What is 5G?

The race is on to develop newer and faster cellular networks. The new generation of wireless technology is expected to improve the way people live and work, as well as generate a new wave of economic growth. With the transition to 5G, the wireless network will see faster speeds, higher bandwidth and lower latency opening the door to life-changing-innovations.

Understanding 5G

Canadian LTE (4G) networks already support fast downloads and easy streaming of content. But standard speeds and bandwidth capacity need to be higher, while latency (the time it takes to send a signal from one point to the next) must be virtually nonexistent in order to deliver data instantaneously. A virtually nonexistent latency period would allow consumers to experience increased efficiency with faster data transmission speeds. With the development of more innovative technology allowing increased accessibility, mitigation of information delay is highly crucial.

To help make this possible, 5G technology will use new frequencies of spectrum, which are the radio waves that are used to carry cellular signals.

Source: How 5G will change your life, The Globe and Mail

Source: How 5G will change your life, The Globe and Mail

Current networks use low and medium-band spectrum with wavelengths up to half a metre. Low-band radio waves can travel long distances and penetrate buildings which makes for reliable coverage for carriers. Unfortunately, low-band spectrum can’t carry as much data as higher-frequency waves that is why 5G networks will also use so-called millimetre-wave spectrum with wavelengths so small they are measured in millimetres.

These millimetre radio waves can carry high amounts of data but don’t travel far, which means network builders will need to place many small cells close together to use this spectrum.

To make the best use of different types of spectrums networks will include a mix of traditional cell-phone towers, antennas on rooftops (carrying signals over long distances) and a web of small cells at lower heights (supporting high bandwidth use over shorter distances).

Since 5G will still use the existing frequencies as current networks, existing cell phone towers can be upgraded to support 5G with new frequencies being added later allowing for even smaller hardware. Companies like Ericsson can build up to eight 5G antennas onto a chip smaller than a dime. This tiny technology requires less power and can be used on low-power devices making 5G ideal for the Internet of Things devices.1

The combination of wireless infrastructure along with the advances in radio technology will help carriers reduce latency and support billions of devices using more data than ever before.2

5G Advantage

Faster Downloads

5G opens up speeds 10 times faster than that of older technology, delivering up to 20 Gigabits-per-second peak data rates and 100+ Megabits-per-second average data rates. To put this into perspective, the faster speeds will let you download the newest episode of Game of Thrones in less than 5 seconds.

 Lower Latency

Latency is how long it takes a signal to transfer over a network. Many mobile networks can maintain 50 milliseconds, but 5G promises latency of 1 millisecond or less. 5G has significantly lower latency to deliver more instantaneous, real-time access and opens the doors for radical new technology like real-time virtual reality, online multiplayer gaming, remote control surgeries, and even more.

 Higher Bandwidth

5G will natively support all spectrum types (licensed, shared, unlicensed), bands (low, mid, high), a wide range of deployment models (from traditional macro-cells to hotspots), as well as new ways to interconnect (such as device-to-device and multi-hop mesh). 4G frequencies will still be usable by 5G technologies, and 5G will also be able to use even higher frequencies.

Source: What is 5G, Qualcomm

Source: What is 5G, Qualcomm

How 5G Will Change Our Lives

The fifth generation of wireless networks will allow innovations to flourish and dramatically change our day-to-day life. This new wireless technology will open the door to life-change innovations, such as driverless cars, smart-city traffic controls and more sophisticated industrial automation.

 More Efficient Health Application

5G networks will support health-tracking devices that depend on constant monitoring. Lower latency and super-high bandwidth will also help enable instant sharing of x-rays and other medical data. Remote control surgeries will also become feasible with the aid of the new technology.

 A Better Experience in a Game Night

On any given night, thousands of smartphone users stream into Rogers Centre or Scotiabank Saddledome, placing heaving demand on the wireless network. Plus, the venue’s concrete walls pose a barrier to signal penetration. Placing small cells throughout the stadium will help provide more capacity for overburdened cellular networks. This should make it easier for audiences to upload a selfie or stream a video replay.3

A recent study conducted by Accenture has further explored the potential economic benefits resulting from a select set of 5G use cases in Canada. See the charts below for more illustrations.4

Source: Fuel for Innovation - Canada’s path in the Race to 5G, Accenture

Source: Fuel for Innovation - Canada’s path in the Race to 5G, Accenture

When Will 5G Become a Reality

In Canada, major cell phone networks are already testing 5G in major cities, but it probably won't be available to the general public in Canada until late 2019 or early 2020. It will arrive first on Bell, Rogers and Telus (possibly at premium rates) with rollouts to low cost and regional carriers over the next two years. Cell phones that support 5G in the Canadian market could be released as early as the summer of 2019. Based on most recent forecasts, a timeline of rolling out 5G for major carriers:5

5G Coming Canada.png

Fuel for Canadian Economy and Labour Market

According to a new report from Accenture, new 5G wireless network could contribute as much as $40 billion annually to Canada’s economy by 2026. The benefits will be felt not only in national GDP, but also in terms of Canadian jobs. The estimated $26 billion investment in 5G network infrastructure and adoption will result in short-term construction and engineering jobs. Specifically, more than 150,000 short-term jobs will be created between 2020 and 2026. It is further estimated by this same time close to 250k permanent jobs will be added to the Canadian economy.6


5G Providers Around the Globe

According to research firms IDC and HIS Markit, China’s Huawei, Sweden’s Ericsson and Finland’s Nokia Corp. are the top three radio gear vendors in Canada and around the world for 5G. China’s ZTE Corp. and South Korea’s Samsung round out the top five globally for a market that is expected to expand to US$26 billion by 2022 from US$528 million in 2018.

Both Bell and Telus, Canada’s second and third-largest wireless service providers have been using Huawei equipment in 5G network trials however, other suppliers include Ericsson and Nokia. Rogers is working with Ericsson while Shaw has been working with Nokia.

Huawei in the Spotlight

Huawei, a global telecom equipment supplier based in Shenzhen, China, has been accused of posing a potential risk to national security because of a Chinese law that requires companies to co-operate with intelligence gathering if asked.

Three of Canada’s partners in the Five Eyes intelligence-sharing group - the United States, Australia and New Zealand - have forbidden the use of Huawei products in 5G network development, though the U.S. ban is currently limited to government agencies. The UK has ordered that Huawei be banned from supplying core parts of the future 5G mobile phone network however, Huawei will be allowed to supply some “non-core” technology to UK phone companies.

The Canadian government is carrying out a comprehensive review of Huawei’s potential involvement in 5G that is believed to include a broader look at how Canada should make its way in an increasingly global economy. Given the breadth of the review, several agencies including the Communications Security Establishment, Innovation, Science and Economic Development and the Privy Council Office are taking part in the review.

The government has said little publicly about the review, but the results are expected before federal election this fall.7

 A detailed timeline of critical decisions on Huawei of Five Eyes intelligence-sharing group as follows:

5 Eyes.png

Huawei’s Impact on Canada’s 5G Future

“[The] impact [is] small because limited [resources] has been spent. BCE and Telus have not put a lot of capital into trials, so the financial hit from a ban Huawei’s participation wouldn’t be large. It doesn’t sound like all that much has been spent on 5G. They also have Nokia as another 5G partner, so they could probably just switch all toward Nokia if they really need to.”
— Desmond Lau, Analyst - Veritas

In addition to responses from analysts, the CEO of BCE Inc.,  said during a conference in late February 2019 that a government ban on Huawei network equipment wouldn't delay the company's plans for rolling out fifth-generation wireless services. He added that the outcome of the decision won't "in any way impact our timing in the market for 5G."

However, the views on risks from the potential Huawei ban are divided among the major telecommunication suppliers. Telus acknowledged mid February 2019 that the deployment of its fifth-generation wireless network could be delayed and be more expensive than anticipated if the Canadian government chooses to ban equipment from Huawei.

Due to Huawei being the cheapest of the three major 5G suppliers, Telus could incur higher infrastructure costs if the other two are the only options, which would result in lower margins on the company’s internet and mobile services. Another issue is that Telus is already in the 5G pre-trial stage with Huawei and would likely incur costs when being forced to sever ties with the Chinese company.8

If Telus and BCE Inc. use Huawei on its 5G network, then both companies may have to charge customers more which could possibly turn customers off high-end plans that include 5G. If customers avoid these plans, it could not only represent loss of revenue, but also a lower ROI on money spent building the 5G network.

