CALGARY (CP) — Russia has agreed to open its borders to imports of boneless Canadian beef from animals of any age, provided the cattle can be proven free of contact with mad cow disease. The move was announced late Wednesday by the Canada Beef Export Federation, which says it received notification from the Canadian Food Inspection Agency. ‘‘Russia is the first country that has clearly moved independently from the U.S. in stating what their expectations are for animals over 30 months of age,’’ said Ten Haney, president of the export federation. Boneless beef from animals 30 months of age or less, which are believed too young to develop the disease, must be certified to come from animals born and raised in Canada. They must originate from farms which have never recorded a case of bovine spongiform encephalopathy, commonly known as BSE. Animals over 30 months of age must be tested and found free of BSE. Haney said the testing costs could be between $25 and $100 per animal and could depend on the scale of testing. It’s not known if the tests would have to be done by federal food inspectors. Any Canadian slaughterhouses and meat-packing plants exporting to Russia must be pre-approved by the Russian veterinary authority. Haney expects that process to take about six weeks. Canada’s beef industry has lost more than $1 billion exports alone since May 20, when it was learned a lone Alberta cow had been infected with BSE. Thirty-four countries banned Canadian beef in the days following the announcement and live cattle imports remain banned in all international markets. The infected cow never made it into the human food chain. The United States and Mexico have recently agreed to allow imports of some boneless cuts from animals under 30 months of age, which are believed too young to develop the disease. Other countries are expected to follow suit in the coming days, including Jamaica and Trinidad and Tobago. Foreign Affairs spokesman Andre LeMay could not immediately confirm a deal had been signed with Russia. Prior to the mad cow crisis, Russia was a tiny customer for Canadian beef products, importing about $2 million a year in liver. But Haney said that may change. ‘‘While Russia has not been a key export market for Canada to date, suppliers from South America and Europe have exported over 600,000 metric tonnes to Russia annually,’’ Haney said.
A strong home-building market through Central Alberta is spurring Laebon Homes to construct a $2 million office and warehouse in Red Deer County. The Red-Deer based builder will triple its office and warehouse space from its current headquarters in downtown Red Deer. President Gord Bontje acknowledged the move is a sign of favourable economic times in the region. “Our business has grown dramatically over the last number of years,” Bontje said Monday, “and we’re operating in far too cramped quarters already. We’ve needed the space for some years.” Last week, the county’s municipal planning commission approved the 600 square metre (6,455 square feet) office and a separate 1,115 square metre (12,000 sq. ft.) warehouse. Laebon Homes will initially build the warehouse that size, but could expand it to 3,240 square metres (36,000 sq. ft.) The development will be located adjacent Hwy 2, immediately west of Red Deer on 67th St. in the Burnt Lake Business Park. The lot will include several trees and 58 oversized parking stalls and two barrier-free stalls. Gayle Wood, designer for Laebon Homes, said the project is similar to what some Calgary builders have done. “With the office building, we’ll have a showroom of construction materials that people can choose from,” Wood said. Wood said the warehouse will store construction materials such as lumber, windows and doors. Tradespeople will be able to work inside the bays. “Initially, we are just building two bays, but if we have enough interest, we’ll have four more,” she said. “Most of our trades are independent and have places to work out of, but all of our warranty staff don’t. Some of the finishing stuff we might do inside, rather than outside.” The reason for choosing to locate in the county was simple enough. “We liked the location,” Bontje said. The stucco and stone-accented office will be highly visible off of Hwy 2. “It’s a large home plan,” Bontje said. “It will have a very homey look.” Bontje added being situated in the county isn’t an indication they’re gearing up for more projects there. He said they build homes already in the county, along with several communities — Ponoka, Didsbury, Sundre, Rocky Mountain House and Stettler. “We’ve always done a lot of homes around Central Alberta. Half our homes are built in the city and half in those other areas.” Plans are to get digging as soon as all the permits are completed, hopefully in February. Bontje said the project could be finished by the end of July.
