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Investment boom coming for energy sector as 2050 looms, experts say

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CALGARY — Canada’s energy sector will be the recipient of a wave of public and private investment dollars in the coming decade, experts say, as the push to reach net-zero greenhouse gas emissions by 2050 gains momentum.

On Tuesday, the federal government through the Canada Infrastructure Bank announced an investment of almost $1 billion into Ontario Power Generation for the construction of the country’s first small modular nuclear reactor, which is being developed near the Darlington Nuclear Generating Station.

It was the kind of blockbuster announcement we can expect to see more of as the coming energy transition gathers steam, said Bruce Lourie, president of the Ivey Foundation, a private charitable foundation dedicated to supporting Canada’s transition to a net-zero future while ensuring the country’s long-term economic competitiveness.

“And every time there is an investment, every time there’s a new plant, there’s income from the investment, there’s jobs from the investment, there’s new economic activity, there’s trade,” Lourie said.

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“We hear a lot about how it’s going to cost a lot to transition the energy system. Well, we’re going to benefit a lot too.”

According to a report from RBC Capital, a record $920 billion was invested specifically in the global energy transition space in 2021, and tens of trillions more will be invested in the years to come as investors focus on decarbonization and growth.

Investment dollars will be needed for everything from carbon capture and storage and other projects aimed at helping to “green” traditional high-emitting sectors like oil and gas extraction, as well as for renewables, nuclear, electrification, large-scale building retrofits and more.

The projects that ultimately win out, from an investor perspective, will be the ones that are reliable, affordable and capable of achieving social licence, said Jacquie Hoornweg, executive director of Ontario Tech University’s Brilliant Energy Institute.

 

“If we’re committed that we’re going to do this (get to net-zero), we really have no choice but to invest in energy,” Hoornweg said.

Over the past decade, Canada’s energy sector has struggled with a lack of investment due to a variety of factors including commodity price woes, pipeline access issues, and regulatory and environment concerns. As a result, major new capital projects in the sector have been few and far between.

But in recent months, the Canadian oil and gas sector has rolled out a flurry of announcements of proposed projects — from hydrogen plants to renewable diesel facilities to carbon capture and storage — aimed at lowering the industry’s emissions profile.

Most of these projects — as well as “clean” energy projects such as nuclear and hydro power — are capital-intensive and long-term, said Richard Norris, an expert in energy security and energy policy and a fellow with the Canadian Global Affairs Institute.

“You don’t build these things in less than five or 10 years,” Norris said, adding the energy sector is probably entering into a decade of booming investor interest — something that will be amplified as more discretionary sectors are hit by the rising cost of living and slowing consumer spending.

“A lot of the sectors that have seen enormous growth over the last 20 years, particularly the tech sector, are not going to fare very well when energy costs get high,” Norris said.

“I think we’re going to see a structural shift of investors out of the exciting tech stocks and into the much more boring energy sector, because that’s the area we’re going to be seeing returns over the next few years.”

In an interview last month, Evan Siddall — head of the Alberta Investment Management Corp., which on Monday announced a $150-million investment in Tidewater Renewables, which is focused on the development of renewable fuels — said that AIMCo wants to be a leader in financing the transition to a low-carbon economy.

“We see the potential for strong financial returns,” said Siddall in the interview. “We’re a long-term investor, so unlike public markets that tend to operate quarter to quarter with much shorter-term horizons, we can look to a transition into 2030 and see the path to earning a return on decarbonization.”

This report by The Canadian Press was first published Oct. 26, 2022.

Amanda Stephenson, The Canadian Press

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Why Investors Are Buying Copper Today for a Green Energy Future

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Many countries have now set ambitious goals for reaching net-zero emissions by 2050. The goal was first discussed at the United Nations Climate Change Conference in Paris in 2015. Several signed the agreement at the conference stating that they would work to reach net-zero emissions.

Now, we have the technologies to make it happen. Electric vehicles, solar power, and wind turbines are all on the rise, and they will only get cheaper and more efficient. It’s important that we make the switch to clean energy sources now before it’s too late.

One big reason investors are buying copper today is that it’s an essential element in many green energy projects. Copper is used to building electric vehicles, power grids, and more. It’s also an important part of solar panels and wind turbines.

