OTTAWA — As German Chancellor Olaf Scholz is set to arrive in Canada on Sunday, Prime Minister Justin Trudeau is facing renewed calls from Ukraine to cancel a permit allowing turbines repaired in Montreal to be sent back to a Russian energy giant.
Scholz, who took over from Angela Merkel in December last year, is expected to land in Montreal on Sunday evening for a three-day visit that also includes scheduled stops in Toronto and Stephenville, N.L.
He will be accompanied by Vice-Chancellor Robert Habeck, who is in charge of the country’s energy file.
A statement from the Prime Minister’s Office said the visit will advance shared priorities between Canada and Germany “including our unwavering support for Ukraine, protecting peace and security in Europe and around the world, and addressing the broader global impacts of Russia’s illegal and unjustifiable invasion.”
Ukraine has criticized Trudeau and his government for a decision last month to agree to a request from Germany to exempt Siemens Canada from sanctions against Russia so it could return a turbine for use in the Nord Stream 1 pipeline that supplies natural gas to Germany.
The turbine had been under repairs at Siemens’ Montreal facility, the only location in the world capable of maintaining the equipment. It was delivered to Germany and was supposed to go to Russia from there, but Russian authorities have so far refused to accept it.
Russia has also cut gas flows in the pipeline to 20 per cent of capacity and recently announced it would shut down the line entirely for three days at the end of the month, citing the need for unscheduled maintenance.
Canada’s permit also allows Siemens to import, repair and return five other turbines used in Nord Stream 1, according to their maintenance schedule, and is valid until the end of 2024.
In an interview, the Ukrainian ambassador to Canada, Yulia Kovaliv, called again for the waiver to be cancelled.
She said it is clear that Russia will not accept the turbine that Siemens has delivered to Germany, and accused Russia of using gas supplies as a way of terrorizing Europe.
“Our position is quite clear: we do think that this waiver should be cancelled and now,” she said.
“If it was an argument to call Putin’s bluff, everybody sees for the last few weeks it is now quite obvious that it is Russian games.”
Orest Zakydalsky of the Ukrainian Canadian Congress said the chancellor’s visit will “be a chance for them to reverse the policy and cancel the permit.”
Ministers have defended the move as necessary to secure gas supplies for Germany, as well as to call Putin’s bluff. They argue the Kremlin would have used Canada’s refusal to return the turbine to blame sanctions for energy shortages in Europe, which could undermine public support for Ukraine.
Natural Resources Minister Jonathan Wilkinson said in an interview that Canada will continue to “assess” its decision to allow the turbine to be returned to Gazprom, the Russian state-owned energy giant that operates Nord Stream 1.
“It was obviously a difficult decision and it was one that we made on the basis that we believe that not sending the turbine back would have given Putin an excuse,” he said.
“It would have potentially had the effect of undermining the support that Ukraine enjoys on the part of some of the European populations.”
Wilkinson said he now felt Russia’s position has been exposed and there is increasing pressure on Gazprom and on the Russian government.
“Our expectation and our hope is that the turbine will actually go back to Gazprom, and it will eventually come into service.”
He added that the government stands by its decision and feels it is far too early to be thinking about changing its exemption, but said “we will have to see what evolves over the next few months.”
“We obviously will continue to have a dialogue with our European partners and our German partners,” he said.
Scholz and Trudeau plan to discuss energy security and the transition to clean energy, “including through secure access to key resources like clean hydrogen and critical minerals,” according to the Prime Minister’s Office.
In Stephenville, the leaders are expected to sign a pact that will set aggressive timelines and targets for exporting hydrogen to Germany, though some experts warn the deal will serve only as a small, far-off and expensive part of the solution to Europe’s energy crisis.
A consortium of four partners calling itself World Energy GH2 plans to build a zero-emission plant in the Newfoundland community that will use wind energy to produce hydrogen and ammonia for export.
If approved, the project would be the first of its kind in Canada.
The consortium has said the first phase of the proposal calls for building up to 164 onshore wind turbines to power a hydrogen production facility at a deepsea port. Long-term plans call for tripling the size of the project.
This report by The Canadian Press was first published Aug. 21, 2022.
Demands for government intervention in Air Canada labour talks could negatively affect airline competition in Canada, the CEO of travel company Transat AT Inc. said.
“The extension of such an extraordinary intervention to Air Canada would be an undeniable competitive advantage to the detriment of other Canadian airlines,” Annick Guérard told analysts on an earnings conference call on Thursday.
“The time and urgency is now. It is time to restore healthy competition in Canada,” she added.
Air Canada has asked the federal government to be ready to intervene and request arbitration as early as this weekend to avoid disruptions.
Comments on the potential Air Canada pilot strike or lock out came as Transat reported third-quarter financial results.
Guérard recalled Transat’s labour negotiations with its flight attendants earlier this year, which the company said it handled without asking for government intervention.
The airline’s 2,100 flight attendants voted 99 per cent in favour of a strike mandate and twice rejected tentative deals before approving a new collective agreement in late February.
As the collective agreement for Air Transat pilots ends in June next year, Guérard anticipates similar pressure to increase overall wages as seen in Air Canada’s negotiations, but reckons it will come out “as a win, win, win deal.”
“The pilots are preparing on their side, we are preparing on our side and we’re confident that we’re going to come up with a reasonable deal,” she told analysts when asked about the upcoming negotiations.
The parent company of Air Transat reported it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31. The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
It attributed reduced revenues to lower airline unit revenues, competition, industry-wide overcapacity and economic uncertainty.
Air Transat is also among the airlines facing challenges related to the recall of Pratt & Whitney turbofan jet engines for inspection and repair.
The recall has so far grounded six aircraft, Guérard said on the call.
“We have agreed to financial compensation for grounded aircraft during the 2023-2024 period,” she said. “Alongside this financial compensation, Pratt & Whitney will provide us with two additional spare engines, which we intend to monetize through a sell and lease back transaction.”
Looking ahead, the CEO said she expects consumer demand to remain somewhat uncertain amid high interest rates.
“We are currently seeing ongoing pricing pressure extending into the winter season,” she added. Air Transat is not planning on adding additional aircraft next year but anticipates stability.
“(2025) for us will be much more stable than 2024 in terms of fleet movements and operation, and this will definitely have a positive effect on cost and customer satisfaction as well,” the CEO told analysts.
“We are more and more moving away from all the disruption that we had to go through early in 2024,” she added.
This report by The Canadian Press was first published Sept. 12, 2024.
