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Higher home gas bills are ‘not going away,’ but you can cut your costs

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About half of Canadian homes are heated with gas furnaces and energy analysts say those homeowners should get used to the idea that gas prices are not going to fall back to low levels seen in recent years.

Though winter has yet to arrive, bigger utility bills are another new cost facing Canadians already battered by months of inflation on food prices and many more goods and services.

“It depends on where you are in Canada, but in general about a 30 per cent increase in your utility bill,” said Jackie Forrest, the executive director of the ARC Energy Research Institute in Calgary.

“And I would expect that’s not going to go away.”

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Natural gas, which is mostly methane, a fossil fuel, is widely used to heat homes from Ontario west, whereas electricity and oil are the primary home heating sources from Quebec to Atlantic Canada.

While several factors are contributing to the price increase for natural gas, experts say homeowners can take steps to reduce their heating bills — including, for some, getting off gas altogether.

“There’s actually quite a number of things one can do even without spending a whole lot of money,” said Violet Kopperson, an energy advisor with the Windfall Ecology Centre in Aurora, Ont., just north of Toronto.

 

Keeping warm at home could be a bigger part of Canadians’ budget this winter as natural gas prices begin to climb. Experts say Canada is selling its natural gas abroad due to worldwide demand, which is putting pressure on domestic supply.

Price fluctuations, war and exports

This summer, natural gas prices in Canada rose to around nine dollars per gigajoule (GJ), about three and half times the average rate of the last six years, says Forrest, an energy analyst with 25 years of experience.

They’ve eased lately but she says they are not going to return to an average of about $2.90 per GJ that Canadians became accustomed to since about 2016.

“I think the last six years was an unusual period where we had very cheap gas. I don’t think that’s the future,” said Forrest.

Jackie Forrest, executive director of the ARC Energy Research Institute in Calgary, says higher prices for natural gas ‘are not going to go away.’ (Colin Hall/CBC)

For several years there were high levels of natural gas production in North America and, she explained, a tiny level of exports.

More recently, though, North American natural gas producers have increased their exports. The change comes in part because of greater demand from European nations who have cut ties with Russia over its invasion of Ukraine, or been cut off from access to Russian by Vladimir Putin as retaliation for economic sanctions.

While about 10 percent of North American production is exported currently, Forrest says exports will keep rising.

“Before the end of this decade, we’ll be sending about 20 per cent of North American production overseas,” she said, adding that she doesn’t see the industry increasing production to hold prices in check.

“We’re going to have structurally higher gas prices than we used to have,” she said, “so it’s really changing the dynamics for North American gas markets.”

Your bill and tips to cut it down

A gas bill is more than the cost of the gas, Forrest notes.

“Energy cost is just about one-third of your bill. You have other things like fees for distribution and transmission and you have carbon prices and things like that.”

But there are simple ways you can cut that complicated heating bill down.

Violet Kopperson is an energy advisor with the Windfall Ecology Centre in Aurora, Ont. She says there are many things homeowner can do to cut down their gas bills without a great cost. (James Dunne/CBC)

Kopperson, whose job is to assess homes for energy efficiency and provide advice to homeowners, has plenty of tips.

Simple low-cost actions include things like:

  • Lowering the thermostat while you sleep.
  • Making sure exterior doors have weather stripping and sweeps to prevent heat escaping.
  • Sealing around small holes for cable lines and vents.
  • Changing your washrooms to low-flow shower heads.

A low flow shower is cheaper because “the more hot water you use, the more energy you use,” said Kopperson.

More expensive changes can include upgrading to triple-pane windows and adding insulation to your attic or walls.

Getting off gas, with grants

Kopperson also recommends homeowners take a look at the federal government grants and loans for improving the energy efficiency of your home, which can offset some of those renovation costs. Some provinces and cities also have financial incentives for retrofits.

Suzanne Kettley of Ottawa is switching her home off natural gas to heat pumps and electricity. She wanted to cut her carbon footprint and also hopes to avoid high natural gas prices. (Toni Choueiri/CBC )

Suzanne Kettley of Ottawa is taking advantage of those programs to improve the energy efficiency of her house and get off gas altogether.

She just replaced her furnace with a heat pump to keep her home cozy in the winter and cool in the summer.  Soon she’s adding a hybrid water heater that uses a heat pump and electricity to provide hot water.