A national trend towards bigger and better houses is boosting average home prices in Red Deer. A Century 21 Canada National Housing Market Outlook based on national Multiple Listing Service statistics shows average house prices in 21 communities across Canada have climbed 16 per cent to $163,682 in October from $141,438 in October 1999. Margaret Anderson, with Red Deers Century 21 Lesand Advantage, said locally the average house price climbed to $180,994 from $149,684 over three years a 20.9 per cent increase. Anderson said that doesnt mean every home in Red Deer is worth nearly 21 per cent more than it was three years ago. A typical home has risen in value about three per cent a year. What the statistics show is an increase in the number of higher-end homes sold in Red Deer. Its especially visible when you drive through the new subdivisions, she said. For instance, six homes were sold locally worth $200,000 to $300,000 in October 1999. The past October, 18 buyers picked up the keys for homes in that price range. Persistently low interest rates are a key reason for the popularity of larger homes across the country, she said. A three-year mortgage is at about 5.13 per cent now compared with about eight per cent in the fall of 1999. People can afford more house than they did before. Two-income families and the general economic prosperity of the area are other factors, she said. It is not uncommon to see 2,000-square-foot homes with all the bells and whistles, including pre-wired and specially insulated entertainment rooms, energy-efficient windows, higher quality finishing and other features. Red Deers statistics are similar to those recorded in the provinces two largest cities. Calgarys average house prices have climbed 19 per cent to $201,316 from $169,068. Edmontons average price is up 25 per cent to $150,397 from $120,027. The highest price increase occurred in Ottawa where house prices climbed 38 per cent to $200,840 from $145,121. Thunder Bay, Ont., was the only community that saw average house prices fall. An average house cost $114,714 in October 1999 compared with $94,467 last October, an 18 per cent drop.
More computers than paper are expected to be dropped off today at the Rimbey Paper Recycling Depot. The town is the first in Alberta to hold a municipal e-waste round-up of old computers, televisions, and other electronics. Free drop-offs are being encouraged at the paper depot from 10:30 a.m. to 3 p.m. Mayor Dale Barr said his town is taking the lead in electronics recycling to show the provincial government that this kind of effort is needed throughout Alberta. E-waste is the fastest growing waste stream in Canada, said Barr, who fears landfills will quickly fill up with old computer monitors and obsolete VCRs. Besides causing congestion, Barr worries about dangerous chemicals from electronics leaching into soil and ground water. Almost two kilograms of lead and some phosphorus are contained in the average computer monitor, and large television screens hold more. Barr notes 500 million computers are expected to be disposed of in North America over the next five years. We need to legislate this waste out of our landfills. Electronic equipment rounded up today will be recycled for free by MAXUS Technology Inc., a private Calgary-based firm with a drop-off facility in Rimbey. Town residents who miss bringing in their computers and TVs can drop them off at MAXUSs recycling site later on for a fee. The company charges $10 for each computer monitor and $15 for each TV. The fee is needed because of the specialized work done to remove lead and phosphorus from the old equipment, said Clayton Miller, MAXUSs communication co-ordinator. Phosphorus is washed off and held for a future use the company is still working on, said Miller, while leaded glass is sent for reuse to manufacturers of new monitors and televisions. Other electronics components are recycled for plastic or metal content. Computers that are in better condition are reconditioned and sold to wholesale to retailers, he added. MAXUS officials hope e-waste recycling catches on and the Rimbey facility ends up taking in old equipment from all over Central Alberta including corporate waste. We need to recognize that landfilling is not the way to go about this, said Miller.
EDMONTON (CP) A Canadian compromise on greenhouse gas reductions is needed to save some oilsands projects, oil company executives told a conference Thursday. There are enough cooks in the kitchen that Im sure well find a solution, said Mike Ashar, Suncor Energys executive vice-president of oilsands. But, Ashar warned, if, at the end of the day, the entire problem is on the back of the oilsands industry, that is not sustainable. Executives from nine companies outlined their oilsands plans before 185 financial experts, academics, engineers and government officials in a one-day conference organized by the Edmonton Society of Financial Analysts. Canadian Natural Resources Ltd. has an $8-billion project before provincial regulators. It would include a mine and upgrader. Engineering studies are continuing without delay, said CNRL vice-president Real Doucet. The big question for us is not whether the project is going to go, he said. The big question is whether (the upgrader) is going to be built in Fort McMurray or the U.S. The United States has said it will not ratify the Kyoto accord, which calls on signatories to reduce greenhouse gas emissions to six per cent below 1990 levels. Petro-Canada oilsands vice-president Brant Sangster suggested that reasonable minds will prevail on Kyoto in time for board of directors approval of an $600-million oilsands project called Meadow Creek, and the conversion of the Strathcona refinery near Edmonton to handle heavy oil. We have not slowed down, Sangster said. But then he added: We will want to get a level of Kyoto certainty before we absolutely commit to it. Meanwhile, Syncrude Canadas seven corporate owners have balked at approving an extra $500 million for the oilsands companys new $5-billion upgrader. What weve done is ask Syncrude to go back and find offsets, Sangster said. On Sept. 13, another owner, Canadian Oil Sands Trust, had revealed the upgrader could cost as much as $5.6 billion. Sangster said everyone would be happy if that estimate could get back down to between $4.7 billion and $5.1 billion.