To conclude, with 5G we will enable a truly connected world which offers various opportunities for business and will comprehensively reshape how we interact with our devices. The benefits of 5G extend well beyond consumer application, including streamlining operations for increased productivity, creating new revenue streams and enhancing customer experience in various industries. A report by Financial Post indicates many benefits for industries within Canada. The agriculture work in Saskatchewan and Manitoba will become vastly more precise with data collected from remote sensors. In Alberta’s oil and gas fields, the technology is expected to improve worker safety through wearables that can detect critical issues such as fatigue or stress. Similar efficiencies are expected to positively impact Ontario’s auto manufacturing plants, fisheries in the Maritimes and British Columbia’s forestry sector.9 As for Canada, the potential delays of 5G deployment if the ban on Huawei is approved remains uncertain, but any ban would only apply to 5G networks, and not the existing 4G or previous systems.10

For more information on 5G, refer to the following reports and articles.

1.    Everything You Need to Know About 5G, Qualcomm; The WhistleOut 5G Wireless Guide for Canada (2019), WhistleOut

2.    How 5G will change your life, The Global and Mail

3.    How 5G will change your life, The Global and Mail

4.    Fuel for Innovation - Canada’s path in the race to 5G, Accenture

5.    Is 5G Available in Canada, WhistleOut

6.    Fuel for Innovation - Canada’s path in the race to 5G, Accenture

7.    Five things about possible involvement of Huawei in Canada's 5G networks, National Post

8.    BCE says 5G network plans wouldn't be delayed by a government ban on Huawei, CBC News; Possible ban on Huawei over national security could delay 5G rollout, Telus says, CBC News

9.    What 5G Means for the Future of Businesses in B.C., BCBUSINESS; How 5G Connectivity Will Keep Canada Competitive, Financial Post

10. How the Huawei 5g Controversy Could Affect Telus Corp Stock, The Motley Fool

Keeping Up With The Latest Food Trends


With established industry players and the absence of significant growth opportunities, the food manufacturing industry is considered a relatively mature market. Companies within the industry strive to identify trends and innovations to gain a competitive advantage over their peers. Some of the key trends that we are following have the potential to significantly impact the entire food industry.

1. Cannabis

There have been waves of discussion between both consumers and food manufacturers to include cannabis in food and beverages. Cannabis is emerging in consumer’s daily necessities, including coffee, cocktails, cereal, ice cream, salads and even skincare products.

Key Highlights:

Cannabis Beverage Producers Alliance logo.jpg
  • The newly formed Cannabis Beverage Producers Alliance, consisting of a group of alcohol and cannabis companies that are pushing for changes to proposed rules governing pot-infused beverages. The 10-member alliance are lobbying for the ability to produce pot-based drinks in the same facilities where non-cannabis beverages are produced. Under current Health Canada’s proposed rules for edibles, pot-infused drinks and food must be made in separate facilities.

US farmbill.jpg
  • In the US, the Trump Administration signed the 2018 Farm Bill in December 2018 allowing the legal cultivation of hemp and derivatives from hemp, as well as cannabinoid CBD to no longer be considered a Schedule 1 narcotic.

  • Carl’s Jr. became the first major fast food chain to introduce a cannabis-infused menu item, unveiling the CBD infused burger at a single location in Denver, CO on April 20, 2019. The CheeseBurger Delight burger contained 5 mg of cannabidiol infused sauce and was retailed at USD $4.20.

  • Recent partnerships between alcohol and marijuana companies include:

  • Other existing cannabis-F&B companies include:

Cannabis F&B Products.gif
  • A June 2018 Deloitte report indicated that more than 60% of cannabis customers in Canada will choose to consume edible products. Food manufacturing companies with interest within the cannabis space should adapt cannabis into their brands to spur new growth and customer additions.

2. Functional Foods

Functional foods are whole foods along with fortified, enriched or enhanced foods that have a potentially beneficial effect on health when consumed as part of a varied diet on a regular basis at effective levels based on significant standards of evidence.
— US Academy of Nutrition and Dietetics

Food industry experts believe that functional foods are one of the primary areas of significant growth, especially with the current emphasis on healthy eating and the increase in nutrition understanding. The benefits of functional food range from reducing cholesterol levels to aiding digestion and decreasing heart disease risks.

Consumers nowadays are increasingly concerned about what they eat, as well as the ever-increasing medical costs especially among the aging baby boomer population. Research findings by CBD Marketing on over 12.5 million social media posts by millennials also indicate that this generation have a strong preference for healthy and natural foods. For instance, probiotics which were once only associated with yogurt are finding their way into a variety of other foods, including protein bars, water, juice and cereal. According to Technavio, the USD $161 billion global functional F&B market is anticipated to grow at a compound annual growth rate of 8% through 2021. The forecasted growth is significant when compared to the overall Canadian food manufacturing expected growth of -1% in 2019. Consumers prefer functional food supplements that are specific to chronic health issues. The increase in demand is fueling more functional foods to manage chronic health conditions including cardiovascular disease, diabetes, obesity and others. Changing lifestyle, unhealthy food habits, and consumers opting for prevention rather than cure of diseases are driving demand for these health functional foods.

People are interested in their health, and if they can pay the price for the option that has added fruits and vegetables, or added omega-3 or added probiotics, (they) are looking for those different packages that make it seem like they are getting benefits from those foods.
— Lizzie Kasparek; Dietician at Sanford Sports Science Institute

Industry players seeking to stay ahead of the curve are spending aggressively on R&D to produce innovative products that consumers are attracted to for the health benefits. For instance, scientists are seeking to extract beta glucan from mushroom to boost the human immune system, produce fiber rich inulin flour from chicory root and explore numerous beneficial nutrients from algae. Plant based options are also infiltrating traditional foods, such as pizza crust made with cauliflower and butternut squash, chickpea pasta and bread fortified with beets and carrots.

(The future of functional foods is) going more in the direction right now of the chemistry and really understanding the composition of native or raw foods…. It’s a very exciting time to be in this field.
— Kristi Crowe-White, PHD; Associate nutrition professor & registered dietician at the University of Alabama

3. Plant-Based Meat

The pioneers of plant-based meat were primarily focused on the vegan and vegetarian niche markets to provide these consumers with an alternative to traditional meat products. As consumers continue to emphasize healthy living and pay more attention to their respective diets, plant-based meat producers started to expand their target market beyond the former niche. In fact, California based Beyond Meat’s current strategy is to place its plant-based meat products in the meat case at grocery stores, with the objective of persuading meat lovers to try it out. Burger King’s research also indicated that only 9% of people purchasing plant-based meat are vegetarians, with 90% being meat eaters seeking healthier options.

People in companies are even rethinking this idea of what meat is. Essentially, it’s a combination of aminos, minerals, lipids and water. Instead of cycling plants through animals to transform them into meats, why not make meat directly from plants?
— Caroline Bushnell; Senior marketing manager at The Good Food Institute

Advantages of Plant-Based Burgers Production

The benefits of plant-based meat include:

  • Reduces saturated fat intake, which is beneficial for weight loss

  • Increases fiber and vitamin content

  • Reduces risk of diabetes, cancer and heart disease

  • Combats acidity in the human body

  • Absence of growth hormones or antibiotics unlike in livestock

  • Plant cultivation consumes less environmental resources compared to animals

On April 22, 2019, Beyond Meat announced it plans to offer 8.75 million shares priced at USD $19 to USD $21 each in its initial public offering (IPO). The plant-based meat producer seeks to raise USD $184 million on the top end of the IPO range and be valued at approximately USD $1.21 billion. Beyond Meat’s products are currently sold at Sobeys, Whole Foods, A&W and TGI Friday’s restaurants among others. It currently has launched products in Europe and Asia, with the intentions of further penetrating these markets.

In Canada, Maple Leaf Foods Inc. (TSX:MFI) announced plans to construct a USD $310 million plant-based protein food processing facility in Shelbyville, IN. The new facility will double the company's current production capacity and produce tempeh, franks, sausages and raw foods. The facility is expected to employ 460 personnel upon start-up and be the largest of its kind in North America.

