Tesla Inc. became the most valuable car company in the world on Wednesday, a day before the electric car maker posted better-than-expected sales numbers.
Tesla announced that it delivered 90,650 vehicles during the quarter, better than the 74,130 vehicles that analysts who cover the company were forecasting.
That’s a decline of about five per cent from the number of cars it sold in the same period a year ago, but investors were impressed with the number because it’s less bad than the rest of the industry. New data on Thursday showed U.S. car sales in June were about 27 per cent below what they were in the same month last year.
Investors bid up Tesla share price to $1,218 a share before markets opened Thursday. That’s an increase of nine per cent.
It was enough to make Tesla the most valuable car company in the world, with the total value of all its shares on the Nasdaq, a figure known as market capitalization, adding up to $207 billion.
That’s more than any other car company and more than Toyota’s $203 billion, which was the previous highest value.
Toyota sold 8,958,423 cars worldwide in its last full quarter. That’s almost 100 times what Tesla says it’s currently cranking out every three months. But Wall Street investors have decided Tesla is the better stock to buy.
Tesla’s current stock price values the company at more than GM, Chrysler and Ford combined, despite those three U.S. automakers selling more cars in two weeks than Tesla does in an entire year.
Regardless of the apparent disconnect between expectations and reality, some in the investment community think the stock has even more room to grow.
Chaim Siegel of Elazar Advisors expects the company’s stock price to rise to $1,545 US in the next year.
“If they are able to accelerate profitability in a quarter missing so many production days, imagine a normal quarter levering more fixed costs,” he said in a note to clients. “Profitability will be even better.”
While a lot of the excitement over Tesla is built on nothing more than hype, the company does have one fundamental factor going for it that is likely to add to the buying. Tesla isn’t a member of the influential S&P 500 collection of stocks.
But analysts expect S&P may soon have to include Tesla because it meets the requirements.
“Stringing together profitable quarters increases their chance for inclusion into the S&P 500,” Siegel said. “That would force many large funds to have to buy.”
Elon Musk asks workers for more
Earlier this week in an internal email, CEO Elon Musk called on employees to work hard to allow Tesla to break even in the quarter despite the coronavirus crisis.
“While our main factory in Fremont was shut down for much of the quarter, we have successfully ramped production back to prior levels,” the automaker said in a statement.
During the period from April to June, most of the United States was under government-imposed stay-at-home orders to combat the spread of the virus, which impacted production and caused a plunge in auto sales.
All five of Canada’s biggest banks are joining an international boycott of Facebook over concerns that the platform is complicit in promoting racism, violence and misinformation.
Scotiabank, RBC, CIBC, BMO and TD have pledged to stop purchasing ads on the site for the month, aligning themselves with brands such as Lululemon Athletica and Mountain Equipment Co-op in signing onto the StopHateForProfit campaign.
The initiative, spearheaded by organizations like the NAACP and the Anti-Defamation League, began in response to growing anti-Semitic and anti-Black rhetoric found on the social media platform.
Participating brands will suspend all advertising on the platform for the month of July.
Scotiabank announced its intentions on Tuesday, while the four other banks confirmed on Wednesday that they would follow suit.
A spokesperson for RBC said the company understands that systemic racism has disadvantaged Black people, Indigenous people and people of colour and the bank intends to combat that.
“One way we can do that is by standing against misinformation and hate speech, which only make systemic racism more pervasive,” AJ Goodman said.
Facebook has come under fire in recent months for what critics say is indifference when it comes to policing their platform for individuals and groups espousing hateful ideology.
They’ve also been criticized for a lack of action on disinformation.
For instance, last month, U.S. President Donald Trump posted a doctored video featuring fake CNN footage on both his Twitter and Facebook accounts, in which a CNN logo appears over footage of a Black toddler running away from a white toddler.
The footage is then followed by another clip from a different angle — this time without the CNN watermark — in which it becomes clear the two toddlers are friends.
The parents of the two toddlers later told ABC News that they were “appalled” and “disgusted” by the video.
Initially, only Twitter flagged the video as misleading, with Facebook resisting public pressure to enforce their own labelling system.
However, after numerous brands began pulling advertising from the platform, the company reversed its decision at the end of June and began taking down some political posts deemed to be fake or misleading.
Criticism against Facebook has come from inside the company as well.
At the beginning of June — shortly after Trump threatened via social media to order the military to shoot anti-racism protesters — hundreds of Facebook employees staged a virtual walkout to protest the company’s refusal to label the post as hate speech.
