Days after dozens of cases of COVID-19 were confirmed at a meat plant in southern Alberta, provincial health and safety investigators conducted an inspection by video call and concluded the plant was safe to remain open.
Now, just under one week after that call, one person is dead and 515 people sick with COVID-19 due to the outbreak at the Cargill facility near High River, and the union representing the plant’s workers says it’s time for an independent investigation.
The facility announced Monday it will temporarily shut down as soon as it has finished processing the meat already in the plant.
“It’s very, very hard to specifically ascertain what’s going on. They aren’t allowing any visitors to the plant,” said Thomas Hesse, president of UFCW Local 401.
Prior to the temporary closure announcement, employees at the facility had accused the company of ignoring physical distancing protocols and trying to lure them back to work from self-isolation.
Hesse said that shutdown came way too late.
WATCH | COVID-19 outbreak forces Alberta meat processing plant to close:
“They knew there was a problem. Why did they wait until somebody died?”
The first 38 cases of COVID-19 at the plant were brought to the attention of media by the union on April 13. Two days later, a Cargill employee recorded a video inspection of the plant to send to a provincial Occupational Health and Safety (OHS) inspector, accompanied by a union shop steward and a worker.
OHS has a mandate to ensure Alberta workplaces are operating in a way that is healthy and safe for employees.
OHS deemed the plant safe.
“When an OHS officer won’t attend the plant and instead does a plant tour by cell phone, that should tell you that there’s something wrong,” Hesse said.
OHS is currently working through the formal process to determine whether to open a fatality investigation, Adrienne South, a spokesperson for the provincial labour minister, said in an email.
“After the first COVID-19 case was identified at Harmony Beef, an intergovernmental business resumption protocol was immediately established for provincially and federally licensed food processing facilities in Alberta,” South said.
“While many food processing facilities have existing pandemic and emergency response plans in place, it was critical to work with all actors involved to bolster their plans and help keep workers safe and guarantee Alberta’s food security.”
South said the live video call wasn’t unique to the Cargill facility, and was done to mitigate risk of exposure to all parties involved due to the pandemic.
The inspection was interactive, with an OHS officer directing the camera if needed to observe employees at their daily duties and video was recorded to be reviewed later, she said. Direction for mitigation measures at the facility have also been provided by the Canadian Food Inspection Agency, Alberta Health Services and Alberta Agriculture, the spokesperson said.
200 AHS staff responding to Cargill outbreak
Dr. Deena Hinshaw, Alberta’s chief medical officer of health, said Tuesday that due to the number of people that go in and out of the plant, it’s possible that the virus was spread before mitigation efforts were put in place.
AHS now has a dedicated task force of more than 200 staff responding to the outbreak, and translation services are being used to communicate with workers and their families who speak English as a second language.
Contact tracing is also underway to determine people who may have come in contact with someone who has tested positive, AHS said.
Gil McGowan, the president of the Alberta Federation of Labour, has written a letter to the province’s labour minister requesting both an OHS investigation into the worker’s death and a criminal investigation.
“Given that the workers at the plant and their union begged both you and their employer to suspend operations at the plant more than two weeks ago, it is our contention that managers failed in their duty to ‘prevent bodily harm’ to the
worker who died and to the hundreds of [her] coworkers who have become infected,” McGowan wrote.
Opposition Leader Rachel Notley described the single video inspection as a negligent approach to health and safety.
“How can you judge proper working conditions and safety protocols without having stepped on to the worksite? But somehow the minister assured workers and Albertans that he could,” Notley said, referring to a tweet from the agriculture minister on Saturday reassuring Albertans that the plant was safe.
Marichu Antonio is with Action Dignity, a community group working to support Cargill’s 2,000 employees, who come from a variety of ethnic backgrounds.
Antonio said the worker who died was a Vietnamese woman in her 60s, and her husband is now being treated in hospital.
“The fear of losing their jobs is very real to them. Plus the fear of what’s going to happen to their family members,” Antonio said.
Five employees at Seasons Retirement Communities in High River have also now tested positive for COVID-19, three of whom are married to meat-packing workers at Cargill.
Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, said perhaps other meat-packing facilities can learn a lesson from what happened in High River.
“I do believe the plant should’ve idled much sooner, but again I don’t have all the details in place,” he said.
“I mean [more than] 15 per cent of all cases in Alberta are linked to that plant. That is a lot.”
As of Tuesday, JBS meat-packing facility in Brooks had 67 confirmed cases of COVID-19. The plant is staying open.
As of Tuesday, there were 3,095 COVID-19 cases in Alberta.
Gulf Keystone Petroleum Gave Away Crude Oil For Free In April – OilPrice.com
If you were wondering how those negative crude oil prices in April played out in the physical market, now we know.