As well, Canada’s new Food Guide emphasizes plant proteins over meat and is expected to have a major impact on consumers going forward. The new food guide will directly affect government regulated institutions with major purchasing power such as prisons, old-age homes and educational facilities. These institutions will have to abide by the new guide when providing meals to occupants.

Meat lovers don’t love the fact that their meat comes from dead animals. They love it because of the sensory pleasures and the familiarity. If we can provide the things they value and make it from plants, not only will meat lovers be willing to buy it, but they will prefer to buy it.
— Pat Brown; CEO of Impossible Foods

In April 2019, Protein Industries Canada (PIC) announced its first call for co-investment proposals with up to $40 million available in funding. PIC is an industry led, not-for-profit organization created to position Canada as a global source of high-quality plant protein and plant-based co-products. Projects will be accepted in all four priority areas: Create, Grow, Make and Sell. The investment made by PIC will match up to 50 per cent of industry investments on all eligible expenses for successful projects. The deadline to submit interest is June 28, with a second call for proposals to take place in September. PIC will be spending up to $153 million across the value chain over the next four years. Click here to find out more.

As a means of diversification, traditional meat producers and food manufacturers are considering acquiring plant-based food producers to launch their own alternative protein products or include plant protein in existing processed meat products. Recent related transactions include Nestle’s acquisition of CA based plant-based food manufacturer Sweet Earth, Maple Leaf Foods’ acquisition of MA based Lightlife Foods and WA based Field Roast Grain Meat, and Roquette’s acquisition of Texpall’s plant-based protein facility in the Netherlands. With existing market reach and established supply chain, these companies may be able to leverage economies of scale to gain market share faster than the upstart plant-based food producers with more financial constraints and less market penetration.

4. The Millennial Impact

According to Nielsen, millennials born between 1980 and 1995 make up over 27% of the nation’s population and are the largest demographic globally. Millennials have been and will continue to contribute towards several key trends within the food industry. According to a CBD Marketing study of over 12.5 million social media posts, technology savvy millennials tend to share their thoughts and buying habits freely and frequently on social media. Over 8.6 million social media posts analyzed were food related and an additional 2.2 million beverages related. With the vast amount of online information made available by millennials, brand marketers and retailers are spending aggressively to understand their preferences and attitudes and further develop their respective marketing strategies for continued success.

A few key millennial trends are highlighted below:

A. Snacking Habits


There is a strong preference for snacks and 5-6 meals a day over the traditional 3 meals a day. A study indicates millennials snack as often as 4 times a day. Snacks are consumed to relieve stress, provide emotional comfort and for one to indulge or as a reward. With the increase in snacking frequency, there is a growing demand for snacks coupled with substantial nutritional value, convenience and a variety of appealing textures and flavors.

Producers must be aware that millennials have a high tendency to read the label for nutrition value, ingredients and calorie counts prior to making a purchase. In fact, most millennials are also concerned about the origination of food and the process of manufacturing. They care about the environment and expect companies they deal with to be transparent, all key factors that will affect the purchasing decision.

B. Putting Their Money Where Their Mouth Is

Most millennials want fresh, healthy and natural food, and are willing to pay a premium for this. They seek food products that are organic, free of GMOs and are innovative compared to traditional offerings, even if these options cost relatively more. The increase in appreciation of the farm-to-table concept is evident in the increasing number of craft breweries and artisan bakeries emerging, where established international brands with lower price points are being shunned in favor of these premium options.

Millennials do not like cooking. Convenience is their priority and spending time meal prepping and cooking are lower priorities. They perceive eating out and trying new restaurants with their social circles as a unique experience and would justify paying for this expense with ease. At the grocery store, they tend to head towards the frozen foods and prepared foods aisles with convenience at the top of their minds.

Frozen foods producers are also emphasizing the quality of the ingredients used as well as introducing innovative flavors including different cuisines and fusion offerings to further entice consumers. They are aware that these changes justify their price increases from the consumer’s perspective, which ultimately increases profitability margins.

C. Sustainability

According to Nielsen, about 3 in 4 millennials are altering their purchasing habits with the environment in mind. Millennials have a greater willingness to pay more for products with sustainable ingredients, environmentally friendly, organic or socially responsible products. Sustainability practices can range from food production to packaging to logistics. Food companies have recognized this trend and have made adaptations to gain a competitive advantage and to increase bottom lines. For instance, Mars, PepsiCo, Coca-Cola, Unilever and Walmart all announced sustainability pledges with a focus on where products come from, the production and manufacturing processes and the overall impact on the environment. Mass plastic bottle users such as Danone, PepsiCo, Nestle and Coca-Cola have also invested in plastic bottle alternatives and are committed towards increasing the amount of recycled plastic used in their bottles. Other companies have been investing in various sustainability initiatives, such as biodegradable and compostable six-pack ring designs made from barley and wheat, boxed water, wood-based bottles, edible containers etc.

There has also been an increase in the usage of “ugly produce”. Raw produce that were deemed aesthetically unappealing previously would have been discarded as waste. Nowadays, companies such as Whole Foods and Walmart are intentionally sourcing imperfect produce from farms to prevent it going to waste. These are then processed from the original form before being sold in juice or sliced forms, which consumers would purchase without being concerned about the initial appearance.

Companies operating within the food industry recognize that sustainability efforts have come a long way in appealing to customers, especially millennials. They also recognize the effectiveness of promoting these sustainability efforts as part of their respective marketing campaigns.


Today’s Importance of Sustainability


Companies that can capitalize on these trends within the industry will be better positioned to grow revenue and profitability going forward. In our review of the trends identified above, the common denominators are:


We believe these differentiators are crucial to maintain a competitive edge within the food industry.

Funding for Tech Companies


Meet Dave, owner of Calgary-based technology services company TechCo Inc. TechCo has seen a successful first year, has hired a handful of developers, and is funding some initial sales and marketing. The business is burning cash invested by Dave’s personal relationships and a few angel investors, but now Dave needs to grow. He has developed a prototype for a new AR app and is struggling to finance its commercialization. Dave needs growth finance to fund the expansion of his product line and to cover heightened operating costs. He sees applications for his technology with everyone he meets. He needs more people, he needs more marketing resources, and he needs more committed customers.

If you are someone just like Dave, who needs more financing to reach your next business goal, you need to understand the funding options available to you. Below are a few emerging funding options for near start-up tech companies:

Alberta Investor Tax Credit Initiative

The Government of Alberta provides tax incentives for investors to fund qualified small businesses in the tech sector. Beginning in January 2017, investors who provide equity capital to eligible businesses involved in researching, developing, or commercializing new technology, or engaging in interactive digital media development, video post-production, digital animation, or tourism will receive a 30% tax credit. Roughly $20 million in funding is still available for qualifying businesses for the remainder of fiscal 2018/19. Head here for more information.

Opportunity Calgary Investment Fund

The City of Calgary has made it a priority to invest in local businesses and lessen the effects of the most recent economic downturn. The $100 million Opportunity Calgary Investment Fund (OCIF) was developed to grow the local economy and encourage innovation. The funds are available for private sector companies, non-profits, and public institutions alike, and eligible applicants can receive up to half of the entire project budget. Visit here for more information or to apply.

Publicly-funded Third Party Funds

Many fund sources exist to bridge the capital gap for small businesses that may not be ready for venture capital.  The following are government-sponsored groups that provide funding, advice and resources:

The Accelerate Fund

This fund provides early-stage growth financing to small businesses in Alberta’s technology sector with the goal of diversifying the province’s economy. Accelerate Fund II is currently seeking qualifying companies for up to $10 million in funding. For more information, visit here.

Emissions Reduction Alberta (ERA)’s BEST Challenge

This challenge introduced by ERA will award $100 million to projects in biotechnology, electricity and sustainable transportation which aim to reduce greenhouse gases. It is estimated the projects will culminate in a reduction of 2.5 million tonnes of CO2 by 2030. To read more, visit here.

Alberta Innovates

Alberta Innovates is a provincially-funded corporation which invests in health innovations, the bio sector, and clean energy. It has invested millions of dollars into Alberta-based research and technology development with a focus on diversifying Alberta’s economy, improving Alberta’s environmental performance, and enhancing the lives of Albertans through research and innovation. Visit here.