A spokesperson for Facebook noted that the company has suspended more than 250 white supremacist groups from the platform, but did not specifically comment on the boycott.
More recently, the advocacy group Friends of Canadian Broadcasting called on the federal government to stop hosting its virtual Canada Day celebration on Facebook.
But Prime Minister Justin Trudeau’s Wednesday address to Canadians went ahead on the platform — along with YouTube, CBC, CPAC and Radio-Canada.
Stocks are drifting higher in midday trading on Wall Street, putting the market on track for its third gain in a row.
The S&P 500 was up 0.5 per cent on Wednesday, coming off the heels of a whiplash start to the year where its worst quarterly performance since 2008 gave way to its best quarter since 1998. Treasury yields and the price of oil also ticked higher following encouraging reports on the U.S. economy.
But stocks in Europe and Asia were mixed after reports underscored the fragility of the recovery as COVID-19 cases continue to mount in hot spots around the world. Canadian markets are closed because of Canada Day.
The Dow Jones Industrial Average was up 17 points, or 0.1 per cent, at 25,830, as of 12:06 p.m. ET, after earlier drifting between a gain of 206 points and a loss of 99 points. The Nasdaq composite was up 0.8 per cent.
FedEx jumped 13.6 per cent for the biggest gain in the S&P 500 after it reported better results for the latest quarter than Wall Street expected. A boom in online shopping helped drive revenue for FedEx’s ground-delivery business.
Constellation Brands, which sells Corona beer, rose 7.7 per cent after it also reported stronger quarterly results than analysts had forecast. Underlining how much uncertainty is ahead, though, it joined the long list of companies that are declining to give forecasts.
Pfizer rose 4.3 per cent after it and German biotech company BioNTech announced encouraging, preliminary data on their COVID-19 vaccine candidate.
Markets around the world roared back last quarter on hopes that economies are beginning to pull out of the severe, sudden recession that struck after governments shut down businesses in hopes of slowing the spread of the coronavirus. But a recent resurgence of COVID-19 cases, particularly in the U.S. South and West, has raised doubts about whether those hopes were premature or overdone.
In the United States, a report said that the manufacturing sector returned to growth last month, a much better reading than the slight contraction that economists were expecting.
Data pointing in right direction
Earlier, a separate report that suggested private employers hired more workers than they cut in June. Payroll processor ADP also revised its previously reported numbers for May, saying that private employers actually added nearly 3.1 million jobs that month instead of cutting 2.8 million.
But the June growth in ADP’s payroll report wasn’t as strong as economists expected. The U.S. government’s more comprehensive monthly jobs report will arrive Thursday.
In the world’s third-largest economy, a quarterly Bank of Japan survey showed manufacturers’ sentiment plunged to its lowest level in more than a decade, as the pandemic crushes exports and tourism.
But in the world’s second-largest economy, a separate survey showed China’s manufacturing activity improved in June, adding to signs of a gradual recovery. A similar survey for the 19-country eurozone showed an improvement in manufacturing in June, with the industry almost growing again after widespread shutdowns.
Analysts said that while the data pointed in the right direction, it shows that an economic recovery from the pandemic will be slow.
In Asia, Japan’s Nikkei 225 slipped 0.7 per cent, South Korea’s Kospi dipped 0.1 per cent and stocks in Shanghai rose 1.4 per cent. In Europe, France’s CAC 40 was down 0.2 per cent and Germany’s DAX lost 0.4 per cent. The FTSE 100 in London was down 0.2 per cent.
The yield on the 10-year Treasury rose to 0.67 per cent from 0.65 per cent late Tuesday. It tends to move with investors’ expectations for the economy and inflation.
A barrel of U.S. crude oil rose 1 per cent to $39.68 US. Brent crude, the international standard, rose 1.5 per cent to $41.89.
As Canada’s two largest airlines move to end so-called seat distancing, travellers have mixed feelings about stepping on board an aircraft in the age of COVID-19.
Starting on Canada Day, Air Canada and WestJet will resume the sale of adjacent seats, which they had largely blocked to help prevent viral spread.
Canada’s public health officer has expressed reservations about the practice, though it is permitted under federal transportation rules.
“We really feel it is important to avoid the close physical contact as much as possible. And if not, wear the medical mask,” Dr. Theresa Tam said Monday. Masks or face coverings have been mandatory on flights since April 20.
