Trans Mountain expansion faces problems.
Photo: Contributed - transmountain.com

More roadblocks?

Trans Mountain expansion faces problems.

No politics for Zuckerberg

Facebook CEO Mark Zuckerberg says his quest this year to visit every state he hadn't before is about building relationships, not politics.

The 33-year-old billionaire wrote in a Facebook post that some users have asked if the trip means he's running for public office. Zuckerberg says he's not running for anything. Instead, he says the visits around the country are in order "to get a broader perspective."

He said Facebook is looking to connect users beyond people they already know, and he wrote that it may be important that the platform connects users to "people you should know." He describes those as people outside a user's social circle who he says "provide a new source of support and inspiration."

Facebook is exploring models for building those connections, Zuckerberg said.

He wrote the post Sunday from Newport, Rhode Island, where he was spotted with his wife, Priscilla Chan. Massachusetts real estate broker Gisele Borghani said she and her family were walking on a crowded sidewalk to Newport's Easton's Beach when they nearly bumped into the couple.

"I said, 'Hi,' and he smiled back and she smiled back," Borghani said. "They were just minding their own business like two normal people."

She said Chan was wearing a baseball cap from Maine, where the couple was spotted a few days ago . The couple was flanked by two bodyguards, who were walking about 10 feet back, she said.

Borghani said the resort town was packed with people enjoying the beautiful weather and the city's oyster festival.


Ford CEO replaced

Ford is replacing CEO Mark Fields as it struggles to keep its traditional auto-manufacturing business running smoothly while remaking itself as a nimble, high-tech provider of new mobility services.

The 114-year-old automaker said Fields is retiring at age 56 after 28 years at the company. Fields will be replaced by Jim Hackett, who joined Ford's board in 2013. Hackett has led Ford's mobility unit since March of last year.

In three years as CEO, Fields began Ford's transition from a traditional automaker into a "mobility" company, laying out plans to build autonomous vehicles and explore new services such as ride-hailing and car-sharing. Under Fields, Ford achieved a record pretax profit of $10.8 billion in 2015 as SUV and truck sales soared in the U.S.

But there were rumblings that Fields wasn't focused enough on Ford's core business, as popular products like the Fusion sedan grew dated and Ford lagged behind rivals in bringing long-range electric cars to the market. The stock price sagged, and electric car maker Tesla Inc. even passed Ford in market value. Ford's stock price has fallen almost 40 per cent since Fields became CEO in July 2014.

Hackett is the former CEO of Steelcase Inc., one of the world's largest office furniture companies. He is credited with transforming that company, in part by predicting the shift away from cubicles and into open office plans. But he first had to cut thousands of jobs and moved furniture production from the U.S. to Mexico to stem massive losses at the company.

Ford Motor Co. Executive Chairman Bill Ford said in an interview that Hackett is the right person to lead Ford as it expands into new business areas, like making self-driving shuttles, because he's a "visionary" who knows how to remake a business. Car companies are facing increasing competition from Google, Uber and others as they try to plot their next moves.

"These are really unparalleled times, and it really requires transformational leadership during these times," Bill Ford said.

Pacific pact to move ahead

The Pacific Rim trade ministers meeting in Vietnam committed Sunday to move ahead with the Trans Pacific Partnership trade pact after the United States pulled out.

New Zealand Trade Minister Todd McClay said the remaining 11 TPP countries are open to others joining provided they accept the trade agreement's high standards on labour and environmental protection. He said the door remains open to the U.S., even after President Donald Trump withdrew from the pact in January, saying he prefers bilateral free trade deals.

"It's clear that each country is having to consider both economic values and strategic importance of this agreement, but in the end there are a lot of unity among all of the countries and a great desire to work together to come up with an agreement among 11 that not only delivers for all of our economies and the people of our countries, it's also open to others countries in the world to join if they can meet the high standards in the TPP agreement," McClay told reporters.