At Whitehorn, we sincerely hope that small business owners like yourself will succeed according to your game plan. We understand the challenges of start-up entrepreneurs, especially when you have an innovative product in the pipes but are struggling to raise capital. We hope the provided information and references will assist you in overcoming these entrepreneurial obstacles, taking you one step closer to realizing your aspirations. We welcome the opportunity to stay in touch with you along your fundraising journey and when your business has reached commercial success, we would be happy to discuss our services and the ways in which we can assist in taking your business to the next level.

SNC-Lavalin: A Timeline

The newest developments in the SNC-Lavalin affair, the ongoing Canadian political scandal investigating alleged political interference by members of Prime Minister Justin Trudeau’s cabinet in the ongoing criminal prosecution of Montreal-based engineering giant SNC-Lavalin, came out of the House of Commons today. Two more testimonies from both Trudeau’s former principal secretary Gerald Butts and the most senior member of public office in Canada, Privy Council Clerk Michael Werneck, were heard by the House’s justice committee. In light of these significant advancements, we provide you with a timeline of the scandal through today which will bring you up to speed.

Who is SNC-Lavalin?

SNC-Lavalin is a engineering and construction firm out of Montreal, Canada which has been in operation under that name since the two largest engineering companies in Canada at the time, SNC and Lavalin, merged in 1991. The firm has since executed thousands of construction and engineering projects and today has over 50,000 employees worldwide with offices in over 50 countries and operations in over 160 countries.

Timeline of Events


Prime Minister Trudeau is scheduled to hold a press conference in Ottawa Thursday morning and will issue a public statement at that time.

Canada’s New Food Guide


Major Differences

  • Serving sizes have been eliminated: While the old Canada’s Food Guide recommended specific serving sizes for various age groups (for example, the above example illustrates the recommended portions for an adult male were eight to 10 servings of fruits and vegetables, eight servings of grain products, two servings of dairy and alternatives, and three servings of meat and alternatives), an initial draft of the new guide recommends eating a wide variety of healthy foods and introduces “the perfect plate,” suggesting one half of a person’s diet be fruits and vegetables, especially leafy greens, one quarter be protein foods, inclusive of dairy such as low-fat milk, kefir, yogurt and cheese, and one quarter be grains that are whole grains when possible.

  • Alternatives are emphasized: Plant-based alternatives to meat, such as tofu and beans are recommended in higher percentage, as they decrease the risk of heart disease, type 2 diabetes, and some cancers. This is also intended to reflect Canada’s cultural diversity.

  • Items have been removed: Juice has been removed from the fruits and vegetables category, indicating that a 1/2 cup of juice is no longer considered to equal one serving of fruit. The old guide also recommended every person drink milk every day, while the new guide makes no mention of this. Also, the old guide recommended at least half of the grains consumed were whole grains, while the new guide seems to recommend whole grains are always best.

  • More value placed on healthy eating habits: The new guide also goes beyond what to eat and includes information on how to maintain healthy eating habits. It recommends cooking at home more often, eating less processed foods, eating foods low in sodium and saturated fats, eating meals with others to encourage slowing down and taking time to enjoy the experience and tradition of consuming meals in community. People are also encouraged to use food labels and be aware of food marketing which may contradict the food guide’s recommendations.

Impacts on the Food Industry

  • Dairy: The Director of Nutrition and Research with the Dairy Farmers of Canada, Isabelle Neiderer, is wary of the new guide combining the meat and alternatives and dairy and alternatives groups, stating the fear that Canadians will receive the message that all proteins are the same. Neiderer stated that “it would be a disservice to the Canadian population and frankly, a recipe for disaster in terms of bone health,” for people to drastically decrease dairy products which are rich in calcium and potassium. All previous food guides since 1942 have recommended drinking milk daily. Dairy Farmers of Canada

  • Meat: Similarly, the Canadian Meat Council believes there will be severe repercussions stemming from the new guide’s recommendation to eat less red meat and incorporate more meat alternatives such as beans and tofu. The Council’s Director of Regulatory Affairs, Jackie Crichton, believes it could be harmful to Canadians to attempt to heed this advice without clearer guidelines: “Anybody who is already consuming foods in the right proportions at the right frequency that result in a balanced diet, if they do read those general statements and were to decide, ‘Oh well, then I have to eat less of that protein,’ what would that impact be on their health?” For the first time ever, industries have not been consulted in the process of producing a revision of Canada’s Food Guide, and must submit their comments to the initial draft along with the general public. The Globe and Mail

10 Minute Energy Highlight

2019 Developments

Venezuela Crisis: The Trump administration issued new sanctions on Venezuela’s state-owned oil company PDVSA that prevents current Venezuelan leader Nicolas Maduro’s regime from exporting crude to the US. The move increases pressure on Maduro to resign and cede power. Maduro’s regime has been accused of human rights violations and abuses, as well as widespread corruption. PDVSA’s US based refiner Citgo Petroleum Corp. will be able to continue operating in the US but will not be allowed to remit money to the Maduro regime. PDVSA is seeking to sidestep the US-imposed sanctions by asking major buyers to renegotiate contracts.

Production Curtailment and Alberta Government Programs: The Alberta government is easing mandatory oil curtailments imposed in January in response to the increase in WCS prices. The new target output in February is 3.63 million bbls/d, an increase of 70,000 bbls/d. The government claims that crude inventory has declined by 5 million barrels since the curtailment began in January.

The Alberta government will also shortly be announcing the winners of $1 billion in funding to develop bitumen partial upgrading facilities, and February will mark the deadline for the province to accept expressions of interest in a new bitumen refinery.

US Crude Production: Crude production in the US hit an all-time high of 11.537 million bbls/d in October 2018, up 79,000 bbls/d from 11.458 billion bbls/d in September. US oil production broke the 1970 record of 10.04 million bbls/d in November 2017 and has set monthly record highs for five straight months since June 2018. US gross natural gas production in the lower 48 states rose to an all-time high of 96.7 bcf/d in October, up from the previous high of 96.0 bcf/d in August (Daily Oil Bulletin).

Upcoming Projects


Husky’s Bid for MEG Energy Corp.

Husky Energy Inc. (TSX:HSE) abandoned its $2.75 billion hostile takeover bid for MEG Energy Corp. (TSX:MEG). The offer did not secure sufficient support from shareholders, with Husky citing “negative surprises” since it commenced its bid in October 2018. These surprises included the Alberta government’s production curtailment and a continued lack of progress on new pipeline development. Husky is proceeding with the potential divestiture of its retail business and its Prince George, BC refinery. Upon Husky retracting itself from the MEG acquisition, MEG announced a $200 million capital budget for 2019, a 70% reduction from 2018’s.


Completion of Christina Lake Phase G and Kirby North Projects

Cenovus Energy (TSE:CVE)’s 50,000 bbl/d Christina Lake Phase G expansion project and Canadian Natural Resources (TSE:CNQ)’s 40,000 bbl/d Kirby North Project are both slated to be complete and producing by the end of 2019.


imperial’s aspen project

Imperial Oil (TSE:IMO)’s $2.6 billion, 75,000 bbl/day Aspen SAGD project has begun construction with operation expected to begin in 2022.


Canadian Natural Resources Expansion

Canadian Natural Resources has submitted a bid for a bitumen-only 45,000 bbl/day expansion at its Horizon mine. This latest expansion will be for non-upgraded partially deasphated bitumen (PDB), similar in quality to diluted bitumen (“dilbit”) produced at Imperial Oil's Kearl Mine and the new Fort Hills Mine, operated by Suncor Energy (TSE:SU).

LNG Projects in canada

The $40 billion LNG Canada project to export LNG to Asia Pacific markets was approved in Oct 2018 and is viewed as the catalyst for additional LNG projects. There are 18 LNG export facilities proposed in Canada (13 in British Columbia, two in Quebec, and three in Nova Scotia) with a total proposed export capacity of 29 bcf/d (Natural Resources Canada).


Key Energy Charts


Exports climbed to 330,402 bbls/d in November 2018 from 327,229 bbls in October2018, which was the previous record. The trend is expected to continue increasing, with January rail-car loadings estimated at 356,000 bbl/d.