Even so, “there are some difficult decisions for travellers, for sure,” Tam added, saying individuals should assess their own risk levels and need to fly.
WATCH | Tam questioned about airlines ending physical distancing in cabins:
Dr Theresa Tam, Canada’s chief public health officer, spoke with the CBC’s Ashley Burke on Monday. 2:13
Karen Kabiri took his first plane trip in five years on Monday after learning his mother had died in Iran the day before — just 20 days after his father.
“It’s very, very hard for us. That’s why I’m going there right now, to help my sister,” said Kabiri, 44.
The piano teacher from Toronto, who stopped over in Montreal before continuing on to Tehran via Qatar to help with funeral arrangements, spent several hours outside the terminal at Trudeau airport with his other sister, who lives in the area but could not make the trip. Enduring a light drizzle, the siblings adhered to Transport Canada rules that prevent anyone but staff and passengers from entering airports.
Kabiri said he had concerns about stepping into a packed cabin, though he credited Air Canada for providing all passengers with a mask, gloves, disinfectant wipes and a water bottle.
“It’s a little bit scary for everybody. You can see many people are affected by COVID-19,” he said. “It’s very hard for everybody in these situations to travel. But sometimes an emergency is happening.”
Claire Parois and her five-year-old daughter climbed aboard a Monday flight bound for her home country of France to join her parents after receiving approval to continue telecommuting until late August.
“We decided to spend the rest of the summer at my parents’ house where I don’t have to do the full-time parenting and full-time working at the same time, which I’ve been doing in the past 15 or 16 weeks,” said Parois, who works for the United Nations in Montreal. “It’s been really, really, really challenging.
“My main concern would be to get infected and then infect my parents. Otherwise I’m not too worried,” she said.
With Canada’s border still closed to nearly all non-residents, international travel has barely budged since dropping by more than 95 per cent year over year in April.
However, domestic travel is expected to edge up in the coming weeks and months as interprovincial restrictions loosen and the economy continues to reopen.
Anthony Morgan, who works on a Great Lakes bulk carrier, said he has a harder time with pandemic protocols on the water than in the sky. Until Monday, the 39-year-old wheelsman hadn’t stepped off the boat in three months.
“It’s like almost pulling your head off and bootin’ it over the side,” he said of being confined to the freighter.
“But flying home I definitely don’t feel like I got any concerns.”
Morgan took off Monday for St. John’s and plans to spend his month of downtime close to home in his outport community near the provincial capital. That includes two weeks of self-isolation after landing.
The sudden return of middle-seat sales is not unique to Canadian carriers.
Michelline Nesrallah said there was no distancing on her packed Qatar Airways flight back to Canada.
“There was no temperature screening when we got into the Qatari airport,” added the 39-year-old teacher who moved back to Ottawa this week after spending most of the past 14 years in the Gulf state.
“People aren’t really taking it as seriously as they should,” she said. “I was standing at the baggage counter and this woman was literally touching me with her arm. And I said, ‘Sister, you have to stand back.'”
Transport Canada listed physical distancing among the “key points” in preventing the spread of the virus, part of a guide it issued to the aviation industry in April.
“Operators should develop guidance for spacing passengers aboard aircraft when possible to optimize social distancing,” the document states.
Some health experts have highlighted the risks of spreading COVID in crowded airports and sardine-tin cabins.
“Once it’s in the cabin, it’s difficult to stop air moving around,” Tim Sly, an epidemiologist and professor emeritus at Ryerson University’s School of Public Health, said in a recent interview.
However Joseph Allen, director of the Harvard public health school’s Healthy Buildings program, has said the HEPA air filters used on most planes effectively control airborne bacteria and viruses.
In line with federal directives, Air Canada and WestJet conduct pre-boarding temperature checks and require masks on board.
Both airlines also implemented enhanced aircraft cleaning and scaled back their in-flight service in late March, cutting out hot drinks, hot meals and fresh food.
Air Canada is indefinitely suspending 30 domestic regional routes and closing eight stations at regional airports across Canada because of an unprecedented drop in demand for air travel as a result of COVID-19.
The Montreal-based airline said Tuesday the cuts are being made because of continuing weak demand for both business and leisure travel because of COVID-19 travel restrictions and border closures.