CALGARY (CP) Shell Canada chief executive Tim Faithfull is retiring in July, to be replaced by Linda Cook, the first female to head a major integrated oil company in Canada. Until the 1980s women were barred from membership in the Petroleum Club, a key dining and meeting venue for the Alberta oilpatch, but the whole industry has gone through a transformation in that time, Murray Sigler, president of the Calgary Chamber of Commerce, said after Cooks appointment was announced Friday. Ten to 20 years ago it may have been a big deal, he said. She wont have any trouble, said Frank Atkins, a University of Calgary economics professor who specializes in oil and gas. Her problems will not be that shes female, Atkins added. Her problems will be that shes in a damn tough industry and people will be asking, What are you going to do with your Canadian operations? Currently CEO of Royal Dutch/Shells global gas and power business in London, Cook doesnt lack experience at the top. Fortune magazine last October rated her 11th on a list of the 50 most powerful businesswomen in the world. At Royal Dutch/Shell, Cook, 44, had an annual capital budget of $1 billion U.S. and pulled in revenues of $15 billion US from activities in over 40 countries. She was responsible for the companys global liquefied natural gas business, as well as marketing, trading, pipelines and power generation. I think its a new area for her to run a company like this, an integrated company, Faithfull said of his successor. Shell do well; shes a very good communicator, very open, he said. I think people will find her a very good person to work with. Faithfull, 58, has been with the Anglo-Dutch multinational for 36 years, serving in several countries prior to becoming Shell Canadas president and CEO in April 1999. Cook graduated with a degree in petroleum engineering. She joined Shell in Houston in 1980 and held numerous managerial positions in the companys exploration and production business. She has been married for 21 years and has three children, aged 11, 14 and 16.
OTTAWA Air Canada has largely been the author of its own misfortune, clinging to a flawed business plan that relies largely on slashing labour costs instead of truly restructuring, angry MPs said Thursday. That suggests the insolvent carriers decision Tuesday to file for bankruptcy protection may not be its final crisis, MPs suggested during emergency hearings by the Commons transport committee. Meanwhile, large back payments to its pension plan still hangs over the company, although the federal financial services regulator denied claims by Air Canada that a pension shortfall helped push the carrier into seeking bankruptcy protection. But a key problem is Air Canadas effort to be all things to all people from a discount carrier to a high-end international airline in an effort to crush the competition, suggested several Opposition and Liberal MPs. They accused Air Canada of sticking to that flawed plan even in restructuring. Instead, its slashing wages and lobbying for cuts to taxes and fees rather than looking for a new business model. You seem to want to blame everybody else, Liberal MP Joe Fontana complained to a company executive. Air Canada, struggling under almost $13 billion in debt, has blamed its crisis on a litany of woes, from the Sept. 11 terror attacks to high fuel prices, the high-tech meltdown that drove away business travellers and the SARS outbreak that has hurt its overseas business. But other carriers such as Calgary-based WestJet Airlines have grown and profited and without the built-in advantage that Air Canada management inherited when the federal government suspended competition laws and allowed the company to acquire rival Canadian Airlines in 1999, said James Moore, Opposition Alliance transport critic. You were given the gift of a Crown asset with an 80 per cent market share, almost a monopoly on travel, and it has been completely squandered, so you do understand the lack of public sympathy for Air Canadas cause, said Moore. With nearly 40,000 workers, Air Canada and its regional unit may be overstaffed, but thats a sign of bad management that has seen the company invent low-cost subsidiaries that compete against the main carrier, said Liberal MP Stan Keyes.