“I’m lucky because at the same time that I’m going to be decreasing my carbon footprint, I’m also going to be avoiding the higher gas prices.”

She also hopes to see long term savings in dealing with only one utility company and one form of energy electricity.

“If I’m paying delivery fees and administration fees, if I’m only paying them once to one company, then that’s going to be cheaper.”

Part of the new heat-pump system outside Kettley’s home in Ottawa. (Toni Choueiri/CBC)

High prices are relative

As prices rise in Canada, consumers may find some small relief in the fact that the situation here is not as bad as it is in Europe.

There, governments have asked people to cut back on consumption and limit the temperature of their homes, while some businesses have reduced hours or even closed because of higher heating costs.

This week, leaders of the European Union debated but failed to come to a deal on capping gas prices, though earlier this year the idea was supported by 15 EU countries.

The new European market for North American gas means Canada’s no longer a “bottled up island” where the gas supply has nowhere to go but to domestic and American consumption.

“We’re being more influenced by what’s happening in the rest of the world,” said Forrest.

“We still have cheap energy, but it’s just not as cheap as we are used to.”

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Tesla adds another recall to a ‘Total Recall’ year

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Tesla issues a recall on 80,000 cars in China adding another one to a year with a lot of recalls, but most of them are easily fixed with software updates.

 

Earlier this year, NHTSA issued a series of recalls on Tesla vehicles that were highly reported in the media.

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What was less reported, though, is that almost all of those recalls were fairly simple software issues that Tesla has been able to fix through over-the-air software updates.

Whenever there’s a safety-related issue, NHTSA has to issue a “safety recall,” even if the automaker doesn’t have to physically recall any vehicle, which leads to some confusion.

Again last month, a Tesla recall of “1 million vehicles” made many headlines when the recall simply consisted of Tesla changing how its software handled window operations. These instances have led Tesla CEO Elon Musk to complain about the term “recall” and how it is used against Tesla by the media.

Today, Tesla also announced more recalls in China on about 80,000 vehicles.

According to Chinese authorities, the recall includes 67,698 imported Model S and Model X vehicles with a software problem related to the battery pack. Again, the fix is a simple software update.

However, this time there’s also a physical recall due to a seat belt issue on about 13,000 Model 3 vehicles: 2,736 imported and 10,127 made in China.

With now over 20 recalls in 2022, it has been a “Total Recall” year for Tesla – pun intended:

But Tesla is not the only automaker affected by large recalls this year. Ford just confirmed that it is recalling another half a million vehicles due to a fire risk, and many automakers have also recalled millions of vehicles this year.

If anything, the fact that the large majority of Tesla’s recalls are quickly fixed with over-the-air software updates – rather than having to bring the cars back to the dealership like other automakers – shows that Tesla’s level of connectivity in its vehicles is a major advantage in the industry.

It makes for an easier experience for the customers, and it is much cheaper and more efficient for Tesla.

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Flair flight from Vancouver overshoots Ontario runway

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Vancouver couple Charissa Landicho and Mac Bradley just wanted a quick and cheap getaway, but a turbulent landing was not on their itinerary.

“I was definitely in shock because it was an overnight flight. I woke up, just, ‘What’s going on?'” Landicho said.

“We touched down and we could hear a loud thud. And it lifted up and it (went) down again,” she recalled.

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It was a frightening experience for the 134 passengers on the Flair Airlines Boeing 737, which went off the runway just before 6:30 a.m. Friday morning in southern Ontario.

The flight from Vancouver was landing at the Kitchener-Waterloo airport when it overshot the runway and ended up in the grass.

“To me, it felt like we pulled right and then next thing you know, we’re off the tarmac, in the field pretty much, bouncing around, smacking around,” said Bradley.

“We probably went like 50 to 100 metres off the runway,” he continued.

He said their plane tickets cost about $100 each, roundtrip, potentially saving them hundreds by going with the budget airline.

With no announcement or warning, the couple said they were only told to stay put and waited an hour to finally get off the plane.

“It was a little bit questionable because it seemed like nobody really knew what to do on the plane other than just trying to keep calm. So that was a little bit unnerving,” said Bradley.

“And the fact that we just got an automated text after asking us to leave a Google review on our experience was a little satirical,” he added.

