CN and CP announce Q4 and 2018 year-end results

2018 was a great year for both of Canada’s railways.

For the fourth quarter CN’s revenues were up 16 per cent, and for the year revenues were up by 9.9 per cent to a record $14.3 billion. Operating income rose during the fourth quarter to $1.45 billion from $1.3 billion, resulting in a gross margin of 38.8 per cent. For the year, CN’s operating income rose to $5.5 billion from $5.25 billion, resulting in a gross margin of 38.4 per cent. Net income before taxes for the year rose 11.6 per cent to a record $5.7 billion. Cash flow from operations increased by 7.3 per cent to $5.9 billion. “Free” cash flow, the amount remaining from operating cash flow after subtracting net capital expenditures made during the year and dividends paid to investors, decreased from $1.6 billion to $1.25 billion. (more…)

Opinion – We should insist that governments regain control over their finances

By Theo van de Kletersteeg

By now we all know that somewhere along the line, the Trudeau government decided to abandon its 2015 election campaign promise to balance the federal budget by the time voters go to the polls again in 2019. Instead, Liberals plan to continue their deficit spending and related borrowing, with Bill Morneau, our Finance Minister, saying that “Every responsible leader knows that a good plan has to be flexible enough to absorb the changes in circumstances because circumstances always change.” Really! With an economy that, to be sure, has its problems, but which nonetheless has produced ever-decreasing rates of unemployment and great corporate profits, the only “changes in circumstances” that I see are higher than anticipated revenues for the federal government and most provincial governments. So how could we go from a projected federal balanced budget to an $18.1 billion federal budget deficit that is now projected for the fiscal year ending March 31, 2019? And why is it that deficits are now projected “forever”? (more…)

Electra Meccanica making its mark in the North American electric car market

By R. Bruce Striegler

According to Jerry Kroll, CEO of Vancouver-based Electra Meccania, it all began in Italy in 1959, where Frank Reisner built custom sports cars. In 1975 the company relocated to California where it built replica cars, such as the Porsche 356 Speedster and Checker taxis. In 1982, the company moved to Vancouver, and in 2012, Kroll and the son of Frank Reisner began work on what would become the company’s first electric vehicle. In 2017, nearly 200,000 electric cars were sold in the U.S., representing less than two per cent of the total 17 million vehicles sold over a year. In Canada, that market has risen from 5,300 vehicles in 2014 to over 34,000 in 2018. The acceptance of electric vehicles has been expanding rapidly due to government subsidies, their increased range and lower battery costs, and environmental sensitivity. However, the stock of plug-in electric cars represented just about one out of every 250 motor vehicles on the world’s roads by December 2018. (more…)

Atlantic update

By Tom Peters

As container ships and cruise ships continue to get bigger, there is an urgency in several ports in Eastern Canada to accommodate these large vessels to remain competitive and to grow the business in these marine sectors.

The $205 million West Side modernization project in the Port of Saint John has been moving forward at a steady pace. The project will see the lengthening and strengthening of the pier structure at the West Side container terminal as well as the deepening of the main channel. The project is expected to be complete in 2023. Presently, radiation portals are being installed which will allow Canadian Border Services Agency (CBSA) a seamless transition with no impact to operations during the major wharf construction, says Paula Copeland, the Port’s Director of Communications and Corporate Social Responsibility. At the same time, a new bridge is being constructed to allow container wharf access as a portion of the existing wharf will be demolished to build the new berth. Additionally, a number of electrical upgrades are being completed for power supply to future crane and reefer facilities. A summary of other work to date includes the removal and demolition of outdated infrastructure; dredging and disposal of silt; placing and leveling of rock fill for caisson and mattress; construction and installation of caissons and piles; and connecting of existing wharf to new piles. (more…)

Vancouver terminal expansion happening against a backdrop of increasing land shortage

Vancouver terminal expansion happening against a backdrop of increasing land shortage

By R. Bruce Striegler

Vancouver is the third-largest container port in North America and the 47th-largest in the world. It accounted for 42 per cent of the cargo handled by all Canadian ports in 2017, generating revenues of $250 million and handling $100 billion worth of container cargo each year which is expected to triple by 2030. However, there is rising concern within real estate circles and the marine shipping industry: the region does not have enough industrial land with access to both rail and water. Existing terminals have been keeping up with the capacity demands, but if growth continues at the existing pace, and without additional container terminal capacity, the fear is that B.C. ports will lose their competitive edge with more global shipping lines diverting imports and exports through competing American West Coast, Gulf Coast and Eastern Seaboard ports. Port of Vancouver estimates that the additional cost to Canadian importers and exporters to move goods through the U.S. would be $80 million annually, starting in 2030. In the first half of 2018, the Port hit record container volumes of 1.64 million TEUs (20-foot equivalent units) – a five per cent increase in volume over 2017, with export traffic up by 6.6 per cent, and imports up by 3.7 per cent.

(more…)

Surging oil-by-rail brings provincially owned oil trains as a “stop-gap” – until more pipeline capacity is built

By R. Bruce Striegler

Canada’s oil industry has been facing record-low prices for its exports, a glaring lack of insufficient pipeline capacity to bring its product to market, and an uncertain long-term outlook. None of these factors, however, are stopping Alberta oil producers from increasing production, and relying more heavily than ever on rail to move the product. According to Statistics Canada, the volume of oil on Canada’s railroads has soared by 64.6 per cent in just the past year. And in the past seven years, the number of rail cars carrying oil across Canada has quadrupled. As one pipeline project after another fails to launch, the industry is relying more heavily on rail than ever to ship its oil. (more…)