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Floods, droughts, storms will cost Canadian economy $139B in next 30 years, report says – CBC News

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Floods, droughts and major storms that wash out highways, damage buildings and affect power grids could cost Canada’s economy $139 billion over the next 30 years, a new climate-based analysis predicts.

The report, titled Aquanomics, was published Monday by GHD, a global engineering and architecture services firm.

In an interview with CBC News, the firm’s Canadian water lead Don Holland said that the value of water and the costs associated with it are underacknowledged.

“I think we all know it’s important,” Holland said. “We need it to thrive and survive, but it could be also one of those things [that can] wipe communities out.”

He added that the impact on the Canadian economy is $139 billion spread out over five different market segments.

“I’ve heard this numerous times: We experience climate change through the lens of water,” Holland said. “Either we have too much water or not enough. But really, when we talk about climate change, we experience it through water.”

GHD’s Canadian water lead Don Holland said there are lots of reports that count up insured losses and physical damage after major events like last fall’s atmospheric river in British Columbia. Drought is often seen as only a real risk to agriculture, but extreme drought have more dire consequences. (Charlotte Wasylik)

He pointed to the 2021 B.C. floods, which for a time cut off rail and highway links between the country’s biggest port in Vancouver and the rest of Canada. The disruption stressed supply chains already hampered by COVID-19, raising prices, slowing production in factories that couldn’t get parts and leaving some grocery store shelves empty.

The report predicts manufacturing and distribution will take the biggest hit from water-related climate disasters between now and 2050 — an estimated $64 billion in losses, or about 0.2 per cent of the total manufacturing economy a year.

While droughts can restrict industrial production, floods and storms cause direct damage to buildings and machinery, or take out power supplies, forcing factories into silence.

The derecho wind storm that ripped across southern and eastern Ontario in May damaged the power grid in Ottawa so badly, parts of the city were without electricity for more than two weeks.

Roy Brouwer, the executive director of the Water Institute and a professor of economics at University of Waterloo, said that the report was a call to action. He added that he does not work with the economic model that GHD used in their methodology and was unfamiliar with it.

Much of the Canadian industry is dependent on water. Reduced availalability will have “significant impacts,” he said.

“It’s very important to understand that there are both direct and indirect economic impacts,” he said. “It’s often these indirect impacts that we lose track of.”

Retail, banking, energy, agriculture among most affected sectors

Drought is often seen as only a real risk to agriculture, but extreme drought can be much wider-reaching. In Europe, near-record lows on the Rhine River might halt marine traffic along Europe’s most important shipping lane, which links major ports in Belgium and the Netherlands to Germany and Switzerland.

Last week in China, a massive heat wave prompted the government to force some factories to close to ration power as low river levels cut power output at hydroelectric dams.

Governments in California, Nevada, Utah and other parts of the western United States are enforcing water rationing in the midst of what some call the worst drought in more than a millennium.

Lake Mead, the biggest reservoir in the United States, is down to one-quarter of its capacity, with macabre results: at least five bodies have been located as the water receded, some of them believed to have drowned or been killed and left in the lake decades ago.

Retail and fast-moving consumer goods — heavily reliant on water-related infrastructure, and extremely exposed in the event of damage to supply routes — will be the second-most affected economic sector, with losses estimated to be around $26 billion between 2022 and 2050.

Water risk in the banking and insurance sector follow with $21 billion in estimated losses, primarily because of disruptions to productivity and economic activity, as well as bigger insurance payouts.

Energy and utilities will face an estimated $14 billion in losses, either through direct damage to power grids and production plants, or reductions in power output at hydro dams and nuclear plants because of low water levels.

Agriculture is the fifth sector analyzed, which in Canada is estimated to lose about $4 billion over the next 28 years, also threatening food security.

“The most important message coming out of the of the study is that it’s important to realize that that the economy is a system in itself, and so you can you can have an impact on a particular sector, but these sectors work together,” said Brouwer.

“They together create a system and economic system … what happens in one sector doesn’t usually stay in one sector.”

Effects of water disasters on global economies

The report also looked at the economic effects of water disasters in seven other countries, including Australia, China and the United States.

GHD says costly and massive infrastructure projects to protect against storms and floods are no longer the answer to make the economy more resilient, because time is of the essence.

A road is surrounded by floodwaters in the Sumas Prairie flood zone in Abbotsford, British Columbia on Nov. 22, 2021. (Ben Nelms/CBC)

Smaller projects that can be done quickly, often utilizing nature itself, are likely the best choice, the report says.

Brouwer said that the report doesn’t appear to account for adaptative and mitigative measures that are already in effect around the world.

The average temperature on Earth is already more than 1 C above pre-industrial times and the climate has already changed, leading to more frequent and more severe storms and floods and wider and longer droughts.

The cost of those events is high.

The Emergency Event Database compiled by the Belgium-based Center for Research on the Epidemiology of Disasters said economic losses in 2021 from drought, floods and storms worldwide totalled $291 billion, compared with an average of $153 billion between 2001 and 2020.

GHD’s report says taking advantage of data systems and sensors to help predict problems before they arise can make a big difference.

For example, Holland said using sensors to look for signs of an impending water main break in a city can prevent massive losses of water, reduce damage and ensure the pipes reach their maximum lifespan.

Holland said for him, the report’s biggest message is “the magnitude of what we’re facing if we don’t get more resilient, if we don’t make our communities more resilient.”

“It’s really driving home how water … touches every aspect of our lives and communities. It truly does, in ways that we don’t know about.”

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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)

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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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