In a statement, Flair Airlines said there were no reported injuries and passengers were taken to the terminal by bus.

There is no word on what caused the aircraft to overshoot the runway, but the Transportation Safety Board (TSB) has been deployed to investigate.

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Black Friday impacted by changing shopping habits

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When Shopify Inc.’s Harley Finkelstein surveys November’s retail landscape, he finds it hard to see where Black Friday stops and Cyber Monday begins.

The annual pre-holiday sales blitzes meant to encourage customers to drop cash on discounted goods have bled together in recent years, with stores extending Black Friday promotions beyond a single day and online retailers offering Cyber Monday deals all week — or all month.

“Black Friday/Cyber Monday used to be a weekend, now it’s more of a season,” said the president of the Ottawa e-commerce giant.

Many in the retail industry feel the divisions will be even more hazy this Cyber Monday as the COVID-19 health crisis continues to reshape shopping habits.

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During the pandemic, which saw stores temporarily close and people retreat inside their homes, there was a surge in online shopping.

As measures meant to quell the virus eased, many kept shopping online — but not at the rate some brands anticipated.

“Online shopping grew in popularity, obviously, through the pandemic, but it’s actually fallen off now because people are returning back to the store,” said Lisa Hutcheson, managing partner at J.C. Williams Group, a consulting firm.

“E-commerce spending is actually down year-to-date 11.5 per cent.”

The consumer shift back to brick-and-mortar stores blindsided Shopify, which had banked on online shopping continuing to accelerate at pandemic rates.

“It’s now clear that bet didn’t pay off,” chief executive Tobi Lutke said in a July statement announcing the company was laying off 10 per cent of staff as a result of the misjudgment.

The company’s stock traded for as high as $212 in the past year but has averaged closer to $50 in recent days.

So there’s a lot riding on the Black Friday/Cyber Monday weekend.

“Black Friday/Cyber Monday is sort of our Super Bowl,” said Finkelstein. “The culture and the energy at the company is really high right now.”

Black Friday

A survey his company conducted with 24,000 consumers and 9,000 small and medium businesses around the world found 59 per cent of Canadians planned to spend the same amount as or more than last year on Black Friday and Cyber Monday weekend. That figure rose to 74 per cent for those between the age of 25 and 34.

Finkelstein finds it hard to predict how the weekend will go, though he suspects it will be very different from last year, when the country was consumed with product shortages and the Omicron wave of COVID-19.

“This Black Friday/Cyber Monday seems far less frantic than last year,” he said. “There are less supply chain issues, more physical stores are open, there’s more inventory. There’s better capacity planning at the shipping companies.”

However, there is a new problem: inflation remains stubbornly high.

Michelle Wasylyshen of the Retail Council of Canada says “consumers tightened their belts a little” in recent months but still plan to spend the same as they did last holiday season, roughly $790.

“The difference this year is that they will be looking for more meaningful or practical gifts,” she wrote in an email. “They might also decrease the number of people they buy for or will give fewer gifts per person, but they do plan to shop.”

Finkelstein also foresees a more measured approach.

“They may not buy five things they have mediocre love for. They may buy two things they deeply want,” said Finkelstein.

“And they may also be thoughtful about how they buy … Is there a discount coming? I’ll wait until Thursday night or until Cyber Monday.”

The term Cyber Monday was coined in 2005 by the National Retail Federation, which noticed the Monday after Black Friday had delivered a big spike for online sales and traffic in the prior two years.

“We won’t be seeing quite the same spike that we have in the past,” Hutcheson predicted.

Some of that forecast comes from the stretched shopping window but also because some people are going to stick with their pandemic habits of online shopping.

Moneris is predicting Cyber Monday will be the busiest online shopping day, following a trend set in 2019 and 2020. However, Black Friday is still expected to be the busiest day in terms of total transaction count and dollars spent across all mediums.

Hutcheson said the week will play out as an “omnichannel view.”

Omnichannel is an industry term referring to making shopping seamless across online and mobile platforms as well as brick-and-mortar stores.

Finkelstein likes the term because the retail industry “is no longer online versus offline.”

“Saying omnichannel is a strategy will soon be akin to saying colour TV,” he said. “It is the norm and so consumers are shopping everywhere and everywhere.”

This report by The Canadian Press was first published Nov. 25, 2022.

Companies in this story: (TSX:SHOP)

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