Since the U.S withdrawal, Japan and New Zealand have been spearheading efforts to revive the deal. In its current form, the TPP requires U.S. participation before it can go into effect. That means the remaining countries would need to change the rules for any deal to go ahead, and it would be significantly smaller without the involvement of the world's largest economy.

The 11 countries represent roughly 13.5 per cent of the global economy, according to the World Bank.

In a statement, the trade ministers said they agreed to launch a process to assess options to bring the agreement into force "expeditiously, including how to facilitate membership for the original signatories."

The ministers have tasked their trade officials to present the assessment to their leaders when they meet for an annual the Asia Pacific Economic Cooperation summit in Vietnam in November, which will also include Trump, Russian President Vladimir Putin and Chinese President Xi Jinping.

They also underlined their vision for the TPP to expand to include other economies, saying these efforts would address concerns about protectionism, contribute to maintaining open markets, strengthening the rules-based international trading system, increasing world trade and raising living standards.

Vietnam and Malaysia had been expected to be beneficiaries from the original TPP with greater access to U.S. markets and investments. The TPP was championed by former President Barack Obama and was seen as a counterbalance to China's growing influence in the region.

U.S. Trade Representative Robert Lighthizer, making his international debut since taking office a week ago, defended Trump's decision to pull out of the TPP.

"We expect to engage with members here in many cases on bilateral basis," he told reporters. "The president made the decision, which I certainly agree with, that bilateral negotiation is better for the United States than multilateral negotiations."

He added: "But we certainly expect to stay engaged and I believe that at some point that there'll be series of bilateral agreements with willing partners in this part of the world."

He rejected criticism that the Trump administration was embracing trade protectionism. "Our view is that we want free trade, we want fair trade, we want a system that leads to greater market efficiencies in the world," he said.

On Monday, the China-led 16-member Regional Comprehensive Economic Partnership will meet in Hanoi to further their discussions on a separate deal seen as an alternative to TPP. It is expected to be finalized by the end of this year.

"I think confidence we have shown in this meeting for the multilateral trading system for regional economic co-operation within APEC can be a very good and strong signal that we are united and we are steadfast in fighting trade protectionism and reducing trade risks," said Chinese Deputy Trade Minister Wang Shouwen.


Pipeline plans face blocks

Kinder Morgan's plan to raise money for its Trans Mountain expansion through an initial public offering could not come at a more awkward time.

In addition to ongoing protests and federal court challenges, a vote recount in B.C. could tilt the balance of power, giving the Greens or NDP a chance to bog down the $7.4-billion project. The recount begins Monday.

Alberta's securities regulator is also reviewing Kinder Morgan's regulatory filings upon a request from Greenpeace, who said it believes the documents overestimate growth in Asian oil demand and don't go far enough in disclosing climate change-related risks.

The energy giant faces a big hurdle in its goal of raising $1.75 billion in what would be one of the biggest IPOs ever on the Toronto Stock Exchange. It is expecting to complete the offering in the last week of this month.

Goldman Sachs analyst Theodore Durbin said in a note the IPO move was a "surprise," since Kinder Morgan management had previously said a joint venture would be preferred.

Adam Scott, a senior campaigner with environmental group Oil Change International, said he took it as a sign that the company was struggling to raise funds when it scrapped plans for a joint venture.

"There's still substantial legal risk to the project," said Scott. "There's also reputational risk. I think that may be why there's no equity firms willing to step up and take a chunk."

Kinder Morgan didn't respond to a request for comment on financing issues, but said it was moving ahead with all aspects of planning for the project. In filings it said the IPO was the "superior path" over the joint venture.

Terry Marshall, senior vice-president of corporate finance at Moody's Investors Services, said there are advantages for Kinder Morgan with the IPO, including maintaining greater control of the project and the profits that would come from it, as well as likely securing a better valuation.

"It's economically a very attractive project," said Marshall. "It's just getting it built in this environment is challenging."

Opponents have also expanded their campaign against Trans Mountain, shifting their sights to the financial institutions backing it.