As the price of WTI fell below the $0 mark last month, Gulf Keystone Petroleum Ltd., a seller of Shaikan crude oil produced in northern Iraq, gave its oil away last month for free according to Bloomberg, as the price of its oil pumped from the Shaikan field traded more than $21 under Brent prices.
Brent traded at an average of $21.04 for the month of April.
The recipient of the month’s worth of free crude was the Kurdish regional government. It’s unclear if they had to make up the 4-cent difference per barrel—but at any rate, that $43,000 price tag for more than a million barrels of oil is still quite the bargain.
Gulf Keystone Petroleum produces 36,000 barrels a day of the Shaikan crude, according to the company’s website. Gulf Keystone made the Shaikan 1 discovery in 2009, before selling domestically in November 2010.
GKP’s full-year after tax profit for 2019 was $43.5 million.
Oil managed to stay out of the red in May, with the price of a Brent crude barrel on Thursday reaching over $35 per barrel, as the supply outlook has improved with significant OPEC cuts, and oil demand has improved since April. Brent topped $65 at the beginning of the year.
But oil prices are not expected to make a drastic recovery overnight. Lingering lockdowns in the world’s largest demand center, the United States, is stymying any recovery on prices, even as OPEC, Russia, and the United States have managed to cut production by millions and millions of barrels per day.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
TD and CIBC cap three days of dismal forecasts of economic impact of COVID-19 – The Globe and Mail
Two more major Canadian banks have reported quarterly profits declined by more than half as they stocked up reserves to absorb anticipated loan losses, capping three days of dismal forecasts from bankers about the extent of the economic damage the novel coronavirus could do.
Toronto-Dominion Bank set aside more than $3.2-billion in provisions to cover losses on loans that could go sour, an eye-catching sum that eclipsed large spikes in provisions at each of the other Big Six banks. Canadian Imperial Bank of Commerce set aside more than $1.4-billion as a reserve against its own potential losses on Thursday.
The need to rapidly build bulwarks against future losses was the driving force behind the steep plunge in earnings across the sector in the fiscal second-quarter – profits declined 52 per cent at TD and 71 per cent at CIBC. But in the midst of a global pandemic that prompted a wide-ranging economic shutdown, all six of the country’s big banks remained profitable, with capital levels securely intact and their quarterly dividends unaltered.
“I think that’s one reason the banks’ [stocks] are rallying, even though the results themselves in absolute terms are not good,” said Meny Grauman, an analyst at Cormark Securities Inc. “There’s a big relief that there was no bomb so far in the results.”
The provisions that banks booked were largely based on complex forecasts of possible future losses, calculated using the best assumptions they can cobble together at this stage. They provide a yardstick by which to measure the potential scale of economic carnage from COVID-19, taking stock of debt held by consumers as well as businesses of all sizes in an array of industries. But the pace of recovery is uncertain, and senior bankers warned that a return to precrisis profitability won’t be quick.
“It may take to , it may take to early  before you see a robustness back in the banking sector again, assuming that the health care crisis is behind us,” Victor Dodig, CIBC’s chief executive officer, said on a conference call with analysts.
For the three months that ended April 30, TD reported profit of $1.52-billion, or 80 cents per share, compared with $3.17-billion, or $1.70, a year ago. Adjusted for certain items, TD said it earned 85 cents per share, on an adjusted basis, matching analysts’ consensus estimate, according to Refinitiv.
In the same period, CIBC earned $392-million, or 83 cents per share, compared with $1.35-billion, or $2.95 a share, last year. On an adjusted basis, CIBC said it earned $0.94 per share, far shy of the $1.65 in adjusted earnings per share analysts expected.
The resilience of banks’ capital levels was an important theme in the second quarter, and each large Canadian bank emerged with billions of dollars in excess capital over and above the minimum threshold set by regulators. Yet TD had a sharper decline than expected in its common equity Tier 1 (CET1) ratio – which measures a bank’s highest-quality capital relative to its assets, an important indication of a financial health – which fell to 11 per cent, from 11.7 per cent a year ago.
A range of factors contributed to the drop, including share buybacks before the crisis and changes in foreign exchange rates, but the bank also adjusted the levels of risk it assigns to various assets as customers drew heavily on credit lines when the shutdown began in mid-March. To be prudent, TD introduced a 2-per-cent discount on shares purchased through its dividend reinvestment plan (DRIP), which is a tool to raise capital, after BMO made the same move in April.
By contrast, the CET1 ratio at CIBC didn’t budge, remaining at 11.3 per cent, partly as result of a routine adjustment of the bank’s models. As some loans deteriorate because of economic losses owing to the economy shutting down, however, CIBC expects some pressure on the ratio is possible in the current quarter.
After two days of surging prices for bank stocks, shares in TD and CIBC both gave back some ground on Thursday, falling 3.8 per cent and 2 per cent, respectively, on the Toronto Stock Exchange.
