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Teck pulling out of oilsands project ‘another straw on the camel’s back’ for Alberta economy: think tank – Global News

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The decision by Teck Resources to pull out of a multi-billion-dollar oilsands project in northern Alberta is “not the end of the world,” according to the Canada West Foundation, though it considers it to be “another straw on the camel’s back in terms of Alberta’s economy.”

In a letter addressed to federal Environment and Climate Change Minister Jonathan Wilkinson on Sunday, Teck’s CEO and president Don Lindsay said the company was withdrawing from the proposed $20.6-billion Frontier mine because of the broader conversation around climate change in Canada.


READ MORE:
Teck Resources withdraws application for $20B Frontier oilsands mine

Marla Orenstein, director of the natural resources centre at the Canada West Foundation, said she agreed with some of the points Teck made in its letter, especially when it comes to having “a common environmental plan” for major resource and energy projects in the country.

“They were saying that this country really needs to figure out what it wants in terms of an energy policy: how we reconcile energy development, Indigenous rights and climate issues,” Orenstein said.

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“Those are our big, thorny, hairy issues that we have problems with and we haven’t figured out how to reconcile them yet. We’re desperately looking for leadership from the federal government on how to move forward so that all these things can progress in tandem, and that hasn’t been resolved, not by a long shot.

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“And until that is resolved, future projects are likely to get caught up in the same problem.”






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Politicians point fingers after Teck pulls out of $20.6B oilsands project


Politicians point fingers after Teck pulls out of $20.6B oilsands project

Orenstein said many people are disappointed by the end result, both because of the jobs the project was expected to deliver and because the Frontier mine was seen as a project that could reinforce the country’s oil and gas sector as a viable industry. However, she said the company’s decision not to move forward on the project doesn’t mean “oil and gas is finished in Canada.”

“I think that’s far from the truth. There remains a really strong demand for oil and gas products around the world and as long as there is, there’s going to be companies that need to come forward to provide that,” she said.

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For oil and gas company Tundra Process Solutions, the cancellation of the project is another blow to the already struggling industry.

“I saw this as a beacon of hope,” CEO Iggy Domagalisk said. “There were no real projects that were being announced, and to hear that this massive project was being led by a company that has a wonderful environmental record, [and] was going to be built in Alberta for Canada, I thought that was something spectacular.”

Domagalisk said the most “devastating” part is that it wasn’t the government that backed down, but the company behind it.

“To see not even the government cancel it, but the company itself pull out and say that, ‘We don’t believe that we can get this done,’ I think it sends a message to others that they likely think they can’t get it done either,” he said.

‘Investment craves certainty’

While Teck and its mine were seen by some as a “touchstone” for future oil and gas projects, Martin Olszynski, an associate professor with the University of Calgary’s Department of Environmental and Natural Resources Law, said the significance of the decision is being overplayed.

“How much value it has really depends on our politicians right now, and they should be mindful to not make it sound too gloomy because investors will respond to that as well,” Olszynski said.

The Frontier mine isn’t the first oilsands project to go through the regulatory process in the past 10 years and not come to fruition, Olszynski said; Shell’s Jackpine mine expansion and Total’s Joslyn North projects were both approved in the early 2010s and remain dormant.

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READ MORE:
Teck Resources has abandoned its Frontier mine plan. Here are the factors being blamed

Olszynsky said the federal government’s current regulatory process — the Impact Assessment Act and the Canadian Energy Regulator Act, commonly known as Bill C-69 — “provides a benchmark and a guidepost” for potential investors to align their projects with.

“One of the things that investment craves is certainty,” he said.

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In Teck’s letter to Wilkinson, Lindsay said that “the promise of Canada’s potential will not be realized until governments can reach agreement around how climate policy considerations will be addressed in the context of future responsible energy sector development.”

“Without clarity on this critical question, the situation that has faced Frontier will be faced by future projects and it will be very difficult to attract future investment, either domestic or foreign,” Lindsay said.






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Teck Resources supports Canada’s climate change action: Trudeau


Teck Resources supports Canada’s climate change action: Trudeau

Olszynsky said the Alberta government’s environmental regulations are more ambiguous, leading to a policy “back-and-forth” that stood in Teck’s way.

“I do think that the work the federal government is doing right now actually is the work that Teck seems to be asking for. It says: ‘Show us how these projects are going to work within this broader system,’” he said.

Canada ‘struggling’ with getting major projects done

Tim McMillan, CEO of the Canadian Association of Petroleum Producers (CAPP) said Canada has “positioned ourselves as a country that has struggled to get major projects done,” citing the Northern Gateway and Energy East pipelines which were both cancelled after approvals because of policy inconsistencies across provincial lines.

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“I think that puts a cloud over Canada in general,” McMillan said. “Today it’s over the oil and gas sector, but global investors have to look at Canada after announcements like this and ask, ‘Can we build anything here? Is Canada a jurisdiction that wants high-quality projects and capital investment?’

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“It’s going to take some work to reposition ourselves for success next time around.”

McMillan said he believes the Frontier mine was viable and that the challenge came when it reached the political stage, adding that stakeholders need to “do some real thinking” about how to move forward with major projects.


READ MORE:
Teck project environmental deal reached between First Nation and Alberta government

“This is a major undertaking — a very large project in Canada,” he said.

“The communities have been involved in this right from the beginning; Indigenous communities have been involved and had support agreements that would see them benefit from this going forward. The science that goes into how the processes work has been under development for years.

“And to go through the joint review panel and the provincial and federal review agencies and have them say, ‘This is a good project and should be approved’ — this has cost over $1-billion and that now evaporates and becomes a writeoff on a balance sheet.”






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Teck project environmental deal reached between First Nation and Alberta government


Teck project environmental deal reached between First Nation and Alberta government

Goldy Hyder with the Business Council of Canada said businesses want a “predictable regulatory regime” and that she believes Canada’s has become less consistent over the past 10 years, instead becoming “very politicized.”

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“Canada has to have the ability to reconcile the environment and the economy,” she said.

“We need to address it and we need to address it together, and that means moving out from the extremes and into the middle to find common ground.

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“What would help is if our governments… either get out of the way or make things clear in such a way that they don’t need to be in the process on an ongoing basis. We need to depoliticize our regulatory system.”

— with files from Global’s Adam MacVicar, Adam Toy, Maryan Shah and Mercedes Stephenson

© 2020 Global News, a division of Corus Entertainment Inc.

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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.

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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.

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