Why I failed to catch Canada’s worst serial killer

Ten years ago, the trial of Canada’s most prolific serial killer opened in Vancouver. Det Con Lorimer Shenher had long suspected the man in the dock, who eventually admitted to nearly 50 murders, but Shenher’s attempts to question him had been hindered by red tape. He is still haunted by his failure.

Lorimer Shenher had been working in his new job as head of Vancouver’s Missing Persons Unit for only two days when an anonymous caller gave him a name – the name of a man who could be responsible for the disappearance of women from the city’s Downtown Eastside district.

It was July 1998 and Shenher had been tasked with finding out what had happened to 17 women missing from the district, also known as the “low-track”, because it was where people went to buy cheap sex.

All the missing women were sex workers and drug users, and many were from Canada’s indigenous population.

Shenher entered the name he had been given, Willie Pickton – or Robert William Pickton – into the police database.

He saw immediately that his suspect had form. Earlier that year, charges had been dropped against the 49-year-old pig farmer for imprisoning and stabbing a sex worker, almost fatally.

The caller said he had been told women’s handbags, identity cards and bloody clothing could be seen at Pickton’s farm. And he said he had listened himself to Pickton making disturbing jokes.

“Pickton had a meat grinder he would talk about,” says Shenher.

“He would tell his friends, ‘If you ever need to dispose of a body…'”

Working out whether Pickton had anything to do with the disappearances would be a straightforward case of issuing a search warrant and bringing him in for questioning, Shenher thought.

“My mantra was you have to either rule him in or rule him out,” he says.

But in fact it would be another four years before officers finally searched Pickton’s property – on an unrelated charge – and by that time at least another 14 women would have been murdered.

A forensic search of Pickton’s farm eventually revealed the DNA of 33 women in various buildings, freezers and machines.

As he had boasted, the pig farmer had disposed of his victims in his meat grinder. Others he had fed to his pigs.

He later confessed to an undercover officer that he was one short of hitting his target of 50 kills.

So why did it take so long to catch him?

Shenher began his police career in the early 1990s as Lorraine Shenher – an athletic, hard-working 27-year-old who achieved one of the highest scores ever in the Vancouver Police Department selection process. He has since undergone gender reassignment, changing his name from Lorraine to Lorimer.

For one of his first assignments he worked undercover in the Downtown Eastside. Dressed in a short skirt, he would wait on street corners for men to solicit him for sex so he could arrest them.

The experience gave Shenher an insight into the brutality sex workers routinely experienced. Clients could be violent – one threatened to kill him, another tried to abduct him at gunpoint. He also noticed that police officers who should have been protecting the women often ignored their complaints.

At this time, he had a unique perspective on what he saw happening around him.

“I felt I was a man observing the situation. But also, living as a woman myself, I couldn’t put up with the oppression and sexism the women faced,” he says.

“I had a lot of anger around it.”

A few years later, Downtown Eastside residents began to report that women were going missing.

One, a young drug user and sex worker called Sarah de Vries, described her fears in her diary.

“Am I next?” she wrote in December 1995.

“Is he watching me now? Stalking me like a predator and its prey. Waiting, waiting for some perfect spot, time or my stupid mistake. How does one choose a victim?

“Good question. If I knew that, I would never get snuffed.”

In April 1998, Sarah herself disappeared.

She was the 17th person on Shenher’s list when he was appointed to the Missing Person’s Unit.

Several officers within the Vancouver Police Department had already begun to suspect a serial killer was at work.

One of them was Det Insp Kim Rossmo, who had recently completed doctoral research in criminal profiling.

“I went back 20 years using data and typically we would find either no, or just one or two, unfound people in a year,” he says.

“This number started to grow in 1996, 1997 and 1998. I though the only explanation for this was a serial murder case.”

But when Rossmo took his findings to the officer in charge of the Major Crime Section, he was told that because the women tended to live transient lives, it was more likely they had just drifted away.

In fact, this was wrong. Although the women were drug users and poor, they still maintained strong ties to families, friends and their community.

