Good morning! Shari Kulha here with the business stories you need to know this morning, to tide you over until budget news takes the main stage this afternoon. The energy industry is calling Ottawa to task again (still), Apple has three new phone models up its sleeve, and the frenzied Vancouver real estate market is pushing out more than just residential buyers.
LOGJAMS WITH NO LUMBERJACKS
Canada’s high-value resources are blockaded from the inside out — and have been for about, oh, 60 years. Peter Tertzakian details how too often, billions of dollars of taxes and royalties are unnecessarily forfeited to foreign interests. Domestic detractors highlight lingering deficiencies, ranging from unresolved energy security, foreign imports into eastern Canada, regulatory drag, and ongoing use of costly third-party transport routes and agents to get oil and gas to market.
Bottom line: If left unchecked, those who gain from our periodic logjams, Tertzakian writes, will be tactical thinkers, mostly from outside, who act opportunistically to find solutions, even if they are suboptimal for the Canadian economy and environment.
Canadian Association of Petroleum Producers yesterday launched a year-long campaign to get Ottawa to move on the pipeline issue, Claudia Cattaneo reports. CAPP issued an urgent call for a course correction after sustaining such heavy damage that energy investors are dumping Canada for Iran and Brazil among other places. It’s that bad, she says.
Quote: “Rising government costs, the burden of inefficient regulation, lack of energy infrastructure, are moving Canadian investment further and further behind,” CAPP CEO Tim McMillan said. “In Canada we need pipelines, not barricades, to supply the world with more energy. The time to build is now.”
AND FURTHER …
A US$200-billion LNG opportunity awaits, but Canada might miss the boat — again. As Geoffrey Morgan reports, the world’s largest LNG trader, Royal Dutch Shell, believes there will be a massive 275-million-tonne supply shortage beginning in 2020. Currently, an investment decision looms for Shell’s proposed plant on Canada’s West Coast. If Ottawa doesn’t approve the request for tax-exempt status for some construction aspects soon, Shell says it may have to postpone or cancel what would have been the largest-ever investment in B.C.’s history.
Quote: “There’s going to be a supply gap, but Canada will not make it if our ability to deliver gas to these markets is substantially more expensive,” LNG Canada director, external relations Susannah Pierce, said yesterday.
APPLE’S X GAMES
Not long after news that the iPhone X wasn’t selling as well as had been hoped, comes word that Apple is planning three new models for launch this fall. It’s hoping consumers will flock to a larger version — a 6.5-inch behemoth — since a major change is about all that will get shoppers converting these days. For its new less expensive model, it may use the lower-end 5C-type body but with some features of higher-end models. And the upgraded X is expected to utilize the A12 processor and be the high-end offering.
Bottom line: In at least some regions, Apple may offer a dual SIM card option for the larger model, allowing people to use their phones in countries with different carrier plans without having to swap out cards. This would be a real bonus for business people who routinely visit multiple countries.
Vancouver’s lack of developable industrial real estate is pushing companies out of the city, Naomi Powell reports. In fact, demand outpaces supply by more than a million square feet a month despite a raft of speculative construction. At 2.3 per cent, the rate of available industrial space is second only to Toronto, where availability is the lowest in North America at 2.2 per cent. Companies looking for warehouse space — many of them want to create distribution centres for products bought online — are starting to look to Alberta, with its cheaper costs and wide-open land.
Quote: “Developers are building on every vacant piece of dirt they own and it’s still not enough,” said Chris MacCauley, SVP of industrial properties at CBRE Group in Vancouver. “I have a lineup of clients looking for four million square feet in the Vancouver market right now. That equates to thousands of jobs and we just can’t find a place for it.”