Parkland Fuel buying Chevron Canada fuel business for nearly $1.5B

The Chevron refinery in Burnaby, B.C.
Ward Perrin / Vancouver Sun

Parkland Fuel Corp. says it will pay $1.46 billion to acquire Chevron Canada’s fuel business, including 129 gas stations in the Vancouver area and a refinery in Burnaby, B.C.

The Red Deer-based company says the new stations will complement its existing 44 Chevron-branded sites in British Columbia and cement its position as one of Canada’s largest fuel retailers with more than 1,800 service stations.

The sale also involves 37 commercial cardlock and three marine fuelling locations, as well as three terminals in B.C. and a wholesale business that includes aviation fuel sales to the Vancouver International Airport.

Parkland CEO Bob Espey says the acquisition will support Parkland’s existing operations in B.C., leading to between $35 million and $50 million in annual cost savings after closing.

Parkland plans to issue 24 million shares to raise $660 million to help finance the deal.

The deal is expected to close by mid-year.

Chevron Sells Canada Refinery, Gas Stations in $1.1 Billion Deal

(Bloomberg) — Chevron Corp. agreed to sell the Burnaby refinery and gas stations in British Columbia to Parkland Fuel Corp. for about C$1.46 billion ($1.1 billion) as Chief Executive Officer John Watson unloads assets.

The sale includes 129 retail service stations, 37 commercial cardlock and three marine fueling locations, Red Deer, Alberta-based Parkland said in a statement Tuesday. Parkland also is picking up terminals throughout British Columbia and a wholesale business that provides aviation fuel to Vancouver International Airport.

The sale is part of Watson’s plan to raise as much as $10 billion from asset sales this year. The company has been marketing everything from Asian oil fields to African storage facilities to generate cash. For Parkland, the deal complements the 44 Chevron-branded sites it has in the province, and builds on the $750 million acquisition of CST Brands Inc.’s Canadian assets that it expects to complete this quarter.

Shares of San Ramon, California-based Chevron were little changed at $105.61 at 4:33 p.m. in late trading in New York. Parkland fell 0.7 percent to C$28.86 in regular trading in Toronto, before the stock was halted pending the announcement.

–With assistance from Joe Carroll

©2017 Bloomberg L.P.

BRIEF-Parkland to buy Chevron Canada’s downstream fuel business

Parkland Fuel Corp:

* Parkland to acquire Chevron Canada’s downstream fuel

* Parkland Fuel Corp – subject to satisfaction of customary
closing conditions, parkland will pay approximately $1,460

* Parkland Fuel Corp says Parkland expects to reduce its
leverage ratio to well within its previous guidance by 2019

* Parkland Fuel Corp says Parkland expects to replace bridge
facility with alternative longer term debt prior to closing of

* Parkland Fuel – total identified annual run-rate
synergies of $35-$50 million, resulting in total estimated
normalized ebitda of $265-$280 million from deal

* Parkland Fuel Corp – Parkland will pay an estimated $186
million in working capital for acquired business

* Parkland fuel – intends to enter into working capital
financing agreement with merrill lynch commodities to finance
hydrocarbon inventory & receivables

* Parkland Fuel corp says 30%+ accretion to 2016
distributable cash flow per share on a run-rate, normalized
basis from deal

* Parkland Fuel- entered into agreement with underwriters
bookrun by TD Securities inc., National Bank Financial inc., to
sell about 24 million shares

* Parkland Fuel Corp – entered into an agreement with
chevron canada limited to acquire all of shares of chevron
canada r&m ulc

* Parkland Fuel Corp – Parkland expects to close cst
acquisition in q2 2017
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How the CFTA can revolutionize Canada’s procurement system

Lee Barter is a partner with Deloitte, where he leads the Sourcing and Procurement Consulting practice.

The Canadian Free-Trade Agreement (CFTA) was announced last week, shedding light on the mechanics for liberalizing domestic trade. While the CFTA ushers in several positive developments, the clauses opening up government procurement – a pot totalling 25 per cent of government spending – require more work to achieve the agreement’s ambitions.