The Treaty Alliance Against Tar Sands Expansion launched a divestment campaign earlier this month against 17 banks that fund oilsands pipelines. Those banks include CIBC, BMO, Scotiabank, TD Bank and RBC.

"I don't think it scares people away," said Marshall. "It's unfortunate, the banks are well aware of it, but I don't think those protests, in and of themselves, would prevent the financing from being provided."

Still, Jeffrey Harris, founder of venture capital firm Global Reserve Group, said the potential project risks could change the financial picture for some investors.

"They change their expected rate of return, and because of that, some projects that may have gotten funding may not get funding because people see it as a little more risky," said Harris.

"I don't know anybody who says, 'Oh my God, Canada, don't go there.' It's not that by any means," he added. "It's the change in the economics that will attract capital or not."

Robert Johnston, chief executive of political risk consultancy Eurasia Group, said he sees campaigns targeting the financing of Trans Mountain as more of a nuisance than a serious threat.

"If the case against Kinder Morgan is that there's no market in Asia, I think that case would be pretty easy to disprove," he said.

But issues relating to climate change are taking on greater importance at the financial level, Johnston said.

"Carbon disclosure is well beyond a hassle. It's a material risk," he said. "It's something companies have to factor into their cost base and be transparent about."

Adnan Amin, director-general of the International Renewable Energy Agency, said the risk of fossil fuel infrastructure becoming stranded assets is increasing with the rapid expansion of renewable energy projects.

"Investing in very heavy, long-term expensive infrastructure for the future needs to be reassessed very thoroughly," said Amin.

Kinder Morgan still has yet to render a final investment decision on the project, which would triple the capacity of an existing pipeline from Edmonton to Burnaby. But it has said it is aiming to start construction in September.

'Canada always prevails'

A made-in-Canada solution to help softwood producers and workers weather the storm of U.S. duties has been delayed at least until the end of May.

It has been almost a month since the U.S. Department of Commerce slapped import duties of three to 24 per cent on Canadian softwood, arguing Canada unfairly subsidizes its industry by keeping the price of logging artificially low.

Cabinet discussed a package of options for up to $1 billion in aid for the softwood industry earlier this week, but negotiations with industry and provincial governments are still underway.

A source with knowledge of the negotiations says Natural Resources Minister Jim Carr had hoped to have the plan ready to present publicly by the end of this week, but things didn't quite come together in time.

The House of Commons is off next week for a break week, which means the earliest cabinet can discuss and finalize the plan now is May 30.

Multiple sources say there were meetings at the provincial level to discuss the package options this past week. A Quebec source told the Canadian Press the government was reluctant at first to do any kind of aid package, but has since changed its mind.

Quebec and Ontario have been pressing Ottawa to get loan guarantees ready since at least February.

The Americans have been wrong about Canada's softwood industry before, and this time is no different, Prime Minister Justin Trudeau said Friday.

"The fact that every time the U.S. has done this over the past decades they've been shown to be wrong in doing that and we know that we're going to be able to continue to stand and defend Canada's industry," Trudeau said during a stop in Surrey, B.C.

Trudeau said the import tariffs the U.S. Department of Commerce slapped on Canadian softwood imports last month are unfair and punitive, and that Canada won't back down on the issue without a fight.

Hearing, dementia linked?

As National Hearing Month puts all things auditory on our sonars, Nexgen Hearing wants to stress how important getting your ears checked can be.

Tom Millar, a hearing professional at Nexgen in West Kelowna, warns that while degrading sonic sensibilities may seem like nothing more than an inconvenience, hearing loss can have some very serious side effects.

“We use to look at hearing loss as a kind of minor inconvenience, but [now we know] people have higher risks of hospitalization … just because they’re not as aware of their surroundings,” he says.

Millar is referring to new research that suggests hearing loss can be an early indicator of Alzheimer’s disease and other dementia.

As Millar explains, someone living with untreated hearing loss will have more trouble understanding conversations, and have to use more brainpower to unpack the sounds around them.

Since they’re putting more stress on their brain in an effort to properly understand, they will generally have more difficulty recalling and storing that information later on.