But because no-one had found the women’s bodies, Rossmo’s boss thought no crime had taken place and that in time the women would show up.

Special Report: On the trail of the murdered and missing


Each year, dozens of indigenous Canadian women are murdered or disappear never to be seen again. Some end up in a river that runs through the heart of Winnipeg.

BBC News App users click HERE.

One of Shenher’s first moves was to get in touch with the officer who had arrested and charged Pickton in 1997 for his attack on a sex worker at his farm.

Despite the severity of the victim’s injuries, prosecutors had dropped the case because she was a heroin addict and it was felt she wouldn’t be a convincing witness.

Shenher found this decision inexplicable, and his views were shared by the arresting officer – from the Royal Canadian Mounted Police (RCMP) – who helpfully opened his files to Shenher.

Because Pickton’s farm was outside the city, it fell under the jurisdiction of the RCMP rather than the Vancouver Police Department.

In Shenher’s view it made sense for the Vancouver police and the Mounties to work together on the case, but at the highest levels of both forces there was resistance to the idea and full co-operation did not begin for several years.

So Shenher returned to his original phone tip-off.

The caller had mentioned parties held on Pickton’s farm in a barn known locally as Piggy’s Palace. These late-night gatherings were popular with biker gangs. Sex and drugs were said to be freely available.

A female friend of the informant had attended these parties, and it was she who had seen personal items and bloody clothing that could have belonged to the missing women.

Shenher quickly identified this woman but she didn’t want to speak to the police. So Shenher proposed an undercover operation to confirm her story, using a female officer who would befriend her and become her confidante. The plan was refused.

Instead, Pickton was put under surveillance for three days. But as he did little to arouse suspicion, this was discontinued.

“If these women were from any other walk of life, there would be total outrage, search parties, volunteers, roadblocks,” says Shenher.

“On a very deep level, a large segment of society and the policing community didn’t feel these women were worth searching for and many people questioned whether they even wanted to be found.”

In May 1999, the Vancouver Police Department established a Missing Persons Review Team with Shenher as the lead investigator. Although this was an improvement from the Missing Persons Unit, it still lacked the resources of a fully-fledged homicide investigation.

Then another source came forward with a gruesome story that appeared to identify Pickton as the man killing and disposing of the missing women.

The source said he had seen handcuffs in Pickton’s bedroom and a special freezer in his barn from which he had been served “strange meat”, which he believed could have been human.

He also spoke of a female friend, whom he named as Lynn Ellingsen, who had gone with Pickton to the Downtown Eastside to help him pick up women.

The source said that Ellingsen had told him that she had walked into Pickton’s slaughterhouse and had seen what she thought was a female body hanging from a meat hook. Pickton was standing beside it cutting strips of flesh off the body’s legs. She said she hadn’t realised that human fat was yellow – a detail that lent credibility to her story.

At this point Shenher felt he had enough evidence to bring both Ellingsen and Pickton in for questioning, but because Pickton’s farm fell under the jurisdiction of the RCMP, it was up to them to take the investigation forward.

The RCMP questioned Ellingsen twice, but both times she refused to talk.

As for Pickton, Shenher later found that an RCMP officer visited his farm but was told by his brother to “come back during the rainy season” because they were too busy working. Four months later, RCMP officers did interview Pickton, who denied killing the women. He consented to a search of his property – but amazingly, this offer was not followed up.

By now the number of missing women had risen to 30 and Shenher was beginning to experience physical symptoms brought on by what he regarded as his failure to solve the crimes.

He suffered from nightmares and mysterious aches in his body, had trouble eating and developed allergies.

“I’ve asked myself so many times could I have just physically gone to the farm and tried to execute a search warrant,” he says.

“The answer, really, is ‘No’. It was not my jurisdiction. What failed us was that someone at a very senior level in my force should have approached someone at a very senior level in the RCMP. But it didn’t work that way. We didn’t get that support.”

By the end of 2000, Shenher was exhausted and demoralised. He was beginning to suffer from post-traumatic stress disorder so asked to be transferred to a different unit.