However, according to a recent S&P Global report, many authorities including the US government, the European Union, the International Monetary Fund (IMF), the World Bank, and the International Energy Agency (IEA) have expressed concern as to whether there will be enough minerals to meet the requirements of the emissions targets. The move to a mineral-intensive energy system will set up the current supply shortfalls in metals like copper for further squeezes.

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The industry scrambling to cover those shortfalls, mining, has seen major changes in the past decade. A focus on green energy as well as a tech industry that continues to grow has meant soaring demand for minerals such as copper. It has also meant rising valuations for projects that could contribute to the future of the copper market.

Projects like the Warintza copper project in southeastern Ecuador, owned by Solaris Resources (TSX:SLS) (OTCQB:SLSSF) have received significant interest from investors as it continues to advance its world-class greenfield development project. The company has already defined a 1.5Bt inventory in an open pit with a low strip ratio at the Warintza Central deposit, and within that a high-grade starter pit driving really robust economics. Warintza Central is one of four discoveries made within their porphyry cluster representing multiple times growth potential beyond the initial 1.5 Bt mineral resource.

The Warintza Project is one of many copper projects that investors are buying into today for a greener future. Copper is an essential part of green energy projects, and investors are betting that the demand for copper will continue to grow.

Copper’s historical role has shifted quite a bit. In the past, copper was only used to build things like electrical wires and the infrastructure needed to support green energy projects. Today, copper is an essential part of solar panels and wind turbines. Copper is also an important part of electric vehicles and the power grids that support them.

Infrastructure projects in the United States to build a stronger, bigger electrical grid also require copper. Initiatives to build charging station networks for EVs have begun in many major cities in the United States. Copper is also an essential part of these charging station networks, delivering the electricity needed to power the EVs that continue to grab more market share every year.

Unfortunately, the shortfall of copper and other critical minerals threatens to stall the switch from an emissions-heavy energy system to a more sustainable one. Rising copper prices and valuations for copper mining assets are sure to be part of the future of the industry. For Solaris Resources, continued progress at its flagship Warintza Project is more than just business – it’s a bet on the future of the world’s energy system.

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Is It a Good Idea to Invest in Casinos in Canada?

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Canada is a very interesting country when it comes to gambling and casinos. While most of the world’s top gambling destinations are located in Europe and the United States, Canada has a few hidden gems of its own. In recent years, online casinos Canada has been on the rise, with more and more people flocking to them in search of fun and excitement. However, as with any type of investment, there are always risks involved. So, before you decide to put your money into Canadian casinos, it’s important to understand both the risks and rewards that come with such an endeavour.

What is the current state of the Canadian casino industry?

The Canadian casino industry is currently in a state of flux, with many operators feeling the pinch from increased competition and stricter government regulation. There are many regulations that have been set by the government for Canadian online casinos and physical casinos, in order to ensure that the casino industry is fair and safe for all Canadians. Many of these regulations have been put in place in order to protect the consumer and to ensure that the industry is run in a responsible manner. If you are intending to open a casino in Canada, it is important that you are aware of all the current regulations that are in place.

One change that has taken place in recent years is an increase in the number of casinos on offer. Online casinos are becoming increasingly popular with Canadians, as they offer a convenient and affordable way to gamble. These casinos are able to offer a much wider range of games and services than their brick-and-mortar counterparts, and they are quickly gaining market share.

One of the biggest changes that have taken place in the Canadian casino industry is the introduction of smoking bans. In the past, many casinos allowed customers to smoke inside the premises, but this is no longer the case. Smoking bans have been introduced in order to protect the health of employees and customers and to create a more pleasant environment for all.

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The risks and rewards of investing in Canadian casinos

One of the biggest risks associated with investing in Canadian casinos is the fact that the industry is highly regulated. This means that there are a lot of rules and regulations that must be followed in order to operate a casino. Failure to comply with these regulations can lead to heavy fines or even the closure of the casino. Another risk to consider is the fact that the Canadian gambling market is relatively small when compared to other markets around the world.

Despite these risks, there are also a number of rewards that come with investing in Canadian casinos. For one, the Canadian gambling market is growing at a rapid pace. More and more people are discovering the fun and excitement that comes with visiting a casino, which is driving up demand. Additionally, because the industry is so heavily regulated, investors can be confident that their money is safe and sound. Finally, because Canada has a reputation for being a safe and stable country, investing in its casinos can be seen as a way to diversify one’s portfolio and reduce risk.