“Quite often people who go for cognitive testing … in a lot of those cases the people with hearing loss will score poorer on those results because of their hearing difficulty,” Millar says.

While the possible links between hearing loss and dementia are still tenuous, Millar says untreated hearing can lead to other problems in a person’s life.

Far and away the most common side effect is having to strain to understand conversations. For people with hearing loss, Millar says it often feels like everyone is mumbling, especially in groups or when there’s background noise.

This difficulty understanding can cause people to start avoiding groups, and isolating themselves as the problem worsens. 

“There’s a lot of lifestyle constraints people put on themselves because of hearing loss, and that increased isolation will often have other health effects,” Millar says.

That’s why identifying and treating hearing loss is so important, he adds.

In an effort to highlight that importance, Nexgen is offering free hearing screenings at its Kelowna and West Kelowna offices all day long May 30.

Screenings, Millar says, are the “first step” to treating the problem, and anyone who comes in for a free screening May 30 will be booked for a complimentary, in depth appointment if Nexgen professionals discover potential issues.

Millar says treating hearing loss can do wonders for a person both in their daily life and interactions, as well as for their long-term cognitive health.

“Improving your ability to hear and understand early on will improve your quality of life and keep you engaged longer, so that you don’t go down that road of losing connection with friends and relatives,” he says.

For more information on Nexgen’s free screenings, visit them online.

Inflation holds at 1.6%

The country's annual inflation rate once again rang in at 1.6 per cent last month as higher energy costs offset a seventh consecutive decline in grocery prices, Statistics Canada said Friday.

The agency's consumer price index for April identified higher prices for gasoline and natural gas as the biggest upward drivers in year-over-year inflation.

On the other hand, fresh produce and clothing applied the most downward pressure on the inflation rate.

The annual inflation rate matched Statistics Canada's reading for March but was below a consensus estimate of 1.7 per cent, according to Thomson Reuters data. In B.C., the inflation rate inched up by a tenth of a point to 2.1 per cent.

Prices at the pump were 15.9 per cent higher last month, and the cost of natural gas rose 15.2 per cent more, Statistics Canada said.

Overall food prices were down 1.1 per cent as prices for fresh fruits fell 6.2 per cent, fresh vegetables slipped 5.9 per cent and meat dropped 2.1 per cent.

In addition, the cost of kids' clothing was 6.2 per cent lower and women's clothes cost 2.8 per cent less in April, compared with a year earlier.

Ice that burns?

Commercial development of the globe's huge reserves of a frozen fossil fuel known as "combustible ice" has moved closer to reality after Japan and China successfully extracted the material from the seafloor off their coastlines.

But experts said Friday that large-scale production remains many years away — and if not done properly could flood the atmosphere with climate-changing greenhouse gases.

Combustible ice is a frozen mixture of water and concentrated natural gas. Technically known as methane hydrate, it can be lit on fire in its frozen state and is believed to comprise one of the world's most abundant fossil fuels.

The official Chinese news agency Xinhua reported that the fuel was successfully mined by a drilling rig operating in the South China Sea on Thursday. Chinese Minister of Land and Resources Jiang Daming declared the event a breakthrough moment heralding a potential "global energy revolution."

A drilling crew in Japan reported a similar successful operation two weeks earlier, on May 4 offshore the Shima Peninsula.

For Japan, methane hydrate offers the chance to reduce its heavy reliance of imported fuels if it can tap into reserves off its coastline. In China, it could serve as a cleaner substitute for coal-burning power plants and steel factories that have polluted much of the country with lung-damaging smog.

Estimates of worldwide reserves range from 280 trillion cubic meters (10,000 trillion cubic feet) up to 2,800 trillion cubic meters (100,000 trillion cubic feet), according to the U.S. Energy Information Administration. By comparison, total worldwide production of natural gas was 3.5 billion cubic meters (124 billion cubic feet) in 2015, the most recent year available.