The routes being cancelled are:
In Atlantic Canada: Deer Lake-Goose Bay, Deer Lake-St. John’s, Fredericton-Halifax, Fredericton-Ottawa, Moncton-Halifax, Saint John-Halifax, Charlottetown-Halifax, Moncton-Ottawa, Gander-Goose Bay, Gander-St. John’s, Bathurst-Montreal, Wabush-Goose Bay, Wabush-Sept-Iles, Goose Bay-St. John’s.
In Quebec: Baie Comeau-Montreal, Baie Comeau-Mont Joli, Gaspé-Iles de la Madeleine, Gaspé-Quebec City, Sept-Iles-Quebec City, Val d’Or-Montreal, Mont Joli-Montreal, Rouyn-Noranda-Val d’Or.
In Ontario: Kingston-Toronto, London-Ottawa, North Bay-Toronto, Windsor-Montreal.
In Western Canada: Regina-Winnipeg, Regina-Saskatoon, Regina-Ottawa, Saskatoon-Ottawa.
The regional airports where Air Canada is closing its stations include:
Baie Comeau, Que.
Mont Joli, Que.
Val d’Or, Que.
North Bay, Ont.
More than two-thirds of the routes being cancelled and all eight of the regional stations are operated by Jazz Aviation, a partner of Air Canada.
“I am saddened by the impact today’s announcement will have on our employees, suppliers and the affected communities, but respect and understand the difficult choice our partner, Air Canada, has had to make,” said Joe Randell, CEO of Chorus Aviation, which owns and operates Jazz.
Other changes possible
Air Canada said it expects the airline industry will not recover from the damage incurred by the coronavirus pandemic for three years at least, and makes it clear that Tuesday’s route cancellations may not be the end of any drastic steps that may have to be taken.
“Other changes to … network and schedule, as well as further service suspensions, will be considered over the coming weeks as the airline takes steps to decisively reduce its overall cost structure and cash burn rate,” the airline said.
Business professor Ian Lee, of the Sprott School of Business at Carleton University in Ottawa, says the move shows just how bad the outlook is for airlines right now.
“It’s a recognition that they’re in dire straits,” he said in an interview. “The borders are still closed to the United States — which, of course, is an enormous market. And their secondary market, which is Europe, is also closed.”
A major blow to Atlantic Canada
“This announcement today is going to be devastating to those smaller communities across Canada, and I think there’s more cuts to come,” Lee said.
Monette Pasher, executive director of the Atlantic Canada Airports Association, agrees with that assessment. “It’s a real step backwards in terms of connecting our region to the world, and we’re disappointed about that but certainly understand the position,” she said in an interview.
Air Canada said system-wide capacity was down about 85 per cent in the second quarter compared with the same quarter last year, and the airline expects capacity in the third quarter to be down 75 per cent compared with the third quarter of 2019.
The airline lost more than $1 billion in the first quarter, and burned through $688 million in cash in March alone.
“You don’t need to be a strategist in a business school or an accountant to understand if you’re burning $22 million a day and you’ve a very negligible revenue flowing in, you are a prime candidate for bankruptcy,” Lee said.
Cirque du Soleil, one of Quebec’s most internationally recognizable brands, filed for bankruptcy protection on Monday following months of meagre revenues because of the COVID-19 pandemic.
A group of existing investors, with backing from the Quebec government’s investment wing, Investissement Québec, has already tabled a bid to take over the company, inject $300 million US and provide financial support for 3,500 laid-off workers.
The involvement of Investissement Québec, in the form of $200 million US in debt financing, requires the investors to commit to keeping the company’s headquarters in Montreal.
In statement made early Monday afternoon, Cirque du Soleil said Quebec Superior Court will hear its application for bankruptcy protection tomorrow. If granted, the company said it will also seek bankruptcy protection in the United States.
The circus company was forced to cancel dozens of productions around the world since March, when public health guidelines began barring live entertainment events.
“For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization,” president and CEO Daniel Lamarre said in the statement released Monday.
“However, with zero revenues since the forced closure of all of our shows due to COVID-19, management had to act decisively to protect the company’s future.”
Heavily indebted before pandemic
Even before the pandemic struck, Cirque du Soleil was heavily indebted following a string of major acquisitions aimed at diversifying its business operations beyond the lavish live spectacles it’s known for around the world.
It was estimated the company owed creditors around $900 million US, meaning they had effective control of the company.
The current Quebec government, headed by a nationalist centre-right party, came to power on a pledge to do more to prevent foreign takeovers of the province’s marquee brands.
