CALGARY — Suncor Energy Inc. is not interested in selling off its Petro-Canada retail network, the oil giant’s chief executive said Tuesday, in spite of pressure from an aggressive activist investor.
Speaking publicly for the first time since U.S.-based Elliott Investment Management called for changes to Suncor’s board and a review of its executive leadership as well as the possible sale of Petro-Canada, company CEO Mark Little told analysts that the 1,800-location retail chain is a key element of Suncor’s business.
“It’s intertwined with our wholesale and industrial business as well,” Little said during a conference call to discuss the company’s first quarter financial results.
“(Petro-Canada) is a very strong performer and can go head-to-head with other retail businesses … We think we have the best downstream business in North America, and we think it’s important that it stays together.”
The recent proposal by Elliott — a well-known activist investor that holds a 3.4 per cent economic interest in Suncor and which has a track record of targeting large corporations it views as underperformers — had the Calgary-based oil producer on the defensive on Tuesday’s call.
Elliott has been critical of Suncor’s lagging share price as well as a recent spate of operational difficulties and workplace safety incidents, and analysts wanted to know how the company is responding to these concerns.
But Little pointed to Suncor’s first quarter profits of $2.95 billion in the first quarter — up from $821 million in the same period of 2021 — as well as the highest quarterly cash flow in the company’s history as proof that Suncor is on the right track.
“While we still have work to do, I’m pleased to report that we’re making progress and that all parts of Suncor are shifting into high gear,” Little said.
“Our board and management have great confidence in our plan and the progress we’re making.”
On Monday, Suncor declared a quarterly dividend of 47 cents per common share payable June 24 to shareholders of record as of June 3. The company says the dividend is the highest in the company’s history and 12 per cent higher than the previous quarter’s dividend.
The company’s net earnings amounted to $2.06 per common share, compared to 54 cents per common share in the first quarter of last year.
Revenues were $13.5 billion, up from $8.6 billion in the prior quarter.
Suncor reported total upstream production of 766,100 barrels of oil equivalent per day (boe/d) in the first quarter of 2022, compared to 785,900 boe/d in the prior year quarter.
Refinery crude throughput increased to 436,500 barrels per day and refinery utilization was 94 per cent in the first quarter of 2022, compared to 428,400 barrels per day and 92 per cent in the prior year quarter.
This report by The Canadian Press was first published May 10, 2022.
Companies in this story: (TSX:SU)
Amanda Stephenson, The Canadian Press
Calgary man who admitted to participating in terrorism activity to be sentenced
CALGARY — A man who admitted to terrorism-related acts with the militant group Islamic State is to be sentenced today in a Calgary courtroom.
Hussein Borhot, who is 36, has pleaded guilty to one count of participating in terrorism group activity between May 9, 2013, and June 7, 2014, as well as to kidnapping for a terrorist group while in Syria.
RCMP arrested him in July 2020 after a seven-year investigation.
An agreed statement of facts read in court last month said Borhot travelled to Syria through Turkey to join the Islamic State.
The statement said he signed up as a fighter, received substantial training and excelled as a sniper, but did not tell his wife or father before the trip.
Court heard that Borhot revealed much of the information to an undercover officer after he returned to Canada.
This report by The Canadian Press was first published May 26, 2022.
The Canadian Press
Cheese not on the table in Canada-U.K. trade talks as Britain seeks market access
OTTAWA — The British foreign secretary has often been mocked for her preoccupation with cheese. It started eight years ago when Liz Truss expressed outrage in a speech to her party’s annual conference.
“We import two thirds of our cheese,” she raged. “That is a disgrace.”
Now Truss is facing another battle over cheese, this time with Canada.
Britain wants greater access to Canadian markets for more than 700 varieties of cheese including Stilton, Cheshire, and Wensleydale, a crumbly variety originating from Yorkshire.
But Ottawa has made it clear it does not want to see more British cheddar, let alone artisan varieties such as stinking bishop, renegade monk and Hereford hop, on Canadian fridge shelves.
During the first round of negotiations of the U.K.-Canada trade deal, Canada told Britain that a larger quota for British cheese is not on the negotiating table.
When it was a European Union member, Britain was part of the Comprehensive Economic and Trade Agreement with Canada, giving it some access to Canada’s cheese market.
After the U.K. left the EU, a “continuity agreement” with Canada was swiftly put in place to maintain the CETA arrangement until a bilateral trade deal could be struck.