OTTAWA (CP) The Bank of Canada raised interest rates Tuesday and warned of still higher rates to come. As it lifted its key overnight rate by a quarter-point to 2.50 per cent, the central bank said strong economic growth means it will have to raise rates even more. Analysts say that means as many as four more interest rate hikes likely lie ahead, although opinion is divided over just how much the rate might rise. Tuesdays increase in borrowing costs which big chartered banks quickly matched by raising their prime rate to 4.25 per cent was expected by the markets. That meant the dollar, which shrugged off political turmoil over the ouster of Paul Martin as finance minister Sunday, showed little reaction to the widening spread between Canadian and U.S. rates. The loonie opened Tuesday at 65.53 cents US, up 0.06 of a cent from its close Monday. However, by the end of the day it had slipped 0.16 cents to close at 65.31 US. Markets werent really surprised by todays move, said Warren Lovely, senior economist with CIBC World Markets. Really, what youre seeing is a currency that hasnt really been shocked by too much when you consider it ended the day (Monday) without really any lasting damage from the finance minister changeover. With a surprisingly strong six per cent growth rate in the first quarter, when measured on an annualized basis, interest rates must continue to climb to head off inflation, the central bank warned in a statement. In contrast, sluggish U.S. growth means the Federal Reserve wont likely boost its record-low rate of 1.75 per cent until late this year. With our largest trading partner in the doldrums, the Bank of Canada wont likely want to raise rates any quicker than quarter-point increments at each of its next four rate-setting announcement dates, said Lovely. But with several clear signs of strong growth at home raising the risk of runaway inflation the bank will want to take its foot off the accelerator faster than that, argued Marc Levesque, senior economist with Toronto Dominion Bank. The banks key concern is holding down inflation. The core rate, which excludes volatile food and energy costs and is most closely watched by policy makers, was 2.2 per cent in April.
TORONTO (CP) Royal Bank says it will receive $195 million US plus interest in a settlement agreement related to a soured transaction with Enron Corp., the bankrupt Houston energy company at the centre of a major accounting scandal. The settlement also involves the Enron creditors committee and Rabobank, a Dutch bank in a legal battle with Royal, which is Canadas largest financial institution. A Royal Bank spokesman said Tuesday the $195 million US the bank will receive from the settlement will reduce the amount it is owed by the Dutch bank, but in the meantime their respective lawsuits will proceed. The settlement involves proceeds from the sale of 11.5 million shares of stock in EOG Resources in the so-called Cerberus transaction that closed in November 2000. Royal maintains that Rabobank assumed the credit risk of the Cerberus transaction through an agreement between them in January 2001, and that the Dutch bank was required to pay Royal $517 million US in June 2002. Royal spokesman Paul Wilson said the settlement agreement doesnt affect the suits being bought by the bank and Rabobank. The transaction was meant as a way for Royal to reduce its exposure to Enron. We, like other banks, had other Enron risk on our books and we wanted to hedge that risk, Wilson said. The 11.5 million EOG shares had been put up by Royal as collateral for its agreement with Rabobank. They were eventually sold for $440 million US and Royals share of the proceeds was $195 million US. Royal hasnt taken a provision related to the Cerberus transaction because it remains confident it will win its litigation with Rabobank and will receive the remainder from the Dutch bank, Wilson said. Rabobank, for its part, contends in its court claim that it does not have to pay the money because Royal withheld crucial information from it about Enrons dealings. Rabobank has accused Royal of acting as Enrons henchman and of failing to inform it that the company was a house of cards liable to collapse allegations that Royal has consistently and repeatedly denied. The Cerberus transaction was one of several involving Enron and various financial institutions. In all, these transactions provided Enron with cash totalling $1.38 billion.
OTTAWA (CP) A grim summer for western farmers got worse Friday when Canada lost a major trade ruling on wheat exports to the United States. The U.S. Commerce Department ruled that Canadian durum wheat and hard red spring wheat shipments are subsidized and being dumped in the United States. Mad cow disease, drought and grasshoppers have ravaged Prairie beef and grain producers, and the last thing they needed was a thumbs-down at the trade table, said Neal Hardy, president of the Saskatchewan Association of Rural Municipalities. We just come through drought. We just come through grasshoppers. Weve come through BSE (mad cow disease) in our cattle industry and now a tariff added on, he said. Tie them all together and thats one more impact that we dont need out there as farmers in Canada. Duties of 14.16 per cent should be imposed on Canadian hard red grain wheat and 13.55 per cent on Canadian durum wheat, the ruling said. Canada is unhappy with the decision and is preparing to fight back, said Ralph Goodale, minister responsible for the Canadian Wheat Board. We think its wrong in fact and wrong in law, he said. And well be considering every means by which we can oppose this decision. Goodale would not say exactly how the federal government might respond. Well consider very carefully what is the most effective way to make our point, he said. Canada may have opportunities to appeal the ruling under the North American Free Trade Agreement or the World Trade Organization. The U.S. International Trade Commission now has 45 days to issue a final report, which will determine how badly Canadian grain exports are hurting U.S. producers. The critical decision will be in a month or two when the (trade commission) which is a somewhat more independent and arms length agency than the U.S. government, when it makes a determination with respect to injury, said Goodale. That is really the crucial question. Final duties on the exports would only apply if the ITC found the Canadian wheat threatened U.S. producers, said a statement by Pierre Pettigrew, the federal trade minister. Wheat board chairman Ken Ritter said Canadian farmers are being hurt by protectionist politics in the United States.