In May, as the Cirque’s financial position looked increasingly shaky, Economy Minister Pierre Fitzgibbon expressed concerns about the possibility of creditors seeking liquidity.
He said Investissement Québec would back a recapitalization plan by the circus company’s three major shareholders: Texas-based TPG Capital, Chinese firm Fosun and Quebec pension fund manager the Caisse de depot et placement.
That money, he said at the time, was incumbent on the investors meeting a number of political requirements, in addition to the pledge to keep the head office in Montreal.
Under the terms of the deal, the investors are also committing to maintaining key company leadership positions in Quebec and rehiring as many Quebec-based workers as possible. These are on top of financial commitments that include:
$15 million US in financial help for laid-off workers.
$5 million US to settle outstanding contracts (especially Quebec-based contractors).
Refunds for shows cancelled because of the pandemic.
The bid by the existing investors is what’s known as a stalking horse agreement, meaning it sets a minimum price and sale conditions for the company.
Other interested parties have 45 days to table competing offers, a process that will be supervised by the court.
Lamarre told Radio-Canada five other groups have expressed interest in the company. They too would benefit from Investissement Québec’s financing, if they agree to its conditions, Fitzgibbon said.
The list of other potential investors is likely to include the company’s co-founder and former CEO, Guy Laliberté, who sold his controlling stake back in 2015 for a reported $1.5 billion US.
Laliberté has publicly stated his interest in once again having an ownership share.
Bankrupt U.S. shale pioneer Chesapeake Energy on Monday laid out its long-term plans and detailed dramatically reduced drilling through the end of the year, with half the rigs as it had to start 2020. Chesapeake on Sunday became the largest U.S. oil and gas producer to seek bankruptcy protection in recent years as it bowed to heavy debt and the impact of the coronavirus outbreak on energy markets.
The company said it aims to run a rig program of six to eight rigs for the next two years, and seven to eight rigs between 2022 and 2024, a regulatory filing showed. It did not specify what proportion was oil or gas rigs.
Chesapeake was operating 15 rigs on average in the fourth quarter last year before the coronavirus pandemic sapped fuel demand and roiled the energy markets. Last quarter, its rig count edged down to 14 rigs.
The filing also showed Chesapeake’s plans to operate an average of just six rigs between Appalachia and the Gulf Coast in the third and fourth quarters, compared with 14 across several U.S. fields in the first quarter. Its second-quarter average is estimated at seven rigs, with 36 gross wells drilled.
The producer, which spent heavily to become the top U.S. producer of natural gas at one point, is still the No. 2 shale gas producer behind EQT Corp, according to data provider Enverus.
One of Chesapeake’s pipeline providers, Crestwood Equity Partners LP, said on Monday it does not expect a financial hit from the bankruptcy – Chesapeake is current on outstanding invoices and additional cash flow protection is in place though letters of credit. Crestwood gathers and processes Chesapeake’s natural gas and liquids in the Powder River Basin and Marcellus fields.
Tony Monize was tired of waiting to be called back to work.
The Toronto man had been temporarily laid off from his job in the telecom industry when the COVID-19 crisis hit, so when he saw a job posting on LinkedIn on June 20 for a key account coordinator at Sobeys, he decided to apply.
“I want to work,” said Monize, 54. “Sitting at home and doing little projects, it doesn’t doesn’t do well for me. I wasn’t brought up that way.”
Monize completed an application on the LinkedIn site, and two hours later was on the phone with a man who identified himself as a human resources manager at Sobeys’ head office.
“He had a few more questions, like, if I was employed, my history on my resumé,” Monize said. “He said, ‘We’re still talking to a few more applicants, we’ll get back to you.'”
After another conversation with a different interviewer later that day, Monize was offered the position. First thing Monday morning, he resigned from the telecom job he’d held for three years.
But within 24 hours, he discovered the new job offer was part of a scam.
On Tuesday, Monize was asked to send almost $4,000 to another company to pay for home office equipment. He agreed to e-transfer the funds, because he’d received a cheque with the Sobeys logo to cover the cost.
WATCH | Tony Monize explains how he ended up applying for and getting a job that didn’t exist:
Tony Monize explains how he ended up applying for and getting a job that didn’t exist. 1:46
Then his bank called.
“They said, just so you know, we looked at those email addresses where you’re sending money. They’re on the blacklist. It’s fraud.'”
And the cheque he’d received? It was counterfeit.