Farmers wary of trade fight

A sizable majority of rural Americans backed Donald Trump's presidential bid, drawn to his calls to slash environmental rules, strengthen law enforcement and replace the federal health care law.

But last month, many of them struck a sour note after White House aides signalled that Trump would deliver on another signature vow by edging toward abandoning the North American Free Trade Agreement.

Trump's message that NAFTA was a job-killing disaster had never resonated much in rural America. NAFTA had widened access to Mexican and Canadian markets, boosting U.S. farm exports and benefiting many farmers.

"Mr. President, America's corn farmers helped elect you," Wesley Spurlock of the National Corn Growers Association warned in a statement. "Withdrawing from NAFTA would be disastrous for American agriculture."

Within hours, Trump softened his stance. He wouldn't actually dump NAFTA, he said. He'd first try to forge a more advantageous deal with Mexico and Canada — a move that formally began Thursday when his top trade negotiator, Robert Lighthizer, announced the administration's intent to renegotiate NAFTA.

But NAFTA and other deals have been good for American farmers, who stand to lose if Trump ditches the pact or ignites a trade war. The United States has enjoyed a trade surplus in farm products since at least 1967, government data show. Last year, farm exports exceeded imports by $20.5 billion.

"You don't start off trade negotiations ... by picking fights with your trade partners that are completely unnecessary," says Aaron Lehman, a fifth-generation Iowa farmer who produces corn, soybeans, oats and hay.

NAFTA did lead some American manufacturers to move factories and jobs to Mexico. But since it took effect in 1994 and eased tariffs, annual farm exports to Mexico have jumped nearly five-fold to about $18 billion. Mexico is the No. 3 market for U.S. agriculture, notably corn, soybeans and pork.

The U.S. has run a surplus in farm trade with Mexico for 20 of the 23 years since NAFTA took effect. 

40% eat lunch at desk

Almost 40 per cent of Canadians are eating lunch at their desks — a number that reflects increasing workplace pressures as well as shifting attitudes toward meals, says the lead author of a new study gauging the country's eating habits.

The survey, which was conducted by Nova Scotia's Dalhousie University, found that 39 per cent of respondents ate at their desks, compared with 37 per cent who ate lunch at home. The remaining 24 per cent had lunch in a cafeteria or in a kitchen-type room.

"It really speaks to how pressured workers are," said lead author Sylvain Charlebois, a professor in food distribution and policy at Dalhousie.

"To take the time to go eat any meal at work is slowly becoming a luxury."

Charlebois and his team found that 72 per cent of respondents packed their own work lunches, while 24 per cent either bought their lunches to eat outside or ate at restaurants.

People in Atlantic Canada eat lunch at their desks most often, at almost 50 per cent, the study suggested.

They're also much more likely to eat alone, with 68 per cent reporting doing so.

Charlebois said the discrepancy in Atlantic Canada remains "a mystery," although he cited an older population and longer distances to travel as possible factors.

Only 36 per cent of Quebecers eat lunch alone, while the figure is 61 per cent in Ontario.

When it comes to dinner, Canadians are increasingly turning to ready-made meals or eating out at restaurants, the study found.

Some 41 per cent of survey respondents reported doing so once or twice a week, while three per cent said they did so every day.

Only 18 per cent of participants said they never ate at restaurants or bought ready-made meals for dinner.

Bombardier, Boeing clash

The next potential Canada-U.S. trade dispute was unfolding in a Washington courtroom Thursday as aerospace actors clashed over details that could hold implications for the global trade in mid-sized airplanes.

The U.S. aeronautics powerhouse Boeing was at a hearing arguing for duties on Bombardier aircraft, insisting its smaller Canadian rival receives government subsidies that give it an illicit toehold in the international market.

Lobbyists, lawyers, and aerospace executives crowded the courtroom for a little battle playing out in the broader context of the day's larger trade news: the U.S. announcement that NAFTA renegotiations will start in the next 90 days.

Bombardier has made it clear that its true goal is to grab half the international market share for 100-to-150-seat aircraft, according to Boeing, which argues its rival has received an unfair head start from Canadian taxpayers.