The need for improved government procurement rules has assumed greater urgency following the recent approval of the Canada-EU trade agreement (CETA). Without the CFTA, Canadian businesses would have been disadvantaged against European firms outside their home provinces. A provision within CETA requires that Canada create a single point of access for government tenders. This sweeping provision will funnel $100-billion of spending into an online portal for the convenience of European companies that can soon bid for government contracts with the same standing as Canadian companies. The new CFTA stipulates that the forthcoming CETA portal may be adapted to advance domestic goals also.

Viewed by some policy makers as a threat to Canadian firms in the face of rising European competition, the CETA portal had to be good, but not too good (what if EU companies started winning too often?). However, the CFTA appropriately recasts the single point of access in domestic terms and allows policy makers to reimagine how government purchasing can serve Canada’s interests, not just comply with international obligations.

If the opportunity is grasped, a national tendering system offers a pathway to modernization. For example, most government bidding is done offline, denying government, businesses and citizens a vast amount of valuable information. In this vacuum, no Canadian government can presently muster the data to define a “local supplier,” let alone detail how much spending goes to these businesses (ironic, considering the CFTA was built to eliminate biases favouring these firms).

The value of procurement data goes beyond tallying winners and losers. Digitizing competitions could save money for public agencies, particularly small entities that pay more for goods and services compared with large governments. Digitizing tender packages – time-consuming for buyers and frustrating for suppliers – could lead to greater innovation by sharing best practices and collecting supplier feedback (blunting a spike in bid protests in the process).

The benefits of bringing public buying into the digital age extends to suppliers, particularly innovative startups that are largely shut out of government contracting. The time-consuming process of responding to government tenders systematically tilts the procurement process in favour of large enterprises, including – perhaps inadvertently – European multinationals. Allowing bidders to maintain and reuse a digital profile would reduce paperwork and allow small businesses to compete for – and win – a larger share of government contracts.

Implied by combining CFTA requirements into the CETA portal is that Canadians won’t be disadvantaged against Europeans for local contracts. But a true levelling of the playing field would help Canadian firms find and win business abroad. A tiny fraction of Canadian businesses export in spite of hard-won trade concessions to open up foreign markets. A bolder, more courageous approach would promote and support domestic firms bidding for government contracts in Europe and beyond.

The power of the public purse is massive, yet poorly understood. The Organisation for Economic Co-operation and Development estimates that government purchases – from airplanes to paper clips – represent 12 per cent of Canada’s GDP. Governments spend money to deliver programs and services to Canadians, but the potential for second-order benefits from the way it is spent, is real.

The cost of our broken procurement system is likewise clear, which is why it is critical that government follows through on the promise and potential of the CFTA. Today, Canada’s most dynamic companies look to governments such as Britain or the United States, who are vastly more open to acquiring innovative new products or co-developed solutions. When Canadian businesses can’t access local procurement markets, companies miss a vital opportunity to gain a strategic customer and Canadians miss out on better services. The CFTA creates a chance for a more digital and integrated procurement policy to emerge in Canada – we must grasp it.

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Canada’s landmark polygamy case goes to court Tuesday

Winston Blackmore, leader of the breakaway Mormon community of Bountiful in southeastern British Columbia, refused to acknowledge the charge against him, forcing the court to record a not guilty plea, the Canadian Broadcasting Corp reported.

Blackmore, 61, is accused of practicing “a form of polygamy” or “a kind of conjugal union” with 24 women between 1990 and 2014, according to court documents.

Co-accused James Oler, 53, faces the same charge involving four women between 1993 and 2009, the documents show. Oler entered a not guilty plea.

The British Columbia government has been weighing prosecution since the early 1990s under Canada’s century-old polygamy law.

But despite multiple police investigations, it had declined to pursue polygamy charges due to concerns that doing so would violate constitutional freedoms of religion.

In 2009, however, the government charged Blackmore and fellow sect member Oler with polygamy. Two years later, the Supreme Court affirmed that these charges were constitutional.

Blackmore’s defense counsel argues that the polygamy law violates the community members’ religious rights.

The two men face one count each of polygamy. None of the charges have been proven in court. The case is being heard in Cranbrook, British Columbia and is expected to take several weeks.

(Reporting by Anna Paperny in Toronto; Additional reporting by Nicole Mordantin Vancouver; Editing by Stephen Coates)

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Slims River: Climate change causes “river piracy” in Canada’s Yukon

A team of scientists say a melting glacier in Canada’s Yukon has caused a river to completely change course.

