism that OPEC + will come through with deeper production cuts in March,” said Edward Moya, senior market analyst at OANDA.

“Optimism that China would see a return to normalcy in travel and trade next quarter was probably wrong… The rest of world is exercising caution on virus spreading fears and that will do no favors for crude’s demand outlook.”

U.S. stock futures slipped from record levels on Tuesday after Apple Inc, the most valuable company in the United States, said it will not meet its revenue guidance for the March quarter as the coronavirus outbreak slowed production and weakened demand in China. 

The number of new coronavirus infections in mainland China fell below 2,000 on Tuesday for the first time since January, Chinese health officials said, although global experts warn it is too early to say the outbreak is being contained. 

The International Energy Agency (IEA) said last week the virus was set to cause oil demand to fall by 435,000 barrels per day (bpd) year-on-year in the first quarter, in what would be the first quarterly drop since the financial crisis in 2009.

Still, with some Chinese independent refineries snapping up crude supplies after being absent from the market for weeks, traders held out hopes that China’s demand could recover in coming months. 

Investors are also anticipating that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, will approve a proposal to deepen production cuts to tighten global supplies and support prices.

The group, known as OPEC+, has an agreement to cut oil output by 1.7 million bpd until the end of March.

Oil output from Libya has fallen sharply since Jan. 18 because of a blockade of ports and oil fields by groups loyal to eastern-based commander Khalifa Haftar.

Libya’s national oil corporation, NOC, said on Monday that oil production was at 135,745 barrels per day as of Monday, compared with 1.2 million bpd before the stoppage.

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Pier 1 Imports closing all Canadian stores as it files for bankruptcy protection – Global News

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Home goods retailer Pier 1 Imports Inc. says it has filed for bankruptcy protection in the United States and plans to close all Canadian stores as part of its restructuring process.

The Texas-based company has been struggling with increased competition from budget-friendly online retailers such as Wayfair.

Pier 1 says it will pursue a sale, with a March 23 deadline to submit bids.

The company last month announced it would close 450 stores, including all its Canadian locations.

A Pier 1 Imports furniture and home furnishings store in Laval, Que. on Feb. 22, 2018.

A Pier 1 Imports furniture and home furnishings store in Laval, Que. on Feb. 22, 2018.


Mario Beauregard / The Canadian Press

Pier 1’s Canadian website now directs customers to a short statement announcing the closures and thanks them for their loyalty.

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The company is also commencing creditor protection proceedings in Canada.

Osler, Hoskin & Harcourt LLP are serving as Canadian legal advisers.

In a statement Monday, the company said it will continue to shutter stores as part of its bankruptcy proceedings. The company, which was founded in 1962, is also closing two distribution centres.


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A hearing is scheduled for Tuesday at the U.S. Bankruptcy Court for the Eastern District of Virginia. In the meantime, Pier 1 said lenders have committed approximately $256 million in debtor-in-possession financing so it can continue its operations during the Chapter 11 proceedings.

“Today’s actions are intended to provide Pier 1 with additional time and financial flexibility as we now work to unlock additional value for our stakeholders through a sale of the company,” Pier 1 CEO and Chief Financial Officer Robert Riesbeck said in a statement. Riesbeck, an executive with previous corporate turnarounds, joined Pier 1 last summer.

Pier 1’s sales fell 13 per cent to $358 million in its most recent quarter, which ended Nov. 30. It reported a net loss of $59 million for the quarter as it struggled to draw customers to its stores. Pier 1 has been trying to declutter its stores, improve online sales and draw in younger customers.

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Pier 1’s shares have fallen 45 per cent since the start of the year. They closed at $3.58 per share on Friday.

— With files from The Associated Press. 

© 2020 The Canadian Press

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Bombardier to sell train unit to France’s Alstom, shedding biggest division – Toronto Star

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MONTREAL— Bombardier, the supplier of Toronto’s signature streetcars and subways, has reached a US$8.2-billion deal to sell its rail business to French train giant Alstom SA. Both the TTC and Metrolinx say the sale won’t immediately impact their operations.

The company is narrowing its focus to commit itself solely to business jets while casting off its largest division, in part to help pay down US$9.3 billion in debt.

“Going forward, we will focus all our capital, energy and resources on accelerating growth and driving margin expansion in our market-leading US$7 billion business aircraft franchise,” CEO Alain Bellemare said in a statement Monday.

The news comes only weeks after the TTC took delivery of the last of 204 new Bombardier streetcars. All the maintenance of those vehicles is done in-house at the TTC, said transit spokesperson Stuart Green.

The $1.25 billion streetcar order was believed to be the biggest in the world when it was announced in 2009. But the 11 intervening years were an especially problematic chapter in the city’s long transit history with Bombardier.

The first two cars arrived in Toronto in 2014. But a series of manufacturing defects and missed delivery targets caused tempers to flare at the TTC and city hall. At one point the first 67 streetcars had to be recalled and repaired. Meantime, the TTC was desperately trying to extend the life of its old CLRV streetcars and run buses to supplement service on routes that desperately needed the new, bigger vehicles.

