Winnipeg Free Press

Winnipeg Free Press (Newspaper) - February 26, 2025, Winnipeg, Manitoba REGISTER NOW AT JOINTHECHAMBER.CA A visionary leader in Manitoba’s construction industry, John Bockstael has spent nearly five decades not just building structures, but creating opportunities. As the driving force behind Bockstael Construction’s growth, John has helped shape the industry through innovation, advocacy, and a relentless commitment to progress. This is your opportunity to hear firsthand from one of Manitoba’s most influential business leaders. Whether you're an entrepreneur, executive, or industry professional, you won’t want to miss this chance to gain insights, network with peers, and start your morning with inspiration. SERIES SUPPORTED BY: John Bockstael Chairman Bockstael Construction Thursday, March 20 7:30 - 9:30 AM RBC Convention Centre SPONSORED BY: KEYNOTE SPEAKER: EVENT DETAILS: WINNIPEGFREEPRESS.COM ● B7 BUSINESS WEDNESDAY, FEBRUARY 26, 2025 ‘Wake-up call’: RBC report urges agri-food export diversification TORONTO — The Canadian agricul- ture industry needs to expand its inter- national exports to hold its own against U.S. tariffs and global competitors, ac- cording to a new report from RBC. Amid the looming tariff threat, the re- port says Canada’s agriculture and agri- food sector is vulnerable as more than 60 per cent of its exports go to the U.S. It argues Canada has become too reli- ant on the U.S. for those exports, and over the years has become a dominant supplier for American grocery stores. For instance, about 96 per cent of Can- ada’s canola oil went to the U.S. in 2024, while Canada also supplies the vast ma- jority of potash for American farmers. As a result of the growing relation- ship, Canada’s agri-food manufactur- ing sector quietly became the country’s largest source of manufacturing, the report said. Both countries have bene- fited from their strong trading relation- ship. But these advantages are now in jeopardy. Tariffs on agriculture and agri-food products will make Canada a less de- sirable trading partner to the U.S. rela- tive to other low-cost producers such as China and the Netherlands, the report said. “Food and beverage manufac- turing may also struggle to maintain investment levels, as one of its biggest selling features has been its preferential access to the world’s largest market.” On the global stage, Canada is falling behind, with rivals like Brazil and Aus- tralia gaining market share in key mar- kets, the report said. That means there are opportunities for diversification. The report argues Canada should start by taking advantage of its existing free-trade agreements, which provide access to more than two-thirds of the global economy. The next step is tak- ing advantage of new growth markets, including in Southeast and South Asia. India is an opportunity, the report said, in particular for plant-based pro- teins, where Canada can excel with its production of peas, lentils and soybeans. With the right measures, the report says Canada can increase its global share of agri-food exports, adding $44 billion in export value for the sector by 2035. — The Canadian Press Keystone XL redux? Trump says he wants defunct oil pipeline plan back from dead C ALGARY — U.S. President Don- ald Trump says he’d like to see the Keystone XL pipeline brought back from the dead, garnering an en- thusiastic reception from Alberta and Saskatchewan’s premiers but a tepid one from the company spun off from its erstwhile proponent. Trump posted on his Truth Social platform Monday that the Biden ad- ministration had “viciously jettisoned” the pipeline expansion that would have allowed more oilsands crude to flow to the U.S. Gulf Coast, cutting diagonally through Montana, South Dakota and Nebraska before heading south. “The Trump administration is very different — easy approvals, almost im- mediate start! If not them, perhaps an- other pipeline company,” he wrote. “We want the Keystone XL Pipeline built!” Alberta Premier Danielle Smith said Tuesday in an X post she agreed with Trump. “That project should have never been cancelled. Lower fuel costs for Amer- ican families is a big win,” she said. “Let’s also scrap these inflationary tar- iff ideas and focus on getting shovels in the ground right away!” Saskatchewan Premier Scott Moe also voiced his support for the idea on X. “The path to continental energy dom- inance is to increase non-tariff North American trade,” Moe wrote. “This