Notes: Data consists of 32 Canadian publicly traded E&P companies. 2016 to 2017 capital expenditures based on actual financial statements. 2018 capital expenditures are based on most recent company forecasts. 2019 capital expenditures are based on most recent company forecasts as well as analysts’ consensus.

Notes: Data consists of 32 Canadian publicly traded E&P companies. 2016 to 2017 capital expenditures based on actual financial statements. 2018 capital expenditures are based on most recent company forecasts. 2019 capital expenditures are based on most recent company forecasts as well as analysts’ consensus.

The sector’s capital expenditures have been relatively flat since 2017. The primary reasons for the lack of growth are the volatility of commodity prices, uncertainty regarding large pipeline construction and competition for spending from other oil and gas producing regions. Most producers are emphasizing spending discipline entering 2019, with the operational flexibility to adjust spending plans based on market conditions. The most often cited reason for the decline in 2019 capital expenditures is the uncertainty around oil markets, including pipeline constraints, the impact of curtailments and pricing volatility. Many companies are also implementing a cautious and defensive approach by weighting their spending towards the second half of the year.


The price differential increased to record levels in Q4 2018 due to reduced demand caused by multiple US Midwest refinery maintenance programs, record Alberta production and the lack of pipeline capacity concerns. Since Q4, the Midwest refineries have resumed normal consumption. The Alberta government announced a temporary production curtailment and the global demand and supply for heavy crude has tightened. The current WCS-WTI price differential is ~15% or less than $10 per barrel.

Who Gets What in the New USMCA?

After months of deliberations by trade negotiators, the deal to replace NAFTA was agreed to on September 30 by the US, Canada, and Mexico. All three member countries had items they were fighting for, and the new United States-Mexico-Canada Agreement (USMCA) includes some wins, as well as some losses for each of them. Here we have rounded up who’s saying what about the impact of the deal, as well as some of the major ways in which it will affect Canadians.



  • President Trump would like to see the deal signed by the end of November.

  • The deal is currently sitting with Congress, who are waiting on a report from the US International Trade Commission outlining the impact of USMCA and will accept written comments through December 20.

  • A group of Republican law-makers in the US have written the President urging him to remove language written into USMCA which holds all three member countries to support policies protecting employees from sexual discrimination (pregnancy, sexual harassment, sexual orientation, and gender identity). Prime Minister Trudeau defends the provisions.

  • In wake of the US midterm elections, most analysts still expect the deal to pass. If Democrats (who have said the deal cannot pass as is, based on the need for more enforcement of its legislation in areas such as pro-labour and environmental aspects) show resistance, they may not have much leverage, as Trump could threaten to pull the US from USMCA altogether, which would be economically disastrous.

Oil & Gas

  • NAFTA’s Article 605, which mandated Canada could not decrease the volume of oil shipped to the US over a proportionate 36-month period, has been excluded, which means Canada should be able to expand its geographic reach and diversify its foreign markets.

  • USMCA will make it easier for exporters to ship duty-free to other member countries, specifically pertaining to diluent, a thinning agent, which used to be subject to tax under NAFTA. Duties will be waved on all oil shipments containing diluent, as long as diluent makes up less than 40% of the total shipment.

  • Alberta’s Minister of Economic Development, Deron Bilious, said that this would amount to $60 million in savings for energy sector producers.

Dairy & Poultry

  • Access to Canada’s dairy market will increase for US producers.

  • Until now, Canada’s dairy, poultry, and egg industries have long been protected from foreign competition by a managed system of tariffs, fixed prices, and production quotas.

  • The recent Comprehensive and Progressive Agreement for Trans-Pacific Partnership allowed 10 countries to have 3.25% of the Canadian dairy market; USMCA gives the US a slightly higher percentage.

  • Changes in USMCA considered a win for Trump and American producers and a loss for Canadian producers who now face more competition.

  • Canadian Farmers are fearful many jobs will be lost.

Auto Manufacturing

  • Separately, Canada and the US are attempting to negotiate an end to tariffs on steel and aluminum.

  • During USMCA negotiations, Canada and the US drafted a side letter which outlines details of an agreement intended to exempt a certain amount of Canadian vehicles and auto parts from American national security threats, should Trump decide to impose them.

  • This side letter is part of the reason Canada is willing to sign USMCA while steel and aluminum tariffs are still in place - guaranteeing no auto tariffs is more important.

  • Should Washington impose tariffs on cars, Canada will still be able to export 2.6 million vehicles to the US each year.

  • 75% of North American auto content must now come from USMCA member countries, up from 62.5% under NAFTA.

  • 40%-45% of auto content must be made by workers earning a wage of at least US$16 per hour.

  • Mexico may now be a less desirable destination for large auto makers under these new wage requirements.

Dispute Settlement

  • NAFTA’s Chapter 19, a dispute settlement agreement mechanism which called on a panel of representatives from each country involved in a dispute to agree to its resolution instead of settling the dispute through a country’s court system, has been retained in USMCA.

  • The inclusion of Chapter 19 is seen as a win for Trudeau and a loss for Trump, who felt the provision undermined the autonomy of US courts.

  • NAFTA’s Chapter 11 has been excluded from USMCA, which means Canadian and American corporations no longer have a mechanism in place to sue governments whose trade practices they think are unfair. Mexico will have some Chapter 11 abilities in limited form.

Cross-Border Shopping

  • Canadians can now import goods up to a value of $150 without paying duties, which is up from the current $20, and up to $40 without paying GST or PST.

  • The limit for Americans buying from Canada and Mexico will be greatly decreased from US$800 to US$100.

  • Large online retailers will likely benefit while small businesses may suffer having to collect sales taxes.

When Albertans look at Bill C-69, they don’t see an improved, streamlined regime for regulating energy infrastructure. They see a shaggy and complicated bill that encroaches on areas of provincial sovereignty and which, they fear, will make the timely approval of any large project all but impossible.
— Honourable Senator Paula Simons

Bill C-69, put forth by Canada’s Minister of Environment and Climate change last February, has been approved by the House of Commons and is now in debate at the Senate. The bill is designed to overhaul Canada’s process for approving energy projects and will simultaneously replace the National Energy Board with the Canadian Energy Regulator and completely reform the Federal Environmental Assessment Act, to be called the Impact Assessment Act. The Canadian Environmental Assessment Agency will also be replaced by the Impact Assessment Agency of Canada. Bill C-69 has been widely criticized by the energy and mining sectors, as well as many Indigenous groups, for its failure to clearly outline the processes needed to accomplish its goals.

According to Government of Canada, Bill C-69 was designed to “put in place better rules to protect our environment, fish and waterways, respect Indigenous rights and rebuild public trust in how decisions about resource development are made.” The Government claims that “with these better rules, Canadians, companies, and investors can be confident that good projects would be built in a way that protects our environment while creating jobs and growing our economy.” While these are noble ambitions, Bill C-69 not only misses the point, but its legislation is at best vague and at worst a death sentence for the future of energy projects in Canada. It will continue to push future investment dollars to countries with worse social, environmental, and human rights standards than Canada, ultimately contradicting Trudeau’s broader agenda.

The bill fails to address fundamental issues of trust, economic activity, and national competitiveness. Proponents and investors are not worried about tough, evidence-based regulation but unless [certain] issues are addressed, our regulatory system will remain vague, unreliable and subject to politically motivated decisions.
— Canada West Foundation

5 Areas of Uncertainty

Sustainability: defined in the bill as “the ability to protect the environment, contribute to the social and economic well-being of the people of Canada and preserve their health in a manner that benefits present and future generations.”

As the Globe and Mail points out, the emphasis of the bill is placed almost entirely on negative environmental impacts of a project and the need for consultation with Indigenous groups. Little to no mention is made of potential economic benefits, including things like job creation, project investment, and the growth of provincial economies. Furthermore, the many negative impacts listed are seemingly arbitrary, such as the ability of the government to “meet its environmental obligations in respect to climate change” and “the intersection of sex and gender with other identity factors.”

Consultation of Indigenous Peoples: The bill seems to impose legislation mandating the consultation of Indigenous groups without having consulted the governing bodies of the Indigenous groups impacted. At a recent meeting of the National Coalition of Chiefs (NCC) in Richmond, BC, NCC leaders signed two resolutions opposing Bill C-48 (the tanker ban on the West Coast that effectively killed Northern Gateway) and Bill C-69, with NCC member Bruce Dumont stating, “We fully support responsible resource development and pipelines…The Indigenous people here today look at resource development in a positive way. We need to think of the environment, but the people also need to be a business partner.”