The little bars of soap left behind by guests at the Red Deer Lodge will be turned into laundry detergent. Entrepreneur Bob Larson estimates Red Deer hotels use 18,000 kilograms of soap bars a year. Most are thrown away after a couple of uses in the sink and shower. In a unique recycling project, Larson will collect the soaps from the Red Deer Lodge and turn them into Buffalo Soap, laundry detergent for sale in B.C. The program was started by Larsons friend Roger Sevigny in Victoria and Vancouver in 2000. It began last year in Alberta. So far, hotels in Banff, Jasper and Edmonton have signed up. The hotel industry in Alberta is throwing out 180,000 kilograms of soap a year and we can do something with it, said Larson, Alberta president of H.I. Landfill Diversion Inc. Recycling is fairly simple. Containers for the soap are attached to the carts wheeled room to room by housekeeping staff. The soap bars are then tossed into recycling bins and picked up by H.I. Landfill Diversion at no cost, said Tracey Stratton, sales and marketing director for Red Deer Lodge. Once the program begins at Red Deer Lodge later this month, other local hotels may get on board, said Stratton. It will be extremely beneficial to the local environment and to the environment in the big picture. The soap will be shipped to B.C. until enough Alberta hotels participate to set up a viable production and sales operation here, said Larson, an Edmonton resident who previously owned oilfield businesses. The soap will be dried, ground, sifted and formulated into a detergent suitable for the soft water in Victoria and Vancouver. The detergent will be sold as Buffalo recycled laundry soap at the Vancouver-Island based Thrifty supermarket chain. To sell the product in Alberta, the formula developed by a chemist would need to be changed, said Larson, who sees that day coming. Stratton said hotels are becoming more involved in environmental programs. The Red Deer Lodge is already donating leftover shampoo and conditioner to Peoples Place homeless shelter. Larson dropped off recycling bins at Red Deer Lodge Tuesday and the program will begin in a couple of weeks He said soap bars arent better or worse for the environment than other trash thrown in the landfill, but the thousands of bars take up space and get wasted.
CALGARY (CP) Canadas largest natural gas shipper, TransCanada PipeLines Ltd., made a major move into nuclear power Monday, expanding the electricity business it has grown in recent years by buying and building gas-fired power plants across North America. In a high-profile move, the big Calgary energy company made its first foray into the nuclear field Monday by becoming a key partner in Ontarios Bruce Power complex on the eastern shores of Lake Huron. Chief executive Hal Kvisle insisted the companys nearly one-third ownership in Bruce, which will cost about $376 million, is keeping with TransCanadas strategy of smart acquisitions in markets it knows well. We always look to the underlying supply fundamentals and to our competitive position in the market, Kvisle told a news conference in Calgary. And its on that basis that we then go forward and kick the tires if you will on individual opportunities. TransCanada completed a successful turnaround of its sagging fortunes recently by retreating from a variety of international ventures and selling billions of dollars worth of non-core assets. The company instead trained its sights on its core business of shipping natural gas across Canada and into the northern United States as well as expanding into power generation. And while the past year has been calamitous for many North American gas shippers and utility companies, TransCanada has remained in strong financial shape. Kvisle said Monday that his company was very impressed by the low-cost, reliable nature, of nuclear power in Ontario which has Canadas most extensive network of nuclear generating plants and shareholders should be as well. TransCanada currently has interest in eight power plants in Alberta and three in the U.S. Through a limited partnership called TransCanada Power the company is also involved in five other plants in Ontario, one in B.C. and one in New York state. The decision to buy into Bruce is also one of a very few expansionist moves by private power companies into Ontario, which recently spooked the market by reverting from its full privatization plan and re-capping electricity prices. TransCanada also announced last week that it was studying the viability of building a big gas-fired power plant for downtown Toronto.