Even as banks prepare for a surge in impaired loans, actual losses have been delayed in some cases by payment deferral programs the banks are offering and government relief measures. TD said it has deferred payments on $62-million in loans to consumers and businesses, a majority of which is made up of mortgages, while CIBC has granted payment deferrals on loans worth $51.6-billion to clients in Canada, the United States and the Caribbean.
As those programs expire, banks expect most customers to resume payments. “I view the deferral programs to be ultimately risk-reducing,” said Ajai Bambawale, TD’s chief risk officer, because they give customers breathing room to bounce back from a temporary loss of income.
But TD has built reserves to cover some losses on deferred loans, “because in our view it is a matter of time before some become delinquent, others may become impaired as well,” he said.
Driving up loan-loss provisions played a major part in sapping profits in the banks’ core retail divisions. Customers also spent less money on cards and used spare cash to pay down debt. And rapid cuts to interest rates by the Bank of Canada and the U.S. Federal Reserve squeezed profit margins on loans.
At TD, retail banking profit fell 37 per cent to $1.17-billion in Canada, and plunged by 90 per cent in its U.S. retail arm, to $102-million, excluding profit from the bank’s share of TD Ameritrade Holding Corp. And CIBC’s profit from Canadian personal and small business banking fell 64 per cent, to $203-million.
In banks’ capital markets divisions, robust levels of trading activity and record levels of debt underwriting were expected to help prop up banks’ profits. But in several cases, those benefits were eclipsed by rising provisions on corporate loans and losses on certain trading strategies in volatile equity markets.
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Ski-Doo maker BRP reports $226-million loss as growth skids in pandemic – Financial Post
Ski-Doo maker BRP Inc.’s high-growth trajectory skidded this spring due to the coronavirus pandemic that eroded demand for some of its recreational products as dealerships closed their doors to follow lockdown orders.
On Thursday, the Quebec company, originally part of Bombardier Inc. until it was spun off in 2003, reported a net loss of $226.1 million in the three months ended April 30. The loss was driven by a $171.4-million writedown in its marine division, which will stop producing outboard engines given existing troubles exacerbated by COVID-19.
But BRP executives said sales across all products and geographies are up about 35 per cent in May so far compared to this time last year as people look for activities closer to home. In the United States, BRP’s largest market, sales even increased 4.8 per cent in the first quarter.
“With the new travel restrictions and vacation at home trend, our retail is returning strongly and showing very positive signs,” BRP chief executive José Boisjoli said in a statement.
Despite the optimism that COVID-19 could actually be good for business and continued strength in the U.S., BRP estimates revenue will fall 40 per cent in the second quarter compared to the same period last year and drop between 10 and 20 per cent in the second half of the year.
Analysts are also skeptical that May’s sales volumes are sustainable.
“This is likely driven by consumers foregoing travel and instead planning staycations with powersports, an ideal activity to respect social distancing,” National Bank analyst Cameron Doerksen noted to clients Thursday.
BRP has been on a tear over the past several years, with its market value eclipsing that of its former parent earlier in 2020 before the pandemic took hold. But it could be difficult to continue on its growth trajectory as millions of people lose their jobs across North America. Disposable income for expensive products like personal watercraft has historically taken a hit during recessions.
“Given that consumer demand for powersports is ultimately driven by broader economic conditions, we do not believe this retail performance will continue,” Doerksen noted.
BRP stock plummeted from an all-time high of $74.80 per share in mid-February to $19.75 by the end of March, but has rallied higher since then. The stock closed $48.81 per share, down 3.75 per cent, on Thursday.
National Bank raised its price target to $55 from $40 to account for BRP shedding its outboard engine division, which was struggling to compete against the dominant industry player and dragging down profitability.
Still, BRP managed to gain market share from its competitors during the pandemic, particularly in its relatively new side-by-side utility vehicle division. Doerksen expects this trend to continue as BRP has the financial strength to invest to keep investing in new products during a downturn.
Boisjoli acknowledged the COVID-19 crisis significantly disrupted business, but said the company was able to successfully adjust its plans.
BRP temporarily stopped or slowed down all of its marine and powersports manufacturing operations due to government restrictions during the pandemic. It implemented temporary layoffs and permanently cut approximately 900 positions around the world. Most of its manufacturers and dealerships have since re-opened, including its snowmobile plant in Valcourt, Quebec.
But the pandemic led BRP to permanently stop building outboard engines, a move that will result in 650 job losses globally. It will repurpose its facility in Sturtevant, Wisconsin, and permanently shutter its plant in Arkadelphia, Arkansas, as part of the reorganization.
“This business segment had already been facing some challenges and the impact from the current context has forced our hand,” Boisjoli said in a separate announcement Wednesday.
BRP will concentrate instead on the pontoon and aluminum fishing markets.
The exit from outboard engines could be a boon to the company as the product sold under the Evinrude brand struggled to gain traction and hurt profitability.
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