Stop slamming the door in our face.
— Lax Kw’alaams Chief, November 2018

Discretionary Powers: Bill C-69 gives the Minister of Environment and Climate Change broad discretionary powers, further increasing uncertainty for major infrastructure projects. The greatest concern this poses, especially given the negative context of the bill and its focus on negative impacts as well as discretion being held by the Minister of Environment instead of the Minister of Natural Resources, is that political considerations instead of science- and rule-based processes will determine which projects go ahead. According to PR Associates, “The new Act grants the new Agency and the responsible minister much more discretion including a federal veto which gives the minister the power, before an assessment even commences, to make an order directing the new Agency not to conduct an assessment if the minister believes the proposed project would cause unacceptable effects.”

It is clear that Bill C-69 would create a conflict between the rights of provinces like Quebec to develop and manage their own natural resources and the federal government, which could try to meddle in areas of provincial jurisdiction.
Bill C-69 clearly infringes on the provinces’ jurisdiction and violates the division of powers set out in the Canadian Constitution.
— Senator Pierre-Hugues Boisvenu

Timelines: while the legislation promises shorter timeframes and an easier process, timelines shrinking is effectively wishful thinking. With more groups allowed into the consultation process, minister vetoes, and vague language opening the process to more legal challenges timelines for Canada energy projects will continue to vastly exceed the approvals necessary to build major projects. What Canada’s regulatory system needs is to be streamlined, with clear language, policy and enforcement. While our country’s government dallies and our energy sector shrinks, our largest customers and competitors continue to develop their resource bases, happy to cut Canada out.

Global Competitiveness: Canadian energy needs more customers and therefore more infrastructure. Most people familiar with our energy industry would agree that the reliance on, and subsidization of, US markets is the largest barrier to a robust, economically-viable industry. With information from GlobalData, oilprice.com says that, “the US will be leading the capital expenditure (capex) on oil and gas pipelines, with an estimated US$88.4 billion on new pipelines by 2022, while Russia  is seen spending US$78.8 billion. … In the United States, spending on natural gas pipelines will account for around 40 per cent of the total planned pipelines by 2022, with crude oil and natural gas liquids (NGL) expected to have 31 per cent and 24 per cent shares of expenditure, respectively.” Canada has lost its competitive edge in the energy industry due to poor enforcement of our existing rules, lack of government support, and inability of our leaders to promote both a robust industry as well as environmental stewardship. These should not be mutually-exclusive goals.

Back to the Drawing Board

Canada West Foundation’s article “Unstuck: Recommendations for Reforming Canada’s Regulatory Process for Energy Projects” outlines some key points for change for a regulatory system that encourages economic development, supports responsible development of our energy resources, and is clear, transparent and fair:

Four Main Pillars

  • Clear policy

  • Clear legislation

  • An empowered and trusted legislator

  • Appropriate broad, but efficient, stakeholder Input:

  • Bring back into the bill the concept of “standing,” establishing the priority of those groups or entities more directly impacted and consolidating similar messages.

  • Ensure that the consultation and hearing processes are fair, transparent and inclusive.

  • Make it clear to participants that being heard does not necessarily mean that the decision will reflect their own preferences.

  • Create a Public Intervener Office with the responsibility to synthesize the interests and views of various parties who wish to comment on the application or the regulatory process itself, to manage stakeholder input in a way that is both fair and respectful.

Canada West also states that our processes and policies need to, among other items:

  • Focus on the positive as well as the negative effects to inform balanced discussion

  • Increase time frame certainty

The Senate Committee for Energy, the Environment and Natural Resource met with the the Minister of Environment on November 6, and the bill is still in debate at the Senate level. For a daily recap of Senate debate, visit Senate of Canada.

If you are opposed to Bill C-69, please contact our Senate today to let them know how you feel.

Bill C-69 may not need to be entirely killed, but only if the Senate can make the vast and necessary changes needed to save it.

TMEP: Let's Talk Tankers - Part 3

The current dispute between Canada and Saudi Arabia feeds nicely into the third installment of our 2018 Tanker series. NDP leader Jagmeet Singh’s recent suggestion that “there are other nations we can look at in terms of access to oil (CBC News)” is almost a perfect tie-in to this segment. To recap, in part one of our series, we looked at the effect of the Trans Mountain pipeline expansion project on tanker traffic off Canada’s west coast, determining the clear majority (roughly nine to one) of oil tankers moving from Alaska through the Salish Sea to Washington State are American, and the slight increase in traffic to accommodate expanding the pipeline would be effectively inconsequential. We also looked at the volumes of tanker traffic entering eastern ports. In part two, we explored the numerous new safety enhancements which will be implemented by both Kinder Morgan Canada Inc. (TSX:KML) and the federal government to ensure the risk of ship-sourced oil spills will be negated as much as possible. While the second installment focused on TMEP tanker traffic specifically, it highlighted the enormous safety and environmental precautions Canadian energy initiatives are required to go through – a standard not matched anywhere in the world on a scale comparable to Canada’s energy sector.

In this third installment of our series, we examine the top countries Canada imports oil from and the consequences of purchasing foreign oil through the lenses of corruption, human rights, and environmental performance – a timely connection to current policies and comments made by our federal leaders – which beg for an obvious solution.

To first understand where Canada ranks in the world’s top oil producing countries, – oil meaning crude oil, all other petroleum liquids, and biofuels – as of 2017 we were ranked fourth at 4.87 million barrels per day (U.S. Energy Information Administration), or a five per cent share of the world’s total oil production, behind the U.S. at 14.86 million barrels per day, Saudi Arabia at 12.08 million barrels per day, and Russia at 11.18 million barrels per day.

Top Oil Producing Countries.png

Although we are one of the world’s top oil producing countries, lack of infrastructure connecting our oil reserves in western Canada to eastern provinces means we are extremely limited in the volumes of oil we can ship across the country, making it necessary to import oil from foreign exporters. The U.S. is our top supplier, sending 412,000 barrels per day north across the border (with much of this oil originating in Alberta and Saskatchewan), followed by Saudi Arabia at 87,000 barrels per day, and Algeria at 85,000 barrels per day being shipped here by tanker.


The U.S. exports oil to Mexico, Canada, China, Brazil, and Japan to list the top five countries. Saudi Arabia’s are Japan, the U.S., China, South Korea, India, and Singapore. Algeria exports oil mostly to France, Canada, the U.S., Netherlands, and the United Kingdom. Nigeria’s top oil export countries are India, the U.S., Spain, South Africa, and France (Canada ranks 7th). Norway’s are the United Kingdom, Netherlands, Germany, France, and Sweden (Canada ranks 9th). Canada, with access to eastern ports, could not only supply all the oil needed in eastern Canada, but also reduce the amounts of oil imported to our European allies from other regions of the world.

Purchasing foreign oil means Canada is stimulating the economies of these countries (while internally damaging Canada’s growth prospects), and supporting regimes which do not share our environmental, human rights, corruption and rule of law standards and expectations.

It is important to understand the consequences of this and exactly what our money is contributing to – a topic ignored by our politicians and activists. The oil will come from somewhere, as clearly evidenced by Canada importing from and supporting Saudi, Algerian and Nigerian regimes.


Transparency International releases an annual Corruptions Index which ranks 180 countries by perceived levels of public sector corruption according to experts and business people. Countries are rated on a scale of 0 to 100, where 0 is highly corrupt and 100 is highly clean.


In 2017, some of the countries supplying Canada with oil were awarded high or average scores, such as Norway, which was ranked third in the world with a score of 85, the United Kingdom, which was ranked eighth with a score of 82, and even the U.S., which was ranked 16th with a score of 75. Other countries, however, were determined highly corrupt, such as Iraq, which was ranked 169th in the world with a score of 18, Nigeria, which was ranked 148th with a score of 27, and Russia, which was ranked 135th with a score of 29.