Their findings, published in Nature Geoscience, show how climate change can cause surprising geological events.

The Slims River once flowed out to the Bering Sea, but now it flows into the Kaskawulsh River instead.

This phenomenon, known as “river piracy”, typically takes centuries but the study documented it over the course of one spring.

“Nobody’s ever seen a river piracy occur in modern times, at least to my knowledge,” lead author Dan Shugar told the BBC.

The geoscientist at the University of Washington Tacoma says he and six researchers from Canadian and American universities had planned to study the Slims River last summer.

But when they arrived in the Yukon it was barely flowing. They discovered that a small channel had eroded in a large glacier that fed a number of small lakes.

The glacial lakes used to feed two river systems – the Slims River and the Kaskawulsh River – but when water from one lake poured through the channel into another, it cut the Slims off from its water source.

The event is known as river piracy or stream capture, and can takes thousands of years. But the researchers documented the piracy of the Slims River in just one spring.

Prof Shugar said his colleague, John Clague, at Simon Fraser University in British Columbia, had predicted this event just a decade before because of the area’s unique geological formation. But no one knew when or how quickly the stream capture would occur.

River gauges show an abrupt four-day drop in late May 2016, and continued to drop over the summer, the study found.

By the time Prof Shugar and his associates got there, the Slims was basically “a long, skinny lake”.

“The Slims river was essentially cut off from how it was flowing before,” he said.

The change in the river’s flow affected the whole landscape. Sheep are now grazing on the exposed river bank, while other rivers in the area are running high. Fish population, wildlife and lake chemistry will continue to be affected, the study noted.

In the big picture, Prof Shugar said, the piracy of the Slims is a reminder that climate change “may bring surprises that we are not appreciating fully and that we’re not necessarily prepared for”.

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Air Canada apologises after ‘bumping’ boy, 10, from flight

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Canada’s largest airline, Air Canada, has apologised after giving a 10-year-old boy’s seat to someone else.

Cole Doyle and his family had planned a trip to Costa Rica but the first leg of the journey was overbooked.

The family travelled to two other airports and spent an extra C$1,000 (£590) to get a flight. The airline has now offered them compensation.

It comes after video of a man being dragged from a US flight brought overbooking to public attention.

Dr David Dao has said he will sue United Airlines after he lost two front teeth and his nose was broken when the airline called security officers in to help remove him from the plane.

He had refused to leave when the airline asked for volunteers to make way for staff members.

In response to the huge backlash the company faced on social media, United said it would allocate seats for staff at least an hour in advance, in future.

It also promised it would no longer ask law enforcement officers to remove passengers.

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Separately in the UK, two passengers were asked to leave an Easyjet flight they had already boarded, and told the next flight to their destination was in four days. They decided not to reschedule, as they had booked non-refundable accommodation.

After the United incident, the Canadian government announced it would overhaul the rules to “ensure that passengers’ rights are protected”.

But well before that, Cole Doyle and his brother and parents were inconvenienced by an overbooking problem.

In March, the Doyle family tried to check in online to their flight to Montreal but could not assign a seat to Cole.

When they got to the airport at Charlottetown on Prince Edward Island, they were told there was no seat for him as the flight had been overbooked.

His mother, Shanna, asked whether an adult could give up their seat for Cole but was told that even if someone did so, it would be likely to go to another passenger and could not be guaranteed for the boy.

The family drove the two hours to Moncton in neighbouring New Brunswick, in the hope of getting on another flight.

“I’m crying in the back seat,” Cole told the Canadian broadcaster CBC afterwards.”Like how do I get to where I’m going? I don’t know if I’m even going to make it with my family.”

Once they got there, though, they found out the flight they wanted had been cancelled.

“I thought it was a joke,” said Cole’s father, Brett. “People are fed up. You shouldn’t be able to sell something twice.”

The family eventually made it to Montreal and caught a connecting flight to Costa Rica for their holiday, but have since complained to Air Canada and received an offer of a C$2,500 (£1,500) voucher, along with an apology.

An airline spokeswoman told the Canadian Press news agency: “We are currently following up to understand what went wrong and have apologised to Mr Doyle and his family as well as offered a very generous compensation to the family for their inconvenience.”

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