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CN shuts Eastern network; Via halts passenger service amid protests – BNNBloomberg.ca

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Blockades set up by anti-pipeline protesters have forced Canadian National Railway Co. to shut down its entire network in Eastern Canada and Via Rail to cancel passenger service across the country.

CN said Thursday that the company must initiate a “disciplined and progressive” shutdown in the East and stop and safely secure all transcontinental trains across its Canadian network.

Via Rail said it has no other option but to cancel all service on CN track in Canada. There were no more departures as of 4 p.m. eastern and all trains en route were brought to the closest major train station.

“We understand the impact this unfortunate situation has on our passengers and regret the significant inconvenience this is causing to their travel plans,” Via said in a news release.

Protesters across Canada say they’re acting in solidarity with those opposed to the construction of the Coastal GasLink pipeline, which would cross the traditional territories of the Wet’suwet’en First Nation in northern B.C.

CN said its shutdown may lead to temporary layoffs for eastern Canadian staff.

It has sought and obtained court orders and requested the assistance of enforcement agencies for blockades in three provinces, but while blockades have been dismantled in Manitoba and may be ending imminently in B.C., a court order in Ontario has yet to be enforced.

Here’s what Canada’s top executives have said about the rail blockades

“Ridiculous behaviour.” “What’s going on?” “This is a good case of insanity.” That’s a sample of what some of Canada’s top corporate executives have said on BNN Bloomberg this week amid disbelief that blockades snarling rail traffic have been allowed to drag on.

More than 400 trains have been cancelled over the last week, said JJ Ruest, CN’s president and chief executive officer, in a news release.

“This situation is regrettable for its impact on the economy and on our railroaders as these protests are unrelated to CN’s activities, and beyond our control. Our shutdown will be progressive and methodical to ensure that we are well set up for recovery, which will come when the illegal blockades end completely.”

He said while Via service will be discontinued across CN’s network, commuter rail services such as Metrolinx and Exo can keep operating as long as they do so safely.

Prime Minister Justin Trudeau told reporters after landing in Munich, Germany, that his government is monitoring the situation very closely and he had a long and productive conversation with B.C. Premier John Horgan on the plane.

“We’re concerned with the rule of law and we need to make sure that those laws are followed,” Trudeau said.

The B.C. and federal governments have agreed to meet with Gitxsan and Wet’suwet’en hereditary chiefs to discuss a blockade near New Hazelton, B.C.

Gitxsan hereditary chief Norm Stephens said the blockade will be dismantled during the talks but if the province doesn’t agree to cancel Coastal GasLink’s permit then it may go back up.

Transport Minister Marc Garneau said he is deeply concerned by the impact of the decision CN was forced to make and its effect on Via Rail.

“A safe and efficient passenger and freight rail service is critical to the well-being of our country,” Garneau said on Twitter.

Garneau said he would be meeting with his provincial counterparts and Indigenous groups on Friday to discuss a way forward.

He said all parties must engage in open and respectful dialogue to ensure this situation is resolved peacefully.

“We are encouraged by the progress on the blockade in New Hazelton. This is a positive development and we are actively working for a similar resolution on all remaining blockades.”

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Coastal GasLink has signed agreements with all 20 elected band councils along the pipeline route but the Wet’suwet’en hereditary chiefs say councils only have authority over reserve lands, not traditional territories that have never been ceded through a treaty.

“They got that permit by consulting with the band council,” said Stephens. “They have no authority on the hereditary chiefs’ land.”

Indigenous Services Minister Marc Miller is also setting up a meeting with Indigenous leaders in an effort to halt a blockade near Belleville, Ont., which he called a “highly volatile situation.”

Tyendinaga Mohawk Chief Donald Maracle said he expects the meeting will proceed but he can’t comment on Miller’s request to end the blockade because it wasn’t initiated by his council.

Railway shippers called on the prime minister to “act decisively” to prevent a complete shutdown of Canada’s rail system.

Delays caused by the blockades will have immediate consequences for farmers across the country, said Grain Growers of Canada chairman Jeff Nielsen.

“We are an industry that relies on export markets in order to survive and thrive. Without access to these markets via rail, we risk compounding further losses on top of what has already been a harvest from hell,” he said in a news release.

Canada’s forest products sector is responsible for 10 per cent of total tonnage moved along the country’s railway lines.

“Some companies are now in a position that they can’t guarantee delivery dates to customers – a massive business risk and a dark cloud over Canada’s reputation as a reliable trading partner,” said Derek Nighbor, president and CEO of Forest Products Association of Canada.

Teamsters Canada, the country’s largest union in the transportation sector, also called on the federal government to intervene.

“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,” said National President Francois Laporte.

Passengers dealing with cancelled Via Rail trains at Toronto’s Union Station were disappointed but calm on Thursday evening. Ethan Sun and Angi Xhang, a Toronto-based couple, were headed to Montreal for a Valentine’s Day getaway. That route has been down for days, unbeknownst to them.

“We’re obviously very frustrated and disappointed, because we have our entire trip planned and we’re very excited for it, and it’s a long weekend,” said Xhang.

Jane Gooder was trying to get home to London, Ont., after working in Toronto through the week.

She said she’s found someone to come pick her up, but she was “gobsmacked” when she first heard all trains were cancelled.

“I just thought, ‘Where do I start? Do I stay over?’ And then they said, ‘Even if you stay over the next day there’s no guarantee, this could go on to next week,’ ” she said.

In Manitoba, protesters dismantled a blockade on an east-west CN Rail line near Winnipeg due to a court injunction but insisted that there would be more action to come.

Protesters in B.C. planned mass demonstrations at numerous government buildings on Friday, days after hundreds blocked the entrances to the legislature and chanted “Shame.”

However, a B.C. Supreme Court judge granted the province an injunction on Thursday afternoon authorizing police to arrest and remove anyone blocking entrances at the legislature.

TransLink, Metro Vancouver’s transit authority, also said all West Coast Express commuter trains heading eastbound from downtown Vancouver to Mission were cancelled due to protesters blocking Canadian Pacific tracks.

– With files from Chris Purdy in Edmonton, Mia Rabson in Munich, Germany, Nicole Thompson and Ross Marowits in Toronto, David Reevely in Ottawa, Camille Bains in Vancouver and Dirk Meissner in Victoria.

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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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