Over the next 20 years, it is expected that 90 per cent of the world’s oil production will come from developing countries. Many countries which are rich in oil and gas are home to the poorest people, as the wealth stays in the hands of politicians and industry insiders. A big part of the problem is that revenues in these countries don’t get published and payments made to governments to exploit resources remain a secret. Corrupt leaders hide stolen funds unnoticed, and inadequate financial statements make it easy to disguise corrupt deals. Many companies don’t publish information and hide royalties, taxes, and fees they pay.

In 2017, U.S. President Donald Trump signed legislation to repeal anti-corruption rules for energy companies set in place by the Obama administration. The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) was introduced in 2010 to increase transparency in the energy sector, making it mandatory for all American oil, gas, and mining companies listed on the U.S. Stock Exchange to report any payments they made to foreign governments and make this information available to the public. Civilians of energy-rich countries often do not see wealth generated by industry, as it goes straight to those with political connections. These rules made it possible for civilians to hold their governments accountable. However, Trump believed the rules stunted America’s opportunity on the international stage and that American businesses were put at a disadvantage. In a vow to put American business first, Trump abolished the rules, leaving financial reporting by American energy companies unchecked.

Canada was tied with the U.K. on the 2017 Corruptions Index at a ranking of eighth in the world with a score of 82. We follow strict regulations under the Canadian Corruption of Foreign Public Officials Act (CFPOA) when it comes to reporting foreign payments and bribery provision.

Human Rights

The Human Freedom Index is co-published annually by the Cato Institute, the Fraser Institute, and the Liberales Institut at the Friedreich Naumann Foundation for Freedom. It ranks the countries of the world based on personal, civil, and economic freedom. The institutes describe human freedom as the absence of coercive restraint. We looked at how countries supplying Canada oil ranked within the index, and as with the Corruptions Index, some scored well, such as Norway, which was ranked seventh out of 159 countries with a score of 8.57 out of 10, and the United Kingdom, which was ranked 11th with a score of 8.55. However, most countries scored poorly, such as Algeria, which had a human freedoms score of 5.05, ranking 153rd out of 159, Saudi Arabia, ranking 149th with a score of 5.37, and Nigeria, which ranked 133rd with a score of 5.92.


Since 2015, Saudi Arabia has committed numerous violations of humanitarian law. As of November 2017, at least 5,295 civilians have been killed and 8,873 wounded, according to the UN Human Rights Office. Human Rights Watch shows that there have been 87 unlawful attacks by the Saudi coalition since 2015, six unlawful airstrikes between June and September 2017 which killed 33 children, and the coalition has attacked civilian factories, warehouses, and other protected sites. Dozens of activists have been arrested and are serving long prison sentences in Saudi Arabia for peacefully protesting human rights abuses. In Algeria, authorities regularly arrest and prosecute peaceful activists, including those protesting about unemployment and public services, according to Amnesty International. Citizens continue to be persecuted for their religious beliefs, and the Labour Code continues to unduly restrict the right to form trade unions. Doing business with these countries and putting wealth in the hands of their corrupt leaders and political allies will only continue to lessen the humanitarian rights and freedoms of their citizens. Canada ranked 11th on the index with a score of 8.54.

Environmental Standards

The Environmental Performance Index (EPI) is produced each year by Yale University and Columbia University in collaboration with the World Economic Forum. The EPI provides a basis for comparing, analyzing, and understanding environmental performance for 180 countries. Countries are scored and ranked based on their environmental performance in a variety of categories. Results show a positive correlation with country wealth, as meeting sustainability goals requires monetary resources to invest in human and environmental health. Of the top countries that supply Canada with oil, the U.S. rated 27th out of 180, Saudi Arabia 86th, Algeria 88th, Nigeria 97th, Norway 14th, Kazakhstan 101st, Côte d’Ivoire (Ivory Coast) 139th, United Kingdom 6th, and Azerbaijan 59th. Countries with low scores, for example Côte d’Ivoire, are falling short when it comes to emissions and waste leading to environmental contamination.

Environmental Ranking-03-03-03.png

Côte d’Ivorie’s methane emissions intensity specifically is ranked 142nd of 188 countries, and its black carbon emissions intensity is ranked 165th. According to the Fraser Institute, out of the highest earning OECD (The Organization for Economic Co-operation and Development) countries, Canada ranks 10th of 33 for environmental performance, based on air quality, water quality, greenhouse gases, air emissions, water resources, forests, biodiversity, agriculture, and fisheries. We are also the first country to commit to regulations which limit damaging and wasteful methane emissions from new and existing oil and gas facilities nationwide, and we have committed to reducing the waste of natural gas by 40 to 45 per cent in the next eight years.


Jagmeet Singh’s contention that the Trans Mountain pipeline project should not go ahead, as shown in recent social media posts in which the NDP Leader attested that a “rigged process … [made it] clear [the] pipeline should not be built (Twitter)” and that the “pipeline is a bad deal that won’t solve the problem (Twitter),” as well as numerous appearances and speaking engagements at anti-pipeline rallies does not seem to take into account that our need for oil is growing, and this oil needs to come from somewhere. As Alberta Premier Rachel Notley said in May of this year, Singh’s statements are “absolutely, fundamentally, incontrovertibly incorrect in every element (Global News).” The social license of the energy sector cannot be reduced to a single project or attribute. The bigger picture must be considered. When examining the countries currently supplying Canada with oil, human rights indecencies, corrupt political leaders, and countless blights on the environment are things that cannot be overlooked. Our high standards on corruption, environmental regulation and human rights and our reflecting high rankings across the board in numerous reputable global performance indexes in these categories make Canada the best choice for Canadian energy.

TMEP: Let's Talk Tankers - Part 2

In part one of our 2018 Tanker Series, we discussed oil tanker traffic off Canada’s West Coast, where these tankers originate, their routes, and what they carry. We also looked at the impact an increased number of tankers to support Kinder Morgan Canada Inc. (TSX:KML)’s Trans Mountain Pipeline Expansion Project (TMEP) will have on this traffic. This increase in tankers has raised concern surrounding potential of an increased risk of oil spills in the Pacific Region. In fact, a , recent Angus Reid Institute Poll found that 67 per cent of all Canadians are concerned about the potential of oil spills in Canada. In this installment, we will take a closer look at Canada’s oil spill history and the new safety measures being proposed by both Kinder Morgan and the Canadian government to negate these types of accidents.

Globally, oil spills have been in decline since the 1970s, and while they have been particularly rare in Canada, and especially on its West Coast, they have occurred periodically. The following statistics depict the frequency of these spills, as well as their locations and causes:

Source:  ClearSeas

Source: ClearSeas

Source:  ClearSeas

Source: ClearSeas


64 per cent of notable spills were on the Atlantic coast due to the sheer volume difference in vessel traffic over that of the Pacific coast, and of the spills that did occur in the Pacific region, none were tankers.

Though there has never been a serious oil spill off the West Coast in Canadian waters, the risk does exist, and those opposed to TMEP site this risk and the effect ship-sourced oil spills have on the environment, water supplies, and local marine habitats as the one of the biggest reasons for their opposition. The closest significant spill we can look toward to gauge this impact was the disastrous 1989 Exxon Valdez accident in which the oil tanker struck reef in Alaska's Prince William Sound, spilling 10.8 million US gallons of crude oil over the next few days. This incident, however, served as a catalyst for the rules and safety regulations for oil tankers to be completely overhauled and mandated globally, significantly minimizing the risk of a similar occurrence.


Canada’s Existing Preparedness and Response for Ship-source Oil Spills

Transport Canada outlines the many measures it has in place for spill prevention in Canadian waters. All vessels must:

  • Follow international rules for preventing collisions at sea
  • Have up-to-date nautical charts
  • Have a passage plan
  • Be equipped with tracking and monitoring equipment
  • Report their information

Furthermore, all tankers must be double-hulled to operate in Canadian waters, which means they have two complete layers of watertight hull surface. The inner hull is typically a few feet within the outer, which forms a redundant barrier to protect seawater in the event of a leak. Extensive inspections are also conducted. Canadian vessels are inspected under the Flag State Control Program and foreign vessels by the Port State Control Program. Law requires Canadian tankers to be fully inspected once per year.