Then, in January 2001, nearly three years after Shenher had received his first tip-off about Pickton, the RCMP and Vancouver Police Department finally established a joint operation to re-examine the cases of missing and murdered sex workers in the province of British Columbia.

Shenher should have been cheered by this. Instead he was depressed.

“What they did was to pull in as many sex offenders and predators that they were aware of in the province and put together a list of 100 men, but not rank them in priority,” he says.

“So despite having all our information about Pickton, they didn’t put him at number one of the suspect list.”

It was only in February 2002 when a junior RCMP officer visited Pickton’s farm looking for an unlicensed gun and spotted an asthma inhaler bearing the name of one of the missing women, that he was finally arrested.

Within hours, the Pickton property became the site of the largest crime scene search in Canadian history.

Shenher, when he found out, experienced a wave of contradictory emotions.

“Shock, elation, dread, excitement, sorrow, grief, nausea – it was all there, jumbled up together,” he says.

“It was a hollow victory and all I could do was cry.”

In 2007, a court found Pickton guilty of six counts of second-degree murder. There was enough evidence to charge him for a further 20 killings, but prosecutors decided not to proceed because he had already been given the maximum life sentence.

Shenher’s criticism of the police investigations were shared by family and friends of the victims.

In 2010, in response to popular pressure, the government of British Columbia formally announced a Missing Women Commission of Inquiry to look into the police’s conduct.

It ruled that their investigations suffered from a lack of leadership, describing them as a “blatant failure” marked by a deep bias against the poor, often drug-addicted, victims.

At the same time it praised certain officers, like Shenher, for striving valiantly to solve the crisis.

But what could have been an opportunity for genuine soul-searching about the failures of the province’s police and justice systems was wasted, Shenher says.

He even accuses the inquiry of suppressing information that would have shed light on why Pickton’s farm was not searched earlier.

“My sense was there appeared to be a concerted effort by the provincial government to restrict the amount and type of information that came out,” he says, though he admits he has no firm evidence to back this suspicion.

He now hopes a National Inquiry into Missing and Murdered Indigenous Women and Girls, announced last year by the new government of Justin Trudeau, will go further towards answering the question why vulnerable women were so badly let down.

“When a missing woman is viewed as inevitable, where the surge of the investigation is not done at the same level as other investigations and women are dying, then we have to do better,” the Canadian Minister for Indigenous and Northern Affairs, Carolyn Bennett, told the BBC.

Racism and sexism were still a problem within the country’s police forces, she added.

Shenher is now on long-term medical leave from the police. In 2015 he published a book that details his frustrations with the Pickton investigation, That Lonely Section of Hell.

“People think there’s police accountability in Canada,” he says.

“But there aren’t a lot of mechanisms that the government has to oversee their work.

“Without that accountability, I do think a killer like Pickton could get away with it again.”

This article was supported by the Pulitzer Center on Crisis Reporting

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Canadian economic surge edges central bank closer to hiking rates

By Leah Schnurr

OTTAWA (Reuters) – Canada’s economy accelerated in the first quarter on the back of strong consumer spending and a business investment rebound, bolstering the case for the central bank to begin considering raising interest rates.

Gross domestic product grew at an annualized 3.7 percent pace, Statistics Canada said on Wednesday, slightly below expectations for 3.9 percent growth and following upwardly revised annualized growth of 2.7 percent in the fourth quarter.

The economy was also on solid footing as it ended the first quarter, with growth rising by a better-than-expected 0.5 percent in March.

While the first-quarter expansion was shy of the Bank of Canada’s 3.8 percent forecast, it made Canada a growth leader among its industrialized peers at the start of the year.

“At the end of the day, we have to call it strong no matter what,” said Derek Holt, an economist at Scotiabank. “A lot of other countries would like to be in this position.”

Economists said the strong data put the Bank of Canada one step closer to raising rates. The central bank is largely expected to be on hold until 2018.

“If we continue to get growth numbers like this, absent trade policy risks, it’s going to be tougher for the Bank of Canada to avoid rate hikes at some point in the distance,” Holt said.

After initially strengthening following the data, the Canadