A good post-budget morning to you. Shari Kulha here to fill you in on the top stories that aren’t budget-related, so you can go through the day being the well-rounded person we know you are. (That said, our extensive Budget 2018 coverage can be found right here.)
Canada’s largest integrated energy company has filed an application for a massive new oilsands project, defying expectations of slowing growth in the oilsands. Geoffrey Morgan writes that the Alberta Energy Regulator issued a notice yesterday that Suncor is seeking regulatory approval to build a 160,000-barrels-per-day steam-based oilsands project north of Fort McMurray. Although the company hasn’t committed to it yet, it’s timed to start in 2027, to ensure continued operation for its upgrading facilities despite the shutdown of its base mine, which will see end-of-mine-life around 2033.
Bottom line: The project, to be built in four 40,000 bpd stages, would cost $6.2 billion in total and contribute almost $3.4 billion to Alberta’s GDP. It would employ an average of 580 construction workers per year and 1,000 construction workers at its peak in 2027 and 2028.
Exxon has decided to sell off its entire 19% stake in Terra Nova oil project off Newfoundland and Labrador, but said it doesn’t want to vacate the area completely. The Terra Nova project consists of a floating production, storage and offloading vessel to produce oil. PetroCanada, Husky Oil Ltd. and Murphy Oil Corp. are other partners in the project.
Bottom line: The project produced about 400 million barrels of oil. It consists of 30 wells that pumped about 5,000 barrels of oil per day in 2016, and 31,000 bpd last year.
INTO THE VAULTS
Bank of Montreal and Bank of Nova Scotia posted another set of upbeat results yesterday, continuing a solid earnings season for Canada’s big banks. Geoff Zochodne reports that Scotiabank posted approximately $2.34 billion profit for the three months ended Jan. 31, up more than 16 per cent. BMO reported a 35-per-cent drop in net income for Q1, to $973 million, after it had to take a $425 million charge connected to the corporate tax cut in the U.S.
Bottom line: These results follow strong earnings from CIBC and RBC last week. The Canadian banks have all seen their results benefit from interest rate hikes, the lowering of the U.S. corporate tax rate and relatively good economic growth. To come later this week are National and TD results.
AMBIENCE V. AMAZON
The restaurant business has served up a bold statement: It doesn’t fear the food-delivery upstarts anymore, or the grocery stores that have made shelf space for takeaway meals. As Hollie Shaw reports, consumers’ increasingly smartphone-enabled lifestyles are helping to send them back to restaurants again. “More and more people are cutting cable right now and they want to come and watch games live,” Boston Pizza’s Jordan Holm told her. “Social occasions can’t be replaced by drones or robots.”
Quote: “Steaks don’t travel well — you can’t cook a steak and have it turn up at my house 25 minutes later,” said Keg CEO David Aisenstat. “Amazon can deliver all the food they like, and that’s not going to substitute having a great night out …. They cannot duplicate that.”
DOUBLE DOUBLE TROUBLE
The Great White North Franchise Association, which represents some 70 per cent of Tim Hortons franchise owners, said yesterday it’s willing to take its parent, Restaurant Brands International, to court over technical problems related to cash register outages. A lawyer for the GWNFA said that if RBI refuses to meet with franchisees by Friday to discuss the issue, they will take the matter to court. The group wants compensation for the losses, and answers to how the outage happened, what steps could have avoided it and what will be done to ward off future attacks.
Bottom line: The virus, which Tim Hortons has yet to entirely resolve, has caused “partial and complete store closures, franchisees paying employees not to work and lost sales and product spoilages.” Tim Hortons stressed that no customer information was compromised, and that it was working with an external vendor about the outages.