Toronto’s newest subways, the $1 billion Toronto Rockets, were also made by Bombardier. Ordered in 2006, they proved controversial for former Toronto Mayor David Miller, who defended the sole-source contract because it supported jobs at Bombardier’s Thunder Bay plant. The subways arrived late due to the bankruptcy of Bombardier’s New York door manufacturer but entered service in 2011.

Metrolinx said that “initial indications from Bombardier suggest it is business as usual,” with its order for Bombardier light rail vehicles for the Eglinton Crosstown, GO buses and the operation of GO and Union-Pearson Express trains. Most of GO’s locomotives are built by U.S.-based MotivePower.

The Finch West and Hurontario light rail lines are being furnished by Alstom, said spokesperson Anne Marie Aikins.

“We look forward to continuing with all of our rail delivery partners to bring better transit to the region,” she said.

Toronto transit historian Ed Levy said the sale of Bombardier’s train division is the end of an era that was for decades a happy match between the city and the company.

“They really screwed up on the streetcar thing but not on the very large orders of the subway cars over the years. When they started doing off-shore stuff that’s where their problems began,” he said.

The acquisition also signals an effort by Alstom to scale up amid rising competition from China’s state-owned CRRC, the world’s largest train maker.

The transaction will see the Caisse de depot et placement, which owns a 32.5 per cent stake in Bombardier’s train division, become Alstom’s largest shareholder.

The deal converts the Quebec pension giant’s investment in Bombardier Transportation into Alstom shares, handing the Caisse about 18 per cent of the Paris-based company with an investment of up to $4 billion, depending on closing conditions. The transaction includes an additional Caisse investment of $1 billion.

Bombardier said net proceeds from the deal will be between US$4.2 billion and US$4.5 billion after deducting the Caisse’s equity position of roughly US$2.2 billion, as well as adjustments for debts and other liabilities.

The deal is expected to close in the first half of 2021 if it can move through regulatory hurdles.

Alstom’s purchase is expected to come under intense scrutiny from antitrust regulators in the European Union. Last year, EU authorities blocked a proposed merger between Alstom and the train division of German industrial conglomerate Siemens AG, arguing the proposed tie-up would result in higher price tags on signalling systems and bullet trains.

Montreal-based Bombardier has sold several divisions since Bellemare took the helm in 2015, including its turboprop and aerostructure segments as well as its commercial airline unit, once touted as the company’s crown jewel.

Bombardier announced last month it was working to reduce debt and pursuing strategic options, which analysts and other observers suggested could include the sale of the company’s rail or business jet units.

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Bombardier shares have fallen about 70 per cent since July 2018 while Alstom’s have risen by more than 50 per cent over the past two years, including 3.5 per cent Monday.

The announcement was made after the Paris Stock Exchange closed Monday. The Toronto Stock Exchange was closed for Family Day.

The new deal and other recent transactions will leave Bombardier with between US$6.5 and US$7 billion of cash on hand, “putting the company on a brand-new footing” to deal with its sizable debt, Bellemare said.

The company has already ramped up production of high-margin business jets, which it expects will drive double-digit revenue growth with 160 unit sales in 2020 amid a $16.3-billion backlog. But delays and “some volatility” continue to plague several “large, challenging” rail contracts, Bellemare said last Thursday.

While its business jets are now at full production, analysts highlight the cyclical luxury market of private planes in comparison to the relatively stable field of rail car and network construction, which is fuelled by government infrastructure projects.

Nonetheless, hefty production costs and lower margins remain an issue in the rail business, said Jacques Roy, professor of transport management at HEC Montreal business school.

“You can see the fixed costs increasing all the time, because they pretty much have to establish facilities everywhere they sell equipment,” Roy said, pointing to Bombardier’s plant in Plattsburgh, N.Y., which makes trains for U.S. clients.

“If they were a little bit better at this they would be able to compete with the Chinese. They could brag that, ‘Okay, we’re not as cheap as the Chinese, but we produce much better quality, we deliver on time.’ But they don’t. That’s a concern to me,” he said.

The rail and business jet divisions represent Bombardier’s only remaining revenue streams — about 53 per cent and 47 per cent, respectively, of $15.76 billion in revenue last year — after Bombardier sold its waterbomber unit, Q400 turboprop business, CRJ regional jet program and flight-training enterprise over the past four years.

And last week, Bombardier announced the sale of its remaining stake in the A220 commercial jetliner program — formerly known as the C Series — as it reported quarterly results last Thursday, marking the end of its failed bid to take on the commercial aircraft duopoly of Airbus SE and Boeing Co.

Bombardier, founded in Valcourt, Que., in 1942 as a snowmobile manufacturer, now stares down a US$9.32-billion debt load — nearly 60 per cent of it due within five years.

The rail business, Bombardier Transportation, is based in Berlin. In Canada, it employs some 1,000 workers at factories in Quebec’s Bas-St-Laurent region and in St-Bruno-de-Montarville, on Montreal’s South Shore.

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