includes the construction of new pipe- lines like Keystone XL.” A spokeswoman for South Bow Corp., the oil pipeline operator spun off from TC Energy Corp. last fall and now the owner of the existing Keystone system, said the company has “moved on” from the XL expansion project. “We continue to engage with cus- tomers to develop options to increase Canadian oil supplies to meet growing demand,” Katie Stavinoha said in an email Tuesday. The Keystone XL project — a 1,900-kilometre pipeline that would have run from Hardisty, Alta., to the major U.S. crude storage hub at Cush- ing, Okla., and then on to Gulf Coast refineries — was first proposed during the Obama administration, which re- jected it on environmental grounds. It was then revived under the first Trump administration, before former president Joe Biden killed it again by revoking the pipeline’s permit on his first day in the White House in 2021. Meanwhile, Trump told a news con- ference Monday tariffs on Canadian and Mexican products are coming next week. Trump’s executive order to hit all Canadian imports with 25 per cent tar- iffs, except a 10 per cent levy on energy, was delayed until March 4 after Canada agreed to introduce new security meas- ures at the border. Richard Masson, executive fellow with the University of Calgary’s School of Public Policy, said the interest in re- suscitating Keystone XL doesn’t jibe with Trump’s plans to ramp up domes- tic oil production while slapping U.S. neighbours with tariffs. “It seems inconsistent to say we’re going to tariff the existing oil that’s coming in and still try and get some- body to build a pipeline,” he said. “It just doesn’t make a lot of sense.” Masson said he suspects Trump is “just really playing to his base,” which is keen on developing oil projects in general. The Canadian government is “open to having a productive conversation” about advancing Keystone XL, the communications director for Natural Resources Minister Jonathan Wilkin- son said in an email. “Canadians have always been a reli- able energy supplier to our American friends — but unjustified tariffs and threats against our sovereignty hurt our ability and desire to be an energy partner to our southern neighbour,” said Joanna Sivasankaran. The Keystone XL project in its cur- rent form has all the Canadian permits it needs and the pieces north of the bor- der remain in the ground, Sivasankaran added. “A private-sector proponent would need to step forward to advance the project, and there is not currently one expressing they would do so,” she said. “Canada wants to see our continent become an energy-secure superpower, and the government is supportive of steps that secure positive outcomes for Canadians.” Masson said he can’t see any com- pany jumping at the chance to propose a pipeline that two U.S. presidents have cancelled. “It’s been a really bitter pill for most people in the industry to swallow and why would anybody want to take that on, unless maybe you had an explicit guarantee from the U.S. that was iron- clad that said if things go south, they’ll pay for it.” Several oil producers would also have to sign up to ship significant volumes on the line for decades, “and there just isn’t that much oil planned to be pro- duced in Canada these days.” Producers could justify oilsands ex- pansions, which require years of lead time and billions in investment, if mar- ket access were guaranteed, Masson added. “That’s not an issue,” he said. “But you’ve got to get the timing of those things right. And right now the level of uncertainty is so high that it seems really difficult to see how that could happen.” — The Canadian Press LAUREN KRUGEL NATI HARNIK / THE ASSOCIATED PRESS FILES A Keystone pipeline pumping station is surrounded by corn fields in rural Milford, Neb. Tariff threats putting chill on business activity but not yet on earnings: banks TORONTO — The threat and uncertainty around tariffs is creating a chill on borrowing and busi- ness activity, said Scotiabank and BMO as they kicked off first-quarter bank earnings Tuesday. The banks both still managed to beat analyst ex- pectations for the quarter ending Jan. 31, thanks in part to a spike in trading revenue from the vola- tility ushered in by the U.S. election. Earnings also weren’t weighed down by the threat of tariffs causing them to set aside more money for potentially bad loans, because they said there’s too little to go on to make those ad- justments yet. “It’s difficult to act