REGINA (CP) Bondholders gave the go-ahead to the Saskatchewan Wheat Pools modified restructuring plan Tuesday, securing the immediate future of Canadas second-largest grain-handling company. The development means the Pool Saskatchewans largest single corporate employer can stay in business and avoid the threat of imminent bankruptcy. We are absolutely pleased with the result, said company CEO Mayo Schmidt. Certainly we look forward to getting back to running the business as opposed to working on financials and negotiation. Im personally quite excited and I know the employees are absolutely thrilled. Two group of bondholders voted on the proposal Tuesday. The first group of 2004 bondholders voted 85 per cent in favour of the plan, while 89 per cent of the 2007 bondholders endorsed the move. Cliff Reid, a bondholder, said he voted in favour of the plan. Its a big load for them to carry but they seem to have a plan so lets give them a run at it, he said. Hopefully its going to work out. Mired in a perilous financial position and at risk of defaulting its creditors, the Pool was caught between the interests of banks and bondholders as it tried to restructure its debt. With a restructuring plan worked out and a vote scheduled for Jan. 31, an ad-hoc group representing 42 per cent of mid-term bondholders stepped forward and said it would reject the deal because it put the banks before them. Faced with receivership if the vote was no, the Pool was forced to postpone the vote and rejig its proposal. David Schroeder, an analyst with Dominion Bond Rating Service, said the new plan gives the Pool time to deal with the more long-term problems related to the poor state of the Canadian grain industry. Long-term, the company is facing challenges, but this sets their financing in order and gives them the flexibility to continue to improve results, Schroeder said. Hugh Wagner, general secretary with the Grain Services Union, said the restructuring comes as a relief to the more than 1,000 Pool workers the union represents. You can imagine the uncertainty that prevailed in the work force last week and over the weekend, Wagner said. That cloud has certainly been lifted and its much more optimistic.
A computer and telecommunications recycling facility in Rimbey is expected to create at least 100 jobs within the next two years. Maxus Technology Inc. of Calgary will open the facility in the old parks and recreation building in August or September. Clayton Miller, spokesman for Maxus, said the facility will employ about 100 staff and process more than 2.2 million kgs. of electronic waste annually when its fully operational in one or two years. Rimbeys central location and the price of the building made it a very attractive location for the operation, he said. The company has been advertising to fill supervisory positions. One of the companys long-term goals is to expand the facility to 40,000 square feet from 23,000 square feet, added Miller. Miller said there is a growing demand for businesses that recycle computers, which are considered hazardous waste. For example, there is about 1.7 kg of lead in the glass of a computer monitor. The lead is added to protect users from radiation. Miller said computers and electronics shipped to the Rimbey facility will be refurbished and sold, or broken down into their metal and plastic components. The copper and gold will be sold on the world market. The glass will be ground and mixed with a compound that binds with the lead, preventing it from leeching into the environment. Maxus is looking at ways to manufacture secondary products, such as cement, from the plastics and the glass, said Miller. Public pressure will force the powers that be to take note of this issue, he said. Rimbey Mayor Dale Barr said Maxus is an environmentally friendly industry that fits right in with the towns long-term plans for economic development. The facility is the first in several years to generate substantial employment in the community, he said. Barr said the long-term employment prospects are positive. The services Maxus provides will be in demand across Western Canada and the northern United States as long as computers exist, he said.
TORONTO (CP) A massive restructuring at American Airlines, a bankruptcy filing by US Airways and a poor forecast for North American airline traffic this fall are taking their toll on several aviation companies and airlines in Canada. Shares in airline product and service suppliers such as Bombardier and CAE Inc. took a nosedive Tuesday, while carriers such as Air Canada and WestJet were also unable to escape the market turbulence. In CAEs case, all the signals that are coming out of the U.S. indicate that some airline traffic may not pick up, and as a result, training for pilots may be reduced, said Jacques Kavafian, director of research at Octagon Capital in Toronto. CAE, which makes flight simulators and trains commercial airline pilots, paid dearly Tuesday for whats happening south of the border. Its stock (TSX:CAE) dropped 15.1 per cent, or $1.07, to close at a new 52-week low of $6.02 on the Toronto Stock Exchange. However, Kavafian said he disagrees with the U.S. gloom. A lot of it has to do with seasonality, he said. American Airlines, for example, announced Tuesday it is cutting 7,000 jobs and cutting its capacity by nine per cent. Theyll be reducing their capacity versus peak summer months. . . They do it every year, he said, adding that CAE current stock price could present a great bargain. Montreal-based transportation giant Bombardier (TSX:BBD.B) is also hurting due to the airline woes in the United States, and other concerns including U.S. rail giant Amtrak suspending its Acela Express trains, built by Bombardier and its partner Alstom, over locomotive problems. But Bombardiers problems with Amtrak are overshadowed by the airline situation, Kavafian said. Not only is Bombardier being squeezed on the rails, its also got fewer buyers for its airborne products, as carriers retire jets to scale down capacity, rather than purchase new ones. Bombardiers stock lost 9.6 per cent on the TSX on Tuesday, falling 96 cents to a new 52-week low of $9.04 in heavy trading of nearly 12 million shares. But Kavafian said that in the next six months, he expects the total number of people who fly to increase. Air Canadas stock (TSX:AC) crashed as well, falling about 10 per cent this week so far in the wake of a bankruptcy filing Sunday by US Airways.