Boeing vice-president Raymond Conner said the sale of cheap, subsidized planes to Delta helped build momentum for Bombardier to enter a new market. If Bombardier reaches its stated goal, he said, it would squeeze Boeing from that market and cost the company US$330 million a year in annual sales.

"Today we are at a critical moment," Conner told the seven-member U.S. International Trade Commission. "If you don't fix it now, it will be too late to do anything about it later... What we want is competition that is fair...

"You guys can fix this before it is too late."

Boeing has petitioned the U.S. Commerce Department and the U.S. International Trade Commission to investigate subsidies of Bombardier's CSeries aircraft. Boeing lawyers argued Thursday that Bombardier's own words prove it was rescued financially by multibillion-dollar assistance from the Quebec government.

The process is similar to the one that has led to duties on Canadian softwood lumber. These are among the looming trade disputes with the U.S., as NAFTA talks could raise the heat on differences over dairy, dispute resolution, auto parts and other issues.

Bombardier representatives countered that their planes never competed with Boeing in a sale to Delta airlines — which the American rival describes as a seminal moment.

Bombardier lawyer Peter Lichtenbaum said the plaintiff is a global powerhouse that hasn't lost any sales as a result of Bombardier, has an enviable order backlog and doesn't even compete with Bombardier in the sales campaigns it has complained about.

"Boeing's petition in this case is unprecedented in its overreach," he said. "If this is a case of David vs. Goliath, Boeing has cast itself in the wrong role."

Seniors are borrowing more

At 66, Wayne Hystad is signing on for a new mortgage in a move to consolidate his debt and allow him to keep his Edmonton condominium.

"It means I keep my place and I'll just have a higher mortgage, which I can handle," he says. "I can live now."

But he has a message for other retirees thinking about borrowing money: If you can't pay for it, don't buy it.

Hystad, who sank into depression after he separated from his wife in 2009 and she died in 2011, said his mortgage was paid, but he got into trouble with a line of credit and credit cards, racking up thousands in debt.

"Through my depression I did the stupid spending," he said. "It was my fault. There's no excuses."

However Hystad isn't alone among seniors who are borrowing more.

According to a report by Equifax, debt excluding mortgages held by those over 65 averaged $15,244 in the fourth quarter of last year.

That was below the Canadian average of $22,113 — but those over 65 posted the highest percentage growth compared with the fourth quarter of 2015 at 6.1 per cent.

Scott Hannah, president of the Credit Counselling Society, says the number of people aged 55 or older seeking help at his organization has grown to 21 per cent of the society's client base compared with five per cent 20 years ago.

"That's significant and worrisome because unlike people who are working like you and me, many of these people are on fixed incomes," he says.

Hannah says if a senior is thinking about borrowing they need to ask themselves why are they borrowing — is it for a need or is it for a want?

"We see things like people taking on debt because they need a new roof and I can appreciate that because if the roof is shot you've got to fix the roof."

But, he adds, it's important to consider alternative solutions, depending on your situation.

"Does it make sense to stay, for example, in a home that you can't afford?" he says.

Larry Moser, a divisional manager at BMO InvestorLine, says it's important for retirees thinking about borrowing money to understand how they are going to pay it back or if they are going to let their estate repay the money after they die.

He says for retirees looking to borrow, the most obvious way if they own their home is to access that equity.

"A lot of retirees are house rich and cash poor and perhaps that's the most easily accessible option," says Moser, adding that if a retiree is looking to borrow money, they should have an exact amount in mind.

"The danger of putting a line of credit against your house is if your intention is to only borrow $200,000, but you put a $500,000 line of credit against your house, you have to have the discipline to tell yourself my intention was to only borrow $200,000."

Moser notes that in most cases of retirees looking to borrow money, it isn't because they want to, but rather it's something they need to do.

As for Hystad, he says he's back on track and looking forward to saving a little so he can travel.

"And pay cash for something I want."

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