on headlines and tweets,” said Scotiabank chief risk officer Phil Thomas on an analyst call. U.S. President Donald Trump said Monday he intends to go ahead with tariffs against Canada on March 4, but he also said he’d implement them in early February. The uncertainty is leading to a slowdown in activity including in areas like investment plans, mergers and acquisitions, and borrowing. BMO chief executive Darryl White said it’s hard to plan ahead when so much has shifted, even since Feb. 1 when Trump imposed tariffs only to pause them just before they were set to be implemented Feb. 4. “It’s frustrating for a lot of people,” said White. “We’re only 24 days into this, and the shelf life of any prediction within those 24 days has been, you know, worth about 24 hours. So it’s difficult to fig- ure out where all this lands.” He said some clients are effectively hitting the pause button on some commercial activity as they wait for clarity. “The anxiety levels are a little bit higher in Canada than they are in the U.S., but that’s not to say there aren’t anxiety levels in the U.S. as well.” It’s something Scotiabank is also seeing, said Thomas. “Whether it’s on the retail side, the cor- porate side, the commercial side, you see a bit of a stasis right now. And so it’s causing people to sort of pause and think about what they’re going to do.” The banks said while they hadn’t yet made sig- nificant adjustments to provisions for credit loss- es from the threat, they have the capital buffers to do so and will respond when firm policies come into place. Scotiabank did add $132 million to its provi- sions from the previous quarter to bring its total to $1.16 billion, with the add in part from its Can- adian banking division and a more cautious con- sumer outlook. BMO’s provisions totalled $1.01 billion, down from the $1.52 billion in the fourth quarter thanks to a drop in its U.S. and capital markets divisions, while its Canadian provisions rose. The banks also have large capital buffers, in- cluding Scotiabank at 12.9 per cent and BMO at 13.6 per cent, well above the regulatory minimum of 11.5 per cent. Both signalled despite the sizable reserves, they’ll be hesitant to ramp up shareholder payouts because of the uncertainty. BMO Financial Group says it earned $2.14 bil- lion in its first quarter, up from $1.29 billion in the same quarter last year, helped by strength in its wealth management and capital markets busi- nesses. Scotiabank reported a net income of $993 mil- lion, down from $2.2 billion last year because of a $1.36 billion charge related to the sale of its busi- ness in Colombia, Costa Rica and Panama. Adjusted, BMO reported earnings of $3.04 per share in its latest quarter, up from an adjusted profit of $2.56 per share a year earlier. Scotiabank’s adjusted earnings worked out to $1.76 per share, up from an adjusted profit of $1.69 per share a year earlier and ahead of ana- lyst expectations of $1.65 per share. — The Canadian Press IAN BICKIS CDPQ to buy Innergex in deal valued at $10B MONTREAL — Quebec pension fund manager CDPQ has signed a $10-billion deal to buy Innergex Renewable Energy Inc. in a bid to leave the “short- term” view of stock market investors behind. Under the agreement, the Caisse de dépôt et placement du Québec will pay $13.75 per share in cash, amounting to a 58 per cent premium on Monday’s closing price. However, the price is less than half the com- pany’s all-time high of over $32 per share in 2021. Innergex’s main shareholder, Hydro-Québec, which approved the transaction, would also sell its stock at a loss — for $214 million less than the prov- incial power utility paid for its 19.9 per cent stake. The Caisse de dépôt et placement said Tuesday it will offer $25 per preferred share, plus accrued and unpaid dividends. The deal values the company at $10 billion, including debt, and requires a green light from shareholders and regulators. The transaction comes at a time when the re- newable energy sector has lost popularity in the wake of a backlash against environmental con- siderations as a focal point for investors in the U.S. “(The Caisse) has a long-term perspective, whereas the markets unfortunately rely on the short term,” said Innergex CEO Michel Letellier in an interview. The Longueuil, Que.-based company, which runs hydroelectric facilities, wind farms, solar farms and energy storage sites, has operations in Canada, the United States, France and Chile. — The Canadian Press ;