Growing resistance to having oil wells or gas lines on private property has prompted a public meeting in Rocky Mountain House. What happens when property owners object to resource activities on their land is the focus of a grassroots information session Monday at the Rocky Community Centre. Co-organizer Rick Anderson said theres a need for a meeting because many area residents are wary about the effects of oil and gas production. Health and pollution concerns are becoming more prevalent. As well, Anderson said farmers often worry oilfield activities will fragment their land, making crop harvesting cumbersome and obstructing cattle movement between grazing fields. Since oilfield activity can be noisy, livestock farmers are also commonly concerned it will unsettle their cows, said Anderson. In almost all cases, outright refusing to give an oilfield company land access isnt feasible. While landowners maintain surface rights to their land in Alberta, the province owns mineral rights. For this reason, Anderson said the bulk of oil or gas proposals that go through hearings eventually get the green light from the Alberta Energy and Utilities Board. But concerned landowners have some recourse. Anderson stressed theres room for negotiation with resource companies. For example, new technologies such as horizontal drilling can allow oil reserves to be accessed from less intrusive locations, Anderson said. The meeting will inform area landowners of their options. A panel of speakers will be featured, including an experienced landowner and representatives from the EUB and oil industry. The 7 p.m. meeting is sponsored by The West Central Stake-holders, a group of community, oil and gas, provincial and municipal representatives who want to provide a forum to solve landowner/oil industry conflicts. It will be held at the community centre at 47th Street and Kamikawa Drive. There is no admission charge. For more information, contact Anderson at (403) 845-5335 or Eric Mohun at (403) 205-7648, ext. 7648.
CALGARY (CP) Homeowners in Ontario and Alberta will be seeing higher gas bills thanks to rate increases approved by provincial regulators Friday a trend occurring throughout Canada as consumers pay for the cold winter and low storage supplies. The Ontario Energy Board gave its approval for Enbridge, Canadas largest natural gas distributor, to raise its natural gas price by 25 per cent. The Calgary-based company (TSX:ENB) said the increase in its gas supply charge will amount to about $164 a year on a typical households bill. Increased demand due to the cold weather across North America and less drilling activity have contributed to an increase in natural gas prices, Enbridge Gas Distribution president Jim Schultz said in a release. Although prices have increased, natural gas continues to be less expensive than other options for home and water heating. Enbridge said that during the past five years, natural gas has been on average about 46 per cent cheaper than electricity and 20 per cent less expensive than oil for home and water heating. Effective Tuesday, Enbridges gas supply charge will increase to 26.6 cents per cubic metre from 21.25 cents. Customers who buy their gas from Enbridge, rather through another marketer, will also face a surcharge of 3.7 cents a cubic metre to compensate the utility for higher-than-expected gas costs after its previous price adjustment. Meanwhile, the Alberta Energy and Utilities Board specified its monthly rate for April, maintaining the nearly 25 per cent increase in gas prices that began in March. Gas consumers in northern Alberta will pay slightly less than they did last month but southern Albertans will pay more. The April price is a recovery of the undercollection that companies made last month, said Bob Curran, a spokesman for the Alberta regulator. Last month, prices were actually higher than they had forecast. Fridays announcements came a week after the British Columbia Utilities Commission approved a B.C. Gas application for a 16 per cent increase. All Canadian consumers are facing the same reality that natural gas supplies are at very low levels, said energy analyst Brian Prokop of Calgary-based Peters & Co. We had record drilling but were still seeing relatively flat natural gas.