COVID an opportunity for scammers
Employment scams are on the rise in Canada. As of May 31, the Canadian Anti-Fraud Centre had received close to 2,000 reports about job scams. That’s more than in all of 2019, when there were 1,757 reports.
The centre says the 2019 cases represented $3.2 million in reported losses. There’s been no tally yet of the losses in 2020.
“It’s definitely something we’ve been tracking since the COVID-19 pandemic has happened,” said Jeff Thomson, a senior RCMP intelligence officer with the Anti-Fraud Centre. “A lot of people are out of work, they will be looking for work and it’s ripe for fraud right now.”
More than three million Canadians lost their jobs in March and April of this year, as businesses closed or suspended operations due to the pandemic. Statistics Canada has described it as the fastest decline in employment in the country’s history.
Thomson said fraudsters see this as an opportunity to switch tactics and dupe those eager for work. They use sophisticated techniques in order to create fake websites and use counterfeit financial instruments, such as bogus cheques.
He said another tactic is “caller ID spoofing,” in which the caller will “use an area code that’s in the same jurisdiction as the victim, because people are more likely to answer the phone if a call comes from their own jurisdiction.”
Scammers in Canada
Monize said the calls he got from the people posing as Sobeys managers came from the 902 area code, which is the same code as the company’s head office in Stellarton, N.S.
Monize also noted that “the man I spoke to had a South African accent.”
Insp. Peter Callaghan, commander of the financial crimes unit of the Toronto Police, said not all fraudsters are offshore.
“I’d like to reassure people and tell them scammers are in some faraway place,” said Callaghan, “But the reality is they’re here as well. They’re all across Canada.”
The financial crimes unit works with other agencies here and in the U.S. to shut down teams of operators, but Callaghan said they typically “pop up” again with a new scheme in another location.
Sobeys is hardly the only company to be used as bait. “I would say that if you can think of a major corporation, their name has been used at one time or another,” said Callaghan.
In an emailed statement to CBC News, Sobeys acknowledged it is aware of “fake Sobeys career websites.”
“We are working hard to stop this fraudulent online activity,” the statement reads, emphasizing, “All of our current career opportunities can be found at https://jobs.sobeyscareers.com/.”
Monize believes the company should be making more of an effort to let Canadians know about the scam. He also blames LinkedIn.
“LinkedIn didn’t do a background check on the company that I submitted the application to,” he said.
The online network says it has monitoring tools to help prevent fraudulent job postings, and is “constantly evaluating” its policies.
“When this job posting was brought to our attention, we immediately removed it from LinkedIn, as it violates our Terms of Service,” says a LinkedIn statement sent to CBC News.
‘Recognize, reject, report’
Thomson at the Canadian Anti-Fraud Centre said it’s important to try and authenticate job offers. “You might want to reach out to the companies directly, to research the employer that you’re looking to get hired by and do your diligence to make sure everything’s OK.”
He also encourages Canadians to notify the centre of any cases of fraud. “We always say, ‘Recognize, reject, report.'”
Tony Monize has reported his case, saying it was yet another challenge in a hard year for him. He lost his wife to cancer in January.
“This latest situation touches me a little bit more because of what I’ve been through,” he said.
He’s thankful he didn’t lose any money to the scam, but he has had to change his bank account and driver’s licence after sending that information to the fraudsters.
“I didn’t send my social insurance number,” Monize said. “I’m smarter than that.”
In the meantime, he’s been in touch with his former employer about getting his old job back. Most staff at the firm are still laid off, but Monize is eager to return to work as soon as possible.
“I talked to HR to say I wanted to recant my resignation,” he said. “And they said, ‘Just hang in there, we’ll work something out.’ So that was positive. It just goes to show: Don’t burn your bridges.”
As Alberta, British Columbia and Saskatchewan dole out $1.5 billion in federal funding to reclaim inactive oil and gas wells, Indigenous leaders are concerned none of the cash will be spent cleaning up their land.
The federal government announced the program as part of its aid package to the oilpatch, designed to stimulate work for the oilfield service sector while reducing the environmental risk from aging infrastructure.
The three provincial governments have already started dispersing the money, but so far none of it has been directed toward remediating wells on First Nations land, said Stephen Buffalo, president of the Indian Resource Council, which represents more than 100 First Nations with oil and gas reserves.
“We have been here before where we were told that things will be taken care of. Right now, we’re in working committees [with government officials]. Meanwhile, these funds are being flowed out,” Buffalo said.