ClearSeas outlines further measures in place to prevent spills from taking place:

  • Marine Pilots: licensed Canadian navigational experts that maneuver vessels through congested waters
  • Navigational Aids: a complex system of visual, auditory, and electronic aids to warn of barriers and mark routes
  • Tug Escorts: small navigational vessels which escort loaded tankers to sea by slowing, stopping, or steering


Kinder Morgan’s Safety Enhancements

In addition to its existing Marine Spill Response Regime, Kinder Morgan has proposed additional measures to mitigate navigation risk, including:

  • A newly established shipping channel for East Burrard Inlet off West Vancouver
  • An expansion of tug escorts of outbound laden tankers through the Strait of Georgia and at the western entrance to Juan de Fuca Strait
  • Extended pilot disembarkation to Race Rocks instead of Victoria
  • Enhanced Situational Awareness techniques such as safety calls by pilots and masters of laden tankers, tactical use of escort tug along shipping routes, boating safety engagement and awareness program

Kinder Morgan has also proposed response enhancements for the Salish Sea and Strait of Juan de Fuca; the company has the support of the Western Canada Marine Response Corporation (WCMRC), which will implement the following:

  • An investment in WCMRC of over $150 million
  • Five new response bases and new vessels added strategically along BC’s southern shipping line (three of these will have 24/7 operations)
  • This will ensure response capacity resident in Salish Sea will be 20,000 tonnes – twice Transport Canada’s Tier 4 capacity
  • Spill notifications in Port of Vancouver will have a two-hour response time
  • Spill notifications outside any port between Vancouver and the western entrance to Juan de Fuca Strait will have a six-hour response time


Liability: Who’s Responsible?

In Canada, full responsibility for an oil spill lies with the shipowner. However, there are programs set in place to help offset these costs, including The Ship-Source Oil Pollution Fund, which is funded by levies collected from oil cargo companies, and International Oil Pollution Compensation Funds.


Final Thoughts

While the risk for ship-source oil spills will exist as long as oil is transported by water (note that over 50% of global oil supply is transported via water every single day), significant and extensive measures have been taken and will continue to be taken to minimize this risk.  Canadian oil develop continues to hold the highest environmental standard globally, and TMEP is no exception. One safety advantage tankers leaving Canadian West Coast ports have is that they must have a marine pilot on board who is familiar with and has been trained in British Columbia, while many foreign vessels, such as those carrying oil between Alaska and Washington state, could be operated by a crew who have never been through the Salish Sea and are unfamiliar with its terrain. It is far more likely for these foreign-originating vessels to incur an incident which would result in a spill than for those originating in Canada.

TMEP: Let's Talk Tankers - Part 1

Years ago, few of us in the energy sector would have predicted the national conflict Kinder Morgan Canada Inc. (TSX:KML)’s Trans Mountain Pipeline Expansion Project (TMEP) has created. Deliberations over the project, which will twin the existing pipeline, in operation since 1953, between Strathcona County, AB and Burnaby, BC, have been long-winded. With the May 31, 2018 deadline for the company to abandon the project fast approaching, the question of safety in relationship to tanker traffic off Canada’s West Coast has become one of the many environmentalist hotspots.

In the first part of our 2018 Tanker series, we review tanker traffic (current and post-TMEP), where the current traffic is destined, and the associated oil volumes. Our second part will dive into spill risk and spill history in or near Canadian waters and discuss the potential risk of increased tanker traffic due to TMEP. In our final piece we will wrap everything up and hopefully include good news regarding the continuation of the project.

Where is Trans Mountain Pipeline Currently Moving Oil?

Currently, four percent of the oil coming from Trans Mountain’s Edmonton Terminal goes to the Kamloops Terminal where there are two storage tanks. 33 percent goes to the Burnaby Terminal where crude oil is delivered and temporarily stored in 13 storage tanks for distribution to Westridge Marine Terminal for shipping. 9 percent goes directly to Westridge, which in addition to shipping crude oil also receives jet fuel that is then delivered to Vancouver International Airport through the jet fuel pipeline system. And finally, 54 percent of crude oil moved by Trans Mountain Pipeline goes to the Puget Sound System in Washington for delivery to the state’s refineries at Anacortes, Cherry Point, and Ferndale.

Tanker Facts

Over half of the world’s oil travels by tanker. The capacity of these vessels is measured in dead weight tonnes (DWT), which is the total weight a ship can carry including fuel cargo, crew, and provisions. This weight can range from a few thousand DWT on smaller vessels to 550,000 DWT on the largest.

Canada’s oil tanker movements are primarily out of its seven largest shipping ports: Vancouver, BC; Quebec City, QC; Montreal, QC; Come by Chance, NF; Newfoundland Offshore; Port Hawkesbury, NS; and Saint John, NB. According to Transport Canada, these ports see approximately 20,000 tanker movements annually, and of these, 17,000 (85 percent) are off the Atlantic Coast. Below is a snapshot of the transportation of oil as cargo in Canadian waters by region:

Energy East, its logical development, and its potential benefit can be discussed another day. On the West Coast, where we will focus our discussion, Canada saw roughly 197,513 vessel departures and arrivals in 2015. Of these, 1,487 were tankers, making up 0.75 percent of total traffic. Oil on the West Coast is moved primarily through three ports: Prince Rupert, Kitimat, and the largest, Vancouver. Approximately 700,000 barrels of oil per day move through the Vancouver region via barges, and refined tankers, and each month five outbound tankers carrying crude make their way to the ocean.  TMEP is forecast to increase this number to up to 37, which will account for 14 percent of today’s marine traffic in Port of Vancouver. Aframax tankers, which have a capacity of 80,000 to 120,000 DWT or 850,000 barrels, are the largest tankers permitted to operate out of this port, and this will not change after TMEP. To accommodate the increased volume TMEP will create, Burnaby’s Westridge Marine Terminal will undergo a significant expansion based on the loading of tankers up to Aframax size. This will include the construction of three new berths, though it is unlikely they will ever all be full at the same time. After TMEP, this terminal will move as much as 630,000 barrels per day (bpd) of the total 890,000 bpd expected to be moved by Trans Mountain after the expansion project.

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Canadian vs. American Tankers

At any given time, the current ratio of Canadian tankers to US tankers in the Salish Sea (the collection of Puget Sound, the Juan de Fuca Strait, and the Strait of Georgia near Vancouver) is roughly one to nine, meaning marine traffic off Canada’s West Coast is primarily American by a large percentage. There are five refineries in Washington state versus one in British Columbia to drive this discrepancy. The following map represents tanker traffic density in the Pacific region and the route Alaskan tankers take from Alaska to Washington State. The amount of tanker traffic in the Juan de Fuca Strait (which is bordered by British Columbia to the north and Washington state to the south) is astounding – mostly due to the amount of volume INTO Washington. Approximately 1.2 million barrels per day travel through the Strait, and of these, about 500,000 barrels are en route to the Seattle area and have mostly come directly from Alaska.

Washington is heavily reliant on foreign oil imports, as the state is not permanently connected to the U.S. oil market. 46 percent of the state’s oil was imported by tanker in 2017, with the remaining amount supplied by trains and the existing Trans Mountain pipeline. In 2017, 102 million barrels of oil moved through Washington Ports. According to Washington’s Department of Ecology, up to 70 percent of oil imported by sea came directly from Alaska. This oil must cruise the entire British Columbia coastline, whereas oil tankers filling up at Burnaby’s Westridge Terminal head straight West to the open ocean.

Examining the Risk

Even after TMEP, the number of tankers carrying diluted bitumen from British Columbia will be miniscule compared to foreign tankers travelling through the same waters. However, the increase in volume has still raised some alarm, especially regarding the potential of spills and the environmental impact they bring with them. In our next installment, we will explore the history of oil spills in Canadian Waters, both on the East and West Coasts, and the safety and preventative measures being proposed by Kinder Morgan and the Canadian Government to negate these accidents.

Our Recent Success in the Rail Sector

We are excited to share the success of our recent transaction in which we advised Vada Capital and the shareholders of Caltrax Inc. in the sale of Caltrax Inc. to Cad Railway Industries Ltd. As part of the transaction process, Whitehorn prepared a detailed information memorandum, contacted prospective buyers from across North America, helped management navigate through the financial and operational due diligence process, and worked with shareholders as they managed the transaction closing process. The result was the leading railcar service provider in Western Canada.

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Contact Whitehorn today should you be contemplating making an acquisition, raising capital or selling your business. We would love the opportunity to be of the same benefit to you.