Rumours of a gas price hike fueled a rush to fill up at local service stations Friday. Long lineups were reported at a number of stations around Red Deer and Real Canadian Superstore faced long lineups throughout the day. Stations held steady at 78.5 cents a litre with the exception of Riverside Exxon Car Wash, 4937 54th Ave., which put its price up to 93.3 Friday morning. In the Superstore gas bar lineup some motorists admitted being spooked by the prospect of 90 cents plus for a litre. Thats mainly why Im here, said Jim Gough, of the price rumours. The price is outrageous. Im talking price gouging. Im talking nationalization of oil companies. Gough even raised the spectre of a national energy program as a possible way to keep prices down. Nicole Olsen usually fuels up Friday but made sure when she heard of the possible price hikes. I would rather pay less than more, she said with a chuckle. Somebody has already said there are places going up to 93. At a Husky station on Gaetz Avenue, Norm Morrison said gas price hikes was a major topic of conversation among staff and customers at his business Riverside Hair and Tanning. The husbands were coming in and saying you better fill your car up. They heard it was going up later on today. There was a real concern out there. Thats exactly why Im here, as he filled up about 5 p.m. The man behind some of the fears, Riverside Exxon manager Jerry Strand, said he raised his prices after hearing rumours gas was headed as high as 95 cents a litre in Calgary and Edmonton. In order not to completely lose my shirt I had to be somewhere in between. If its going to be that high I cant afford to not anticipate it to some extent. Strand said he is a gasoline dealer and does not get paid commission to sell gasoline like most service stations. He owns his gasoline and if he gets caught short on price, he has to swallow the difference. Riverside Exxon usually charges slightly less for its gas than other city stations.
TORONTO (CP) Enbridge Inc., which operates Canadas largest oil pipeline and the largest natural gas utility in Ontario, expects stable gas prices this year but wants to charge more for distributing gas. Enbridge CEO Patrick Daniel said Friday that natural gas prices should be fairly stable this year, barring major weather swings. Although there arent a lot of new gas projects coming online, the amount of gas in storage after a warm winter is the counterbalancing factor that keeps natural gas in that $3 US (per thousand cubic feet) range that its operating in right now, Daniel said. In early 2001, gas prices spiked at about $10 US, which led to big increases in gas bills. Enbridge, which operates Consumers Gas, sells natural gas to its 1.5 million Ontario consumers at cost, and earns its money by charging for distribution. While gas prices may stay stable, Enbridge is asking the Ontario Energy Board to let it boost the percentage it can earn from transporting gas to consumers homes. Currently, its allowed a 9.5 per cent return on investment for that service, but we feel that is low by as much as two per cent compared to our U.S. peers and the companies that were trying to compete with, Daniel said. If Enbridges application to boost its return to 11.25 per cent is approved, this would mean an annual increase of about $45 for a typical residential customer who uses natural gas for heating and hot water. A decision by the board is expected in the fall following a hearing this summer. Enbridge reported Friday that its first-quarter profit rose 35 per cent, reflecting strong results at its pipeline business, increased earnings from an acquisition of a Spanish company, and a gain from the sale of investments. For the three months ended March 31, earnings were $113.1 million, or 71 cents a share, compared to $83.5 million, or 53 cents a share, in the year-earlier period. Revenues were up 40 per cent to $1.08 billion. Enbridge shares (TSX:ENB) hit a record high of $47.21 Friday on the Toronto Stock Market, closing at $46.76, up 68 cents. The 52-week low for the stock, which has a current dividend yield of 3.25 per cent, is $35.55. The company expects strong growth, particularly from the transportation of oil from the Alberta oilsands through its pipeline to eastern markets.
EDMONTON (CP) Biotech company Biomira will press ahead with research into cancer vaccines, the companys chief executive told shareholders Thursday despite disappointing results in a trial of Theratope for women with metastatic breast cancer. No question Biomira has suffered a body blow. But were only injured. Were not dead, company president Alex McPherson told 85 investors gathered at the Sheraton-Grande Hotel. Shares in the company plunged June 17 after it announced that Theratope trials had failed to significantly slow the progression of the disease and improve survival rates. Metastatic cancers start in one area of the body and then spread to others. The company had hoped to file for regulatory approval for the drug on the basis of the trial. Biomira had cut its workforce to pare costs and slowed development of other drugs to focus on Theratope. Youve seen your wealth eroded and your dreams and those of our patients have been wounded, McPherson told investors. Despite the bad news, shareholders voiced not one critical comment about the companys management. Rather, investors wanted to know technical details of the failed trial. McPherson said he is at a loss for scientific explanations about why Theratope was not effective among the majority of breast-cancer patients in the trial, all of whom had previously undergone chemotherapy. There was one nugget of good news, contained in a subset of participants who were also taking hormone therapy at the same time as they were taking Theratope. While the number is not considered statistically significant, Biomira will sift through the 10,000 pages of trial data with an aim of approaching regulators to pursue the hormone-Theratope connection over the next three to five months. From an academic perspective, what we have uncovered is an interesting dynamic, McPherson said. During the current quarter it has raised $14.5 million and said it has funds to sustain it until the end of 2004. Biomira shares closed down nine cents to $2.11 on Thursday.