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Finance Minister Toews suggests 2020-21 budget year wasn't as bad as it seemed. It was – CBC.ca

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This column is an opinion from Graham Thomson, an award-winning journalist who has covered Alberta politics for more than 30 years.


Alberta might be sweltering through a brutally hot and blindingly sunny week but there’s a cloud hanging over the provincial government that keeps raining on Premier Jason Kenney’s parade.

We got a good look at the ominous spectre Wednesday morning when Finance Minister Travis Toews released the province’s final fiscal report on the 2020-21 budget.

This was the overly optimistic budget the government unveiled at the end of February last year that predicted solid economic growth, higher employment and a balanced budget by 2023. It was unrealistic even by pre-pandemic standards. 

This was the budget that forecast a $7-billion deficit and $88-billion accumulated debt – but also predicted rosy economic growth in 2020 that would help the government to wipe out the annual deficit in a few years and start to pay down the debt.

Well, according to the final accounting, that deficit turned out to be almost $17 billion and the debt hit $93 billion. Plans to balance the budget were tossed out the window.

The 2020-21 fiscal year will go down as the worst in Alberta history, so far.

Of course, the pandemic was responsible for shredding the Alberta economy, at one point helping drive oil prices into negative territory and forcing the government to spend $5-billion on various pandemic safety nets for individuals and businesses.

However, the government added to the fiscal wreckage by reducing revenue thanks to fast tracking a multi-billion corporate tax cut and increasing spending by losing $1.3 billion on the Keystone XL pipeline gamble.

The government would dearly love to put 2020 behind it or at least manipulate the miserable numbers to its advantage.

And that process started Wednesday with a fiscal sleight of hand by Toews.

Instead of comparing the final 2020-21 budget numbers to last year’s original budget numbers — as is the normal measurement — Toews is comparing the final numbers to those in a third-quarter budget update last November.

Those November numbers projected a $20-billion deficit and almost $100 billion in debt.

But by slyly using those dismal figures as his baseline, Toews can say the budget actually ended up better than expected.

Here’s how it works.

The original budget deficit of $7-billion, for example, ended up being $17 billion, an increase of $10 billion.

However, by using that $20-billion deficit number forecast in November’s update as his baseline, Toews can say the final $17-billion deficit number is actually good news because it’s a $3-billion drop.

That allowed the government to issue a news release Wednesday touting a “smaller deficit” than forecast.

The numbers are undergoing such deep manipulation under Toews, the final 2020-21 budget document should have been issued with massage oil.

Predictably, Toews also tried to blur the past by focusing on a more rosy future bolstered by a steep rise in oil prices and by strong economic growth anticipated to lead the country.

“Last year was very difficult for many Albertans, but the province is emerging stronger than expected,” said Toews.

But it’s all relative.

This year’s budget numbers are as troubling in some ways as last year’s. The 2021-22 budget forecast a $20-billion deficit and $110-billion debt. Those numbers will likely drop thanks to a recovering economy but they have created a nightmare for Kenney and the UCP government that promised Albertans a balanced budget in their first term.

Another awkward bit of fiscal reality for Kenney is just how much the federal Liberal government did to help Alberta deal with the pandemic.

Not only did Ottawa deliver $10.5 billion in direct transfers to the Alberta treasury last year, it sent an estimated $23 billion to individual Albertans and businesses via programs such as the Canada Emergency Response Benefit and the Canada Emergency Wage Subsidy.

That might be good news for Alberta but it’s not good political news for the Alberta government that is cranking up the anti-Ottawa rhetoric in advance of the provincial referendum this fall against the federal equalization program.

Kenney wants to get Albertans riled up at the federal government instead of being chronically riled up at him.

And perhaps he can deflect attention away from the fact that even with higher oil prices, Alberta’s fiscal picture is so dismal that Albertans are still facing the “fiscal reckoning” that Kenney kept warning them about last year.

The reckoning has apparently been postponed for now. Toews sidestepped questions about it during a news conference on Wednesday.

It’s not something he wants to discuss now, not while he’s trying to paint an optimistic picture of Alberta’s future that isn’t all in red ink.

Interestingly, he did suggest once again the government will be looking at its revenue options in the next few years. Translation: higher taxes.

Not that Toews would dare be that blunt but introducing tax hikes, even going as far as implementing a provincial sales tax, is something the government will have to consider if it truly wants a sustainable budget.

Toews wants to convince Albertans that better days are ahead — and no doubt they are if the pandemic is truly beaten – but the province’s precarious fiscal situation is a cloud that hovers over Alberta today with a “fiscal reckoning” storm cloud awaiting just over the horizon.

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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.

Companies in this story: (TSX:TRP)

The Canadian Press. All rights reserved.

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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.

Companies in this story: (TSX:BCE)

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