This story is part of The COVID Economy, a CBC News series looking at how the uncertainty of the coronavirus pandemic is affecting jobs, manufacturing and business in regions across Canada.
As harbingers of pandemic doom go, there was little more startling news for residents of Newfoundland and Labrador over the last month than learning that Hibernia would stop drilling for oil.
Hibernia is many things — the name of an oil field, the company that owns it, the name of the massive platform that sits on the ocean floor about 315 kilometres southeast of St. John’s — but it is also a symbol of the province’s economy, and how dramatically it has changed in a generation.
The revelation last week that lead operator ExxonMobil would halt drilling for as much as 18 months was just one of a cascade of announcements that underline the deep, deep trouble that Newfoundland and Labrador is in.
Many of these problems — a crushing government debt, an oil industry that has been struggling, an economy that is not yet diversified enough to withstand the roller-coaster rides of the global commodities trade — were all there before COVID-19 crashed into Canada this winter.
If anything, the pandemic just pushed existing problems into high relief, and proved that even pillars of the economy, like Hibernia’s sturdy gravity-based platform, can be shaken to the core.
From cod to oil
Hibernia has enjoyed a special status for more than two decades. It was the first field to go into production off Newfoundland’s east coast, ushering in an economic change that has been transformative.
It’s also critical to understand Hibernia’s timing. It arrived on the scene just when a beleaguered economy needed it.
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In 1992, the cod fishery off Newfoundland’s northeast coast was shut down, wiping out 20,000 harvesting and processing jobs. Other fishery closures would follow, and the industry that had sustained England’s first colony for centuries became a fraction of its former self.
The cod moratorium happened in July 1992. Only three months later, construction began on the Hibernia gravity-based platform. Within five years, Hibernia was producing oil, and a very different economic narrative starting taking place in Newfoundland and Labrador.
Dwight Ball has appeared at many daily briefings on COVID-19 — a role he did not expect when he announced plans to resign as premier in February. (CBC)
Well, for a while, anyway.
In the boom years, when Brent Crude — the commodity that is followed closely in St. John’s, in the same way West Texas Intermediate is followed in Alberta — was selling well over $100 US a barrel, money was flowing in Newfoundland and Labrador. In 2008, then-premier Danny Williams struck lucrative deals with labour unions, offering four-year contracts that effectively hiked wages by almost 20 per cent.
Falling oil prices, mounting debt
The global economy collapsed later that year, but N.L. bounced back, its revenues driven largely by oil revenues and royalties.
That bounce did not last. By 2015, the global collapse in oil prices caught up with N.L.’s ledger, which has been running in ever-deeper shades of red ink since.
Employees at seafood processing plants, like this one in St. Anthony, N.L., typically work in proximity. It is not clear if physical distancing can work in such plants. (Bruce Tilley/CBC)
One of the key reasons has been the Muskrat Falls hydroelectric megaproject, which is nearly complete at a cost of $12.7 billion, far above the $7.4 billion cost that the government of Kathy Dunderdale approved at sanction in 2012.
But Muskrat Falls isn’t the province’s only debt headache. The government has continued to spend more than it earns. The latest report from the auditor general, last December, put the per capita debt at $29,250 for every person in the province — a dubious record — with the government facing a net debt of $15.4 billion.
Debt servicing was already a serious issue before the pandemic, but the urgency now is even more severe. On March 20, Premier Dwight Ball wrote to Prime Minister Justin Trudeau about worries that the government could “go under.” Days later, after N.L. was unable to raise money in the markets, the Bank of Canada bought up short-term provincial bonds, and Ball would later say the government was not at risk of failing to make payroll.
Newfoundland and Labrador has been — on paper, at least — a so-called have province since 2008, when it no longer qualified for federal equalization payments. That’s largely because the impact of the oil industry on gross domestic product is so dramatic.
Trouble in almost every sector
At street level, N.L. has not felt like a have province for the last few years, and one by one, indicators for hope have been knocked down amid the pandemic.
The fishing industry — which transformed itself after the cod moratorium, with a focus on shellfish and live exports to Asian markets — is in great peril. At sea, working on the boats necessitates physical proximity, and it’s no different in seafood processing plants, like other industrialized food businesses.
Newfoundland and Labrador’s advertising, featuring idyllic — and stylized — images like this, has been credited with driving dramatic growth in the province’s tourism industry. (Newfoundland and Labrador Tourism/YouTube)
Brenda Greenslade, who runs the Fish Harvesting Safety Association, says physical distancing is extraordinarily difficult on fishing vessels, where every nook and cranny has a purpose. “A harvester told me the other day, their accommodations when they sleep, their heads are so close together, they share the same dream,” she told CBC News last week.
Other industries that Newfoundland and Labrador has been nurturing are in trouble. Tourism has grown substantially in the last decade, powered by colour-drenched, whimsical advertising campaigns that play up the rugged coastlines and down-home values of the place — an excellent locale for physical distancing, but impossible to reach while most travel remains effectively grounded.
Other elements of the economy have, one after another, fallen into trouble:
‘There is going to be an economic crisis’
Ball has not sugar-coated the circumstances, and during daily COVID-19 briefings he often reminds residents that while the health emergency is the top priority, an economic one will then need to be solved.
The floating platform at the Terra Nova oil field had been set for an upgrade later this year in Spain, but the COVID-19 pandemic has deferred those plans. (Suncor Energy)
“Coming out of this, there is going to be an economic crisis, and the provinces and the country will be indeed economically sick as well,” Ball said at the end of March.
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Ball himself, though, will likely not be tasked with resolving Newfoundland and Labrador’s fierce economic woes. In February, under considerable pressure from his own ranks, the Deer Lake pharmacist and businessman — who last spring led the Liberals to a significantly reduced majority — announced plans to step down as premier.
Like almost everything else, those plans have been pushed aside. The Liberals deferred a leadership convention that had been set for May 9, and the candidates to succeed him have suspended their campaigns. Ball has said he will stay on as long as it takes.
So, for now, as almost every industry struggles, Ball finds himself in the unexpected position of steward of a have province that is effectively broke, and with nothing but storm clouds overhead.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