Ralph Goodale, Canada’s high commissioner to the U.K., said if Britain wants more access to Canadian markets for its cheese as part of a bilateral free-trade agreement, it will have to knock on Brussels’ door and get its part of the dairy quota back.
“The point is we have already provided that volume in the EU deal and the British left it there without taking it with them,” he said in an interview. “That’s an issue they need to resolve with the Europeans because the Europeans have their quota.”
Goodale said the U.K.’s request for extra access for British cheese — on top of the access given to the EU — is “what the Canadian negotiators consider to be pretty much a dead end.”
“You are talking about a double concession — one we have already made to the EU and the request is being made by the U.K. for yet another one on top of that,” he said.
The high commissioner said Canada values its trading relationship with the U.K., adding that he is confident that a mutually-beneficial trade deal will be reached.
But if Canada allows the British to export more of their cheese it would involve “a major commitment of compensation to dairy producers” in Canada to make up for lost incomes.
In 2018, after the United States-Mexico-Canada Agreement gave the U.S. fresh access to the Canadian dairy market, Prime Minister Justin Trudeau said he would compensate Canadian dairy farmers.
Canada’s dairy industry was worth over $7 billion in 2020, according to the Canadian Dairy Commission’s annual report.
There are over 10,000 dairy farms in Canada — most of them in Quebec and Ontario — with an average of 92 cows per farm, it said.
Until at least the end of next year, Britain will be able to keep exporting its cheese to Canada under the trade continuity agreement, the U.K.’s trade department said.
This allows U.K. cheese exporters to access the Canadian market tariff-free under the EU portion of Canada’s World Trade Organization cheese tariff rate quota.
As part of the 1995 WTO agreement on agriculture, Canada established tariff rate quotas for cheese and other dairy products. The quotas set out quantities of dairy that could enter Canada with little or no duty.
For Britain, a fully fledged free trade deal with Canada is crucial after Brexit left it looking for fresh tariff-free markets.
“We want to negotiate an ambitious and comprehensive new agreement with Canada that will strengthen our close and historic bilateral trade relationship,” said a U.K. government trade spokesman in a statement, adding the relationship was worth about $34.5 billion in 2021.
In March, U.K. Trade Secretary Anne-Marie Trevelyan flew to Canada to announce with Canada’s Trade Minister Mary Ng that bilateral negotiations had officially begun.
In a speech in the House of Lords in London earlier this month, Goodale reported on progress in the talks, saying that “both sides are optimistic that, as good as CETA and the continuity agreement were, we can do better still when Canada and the U.K. negotiate a deal face-to-face, directly with each other.”
Like Goodale, Ng said Canada is confident a free-trade deal with Britain will be reached, enhancing co-operation in a number of areas, including on renewables, sustainability and the digital economy.
“Canada values the relationship with the United Kingdom. They are … an important trading partner and a trade agreement with the U.K. will be very good for Canadian businesses,” she said in a phone interview from Thailand last weekend.
But she was also firm about the need to protect Canada’s dairy producers, and that means keeping more British cheese out.
“I have been very clear, our government has been very clear, that we will not provide access to our supply-managed sector,” she said. “We have been clear about that from the get-go.”
The Canadian dairy sector now produces 1,450 varieties of cheese, including ewe, goat and buffalo varieties, as well as the cheese curds used in the Québécois dish poutine.
At least half of Canada’s cheese is made in Quebec, which is home to a number of artisan varieties including bleu l’ermite, or blue hermit, and Oka, a popular semi-soft rind cheese.
Pierre Lampron, president of the Dairy Farmers of Canada, has made it clear he will fiercely protect Canadian cheese from British interlopers.
Lampron said he had “validated that the issue of access to the Canadian dairy market was not on the agenda of these trade talks.”
Canada’s protectionist stance toward its dairy industry may have pleased farmers. But it has caused some tension with close allies.
Earlier this month, New Zealand launched a formal trade dispute against Canada, accusing the federal government of breaking promises to give access for dairy imports under the Trans-Pacific Partnership agreement.
The Biden administration also recently said it was asking for a second dispute settlement panel under the U.S.-Mexico-Canada Agreement to review a trade dispute with Canada over dairy import quotas.
This report by The Canadian Press was first published May 26, 2022.
Marie Woolf, The Canadian Press
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