What is the potential for growth in the Canadian casino industry?

The Canadian casino industry is growing rapidly, with new casinos popping up all over the country. One of the reasons that the casino industry in Canada has been growing is the increasing popularity of gambling among Canadians. According to a recent study, gambling is now the most popular form of entertainment among Canadians, surpassing even movies and television. This trend is likely to continue, as more and more people become interested in gambling.

Another reason for the growth of the Canadian casino industry is the growing number of tourists visiting the country. Canada is a popular destination for tourists from all over the world, and many of them visit casinos while they are in the country. This trend is likely to continue as well, as more and more people visit Canada each year.

Another reason leading to the rampant growth of casinos in Canada is the legalization of gambling in the country. There are presently ten provinces in Canada that have legalized gambling and gaming facilities within their borders, with more likely to follow suit in the near future. The Canadian government has also been supportive of the industry by ensuring that all gambling operations are closely monitored to prevent any fraudulent activities. Online sports betting has also been legalized in Canada, which has further contributed to the growth of the casino industry.

All of these factors are likely to continue to fuel the growth of the Canadian casino industry in the years to come. With more and more people interested in gambling, and more casinos popping up all over the country, the potential for growth in the industry is very strong.

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Metro Vancouver investment deals could top $13 billion this year

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This year’s rapid rise in the Bank of Canada’s policy rate slammed the brakes on investment activity in the second half of the year, but better times await in 2023.

Quarterly deal volume reached an all-time high of $21 billion in the first quarter of this year, according to a report JLL released Nov. 28. But it has fallen steadily since, dropping to just $11.2 billion in the third quarter. Deal activity is on track to fall by half in the final quarter of the year.

CBRE Ltd, is calling for $56.1 billion in transactions this year, down about 5 per cent from last year’s peak of $59.1 billion. Vancouver – the epicentre of investment activity in B.C. – will see about $13 billion worth of transactions.

During a lending and investment market update on November 28, Peter Senst, president of the firm’s national investment team, was optimistic on the outlook.

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“We’re still trading with reasonable velocity. The size and significance of the deals that we’re doing in Canada, particularly in the second half of the year, will be the biggest in the world,” Senst said during the online presentation.

With inflation easing, he believes rate hikes are nearing an end.

“We’re thrilled with where inflation has seemingly hit a peak and is starting to come down,” he said.

“I believe we’re through the rate hikes, substantially,” he said. “Cost of financing we think will ultimately moderate through 2023 going into 2024, which is great.”

This will give investors the confidence to begin investing here once again, with industrial on track to benefit the most.

Deal activity will be led by industrial, which has knocked commercial assets – office and retail – out of the top spot as institutional investors and lenders rejig their exposure.

“This reflects the reweighting that’s going on in balance sheets and portfolios,” Senst said.

Vancouver is particularly well placed, with development constraints and low vacancies pushing rents to $20.67 a square foot. Growth is set to continue as companies seek space in an extremely competitive and constrained market.

“It’s not going to be an overbuilt market,” he said.

The optimism reinforces the findings of the recent Emerging Trends in Real Estate report, produced annually by the Urban Land Institute in partnership with accounting firm PricewaterhouseCoopers LLC.

“While some interviewees said that they were watching for signs of a slowdown in Vancouver’s industrial market and the impacts of rising interest rates, others emphasized that land scarcity makes this asset class a best bet,” the report stated.

It gives top marks to Vancouver, which leads the country in almost every measure except with respect to capital availability and the number of opportunities for development.

“Vancouver continues to be the top market to watch for both its investment and development prospects,” the report stated.

On the office side, the significance of the tech sector – a proxy for the city’s attractive lifestyle – was a key factor in its favour.

“Among the factors buoying the office market are a vibrant technology sector as well as a higher propensity for employees to return to the workplace in Vancouver and other cities in Western Canada,” the report stated.

While the current office development cycle is over as lenders hit pause on financing new projects, CBRE noted that Vancouver is well-positioned to navigate the challenges thanks to a market whose inventory of space is balanced between downtown and suburban locations.

This makes it easier for workers to meet in person, and also helps shorten commute times, which CBRE described as “the last compelling reason why people are not returning to the office.”

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