“I don’t think some of our members are satisfied with how the process is going.”
The federal money was divided between B.C. ($120 million), Alberta ($1 billion) and Saskatchewan ($400 million). Another $200 million from Ottawa to Alberta’s Orphan Well Association is to be repaid.
As of June 19, the Alberta government had approved $40 million to more than 102 companies.
The government spending is proving popular with industry. For example, the first phase of Alberta’s program gives companies up to $30,000 to clean up wells. Within the first month of the program’s launch on May 1, about 3,000 companies had already applied to remediate close to 37,000 wells.
The IRC is asking that each province allocate 10 per cent of the federal money it receives to First Nations, which would represent about $150 million.
So far, only British Columbia has signalled a willingness to set aside funding specifically for First Nations. “The second increment of $50 million may include a specific allocation for Indigenous contractors,” said a letter from the province to the IRC earlier this month.
In an emailed statement, Saskatchewan government spokesperson Ashley Schoff said Indigenous businesses, communities and peoples will benefit appropriately from all phases of the well cleanup program. The government is working on its engagement process and intends to reach out to Indigenous groups in the “coming days and weeks,” she said. Is there a specific allocation?
The Alberta government also did not commit to a specific allocation, but spokesperson Kavi Bal said in an emailed statement that “the necessary supports are in place to build broad Indigenous community participation.”
WATCH | Stephen Buffalo on the opportunity to clean up inactive wells:
The CEO of the Indian Resource Council doesn’t want First Nations to miss out on the opportunity to remediate inactive oil and gas wells. 1:22
Buffalo said discussions are taking place with all three provinces. But he said what First Nations really need is a firm commitment.
“I’m just hoping that we don’t fall through the cracks,” he said. “Not everyone feels confident with the process that we’re going through right now.”
Buffalo said the primary concern is to clean up the wells to ensure there aren’t any leaks that could contaminate First Nations land. The spending could also provide jobs in communities and activity for Indigenous-owned oilfield service companies.
There are at least 900 wells on First Nations land that would qualify for the federal funding, said Chief Roy Fox of the Blood Tribe in southwest Alberta. In a letter to federal Indigenous Services Minister Marc Miller this month, he said that he is afraid little if any of the money will go toward cleaning up wells on Indigenous territory.
Indian Oil and Gas Canada, the federal agency that manages resource development on First Nations lands, is encouraging the three provinces to ensure that some of the money from Ottawa is allocated to Indigenous groups.
“This will boost employment opportunities for community members and promote their general well-being, specially in such unprecedented times,” Strater Crowfoot, the agency’s CEO, wrote in separate letters to the three provincial governments.
Marketplace tests popular skin creams sold in Canada to find out if the ingredients are as toxic as the marketing. 22:31
Unilever drops ‘Fair & Lovely’ name — but not the product
Unilever is making big headlines this week for removing the words “fairness,” “whitening” and “lightening” from its products, which include Fair & Lovely — an extremely popular cream, especially in the South Asian community.
Air Canada now says some passengers entitled to refunds
The company has quietly changed its refund policy to allow some customers whose flights were cancelled due to the COVID-19 pandemic to recoup their cash — but not passengers whose trips originated in Canada.
Customers with flights originating in the European Union, Switzerland and Iceland are now “entitled to receive a refund” due to the pandemic, states a document posted to Air Canada’s website on June 15.
Many Canadians have expressed frustration at Air Canada’s decision to offer credits instead of refunds for a majority of COVID-related flight cancellations. Read more about the policy change.
Declining cash use is hurting society’s most vulnerable
As more businesses ban or recommend against paying with cash, people whose livelihoods depend on it are struggling. That includes many people who live and work on the street, like panhandlers, street musicians and performers — many of whom are paid with cash and don’t use bank accounts or credit cards. “It’s going to again marginalize and exclude them from civil society,” said Jeff Karabanow, a social work professor at Dalhousie University in Halifax. Read more about cash use during the pandemic.
Could a 4-day work week become the new normal?
COVID-19 has changed the way we work already, but will it change the work week, too? Some businesses are considering adopting a shorter week, arguing that employees are more productive when they work less. The Nova Scotia community of Guysborough has already adopted a four-day week, and so far, so good. Read more about how the town is faring.
CBC is developing a new show for a youth audience. We’re looking for tweens and teens to help us shape it. If you know any young adults between the ages of 11 and 14 who want to have their say, email email@example.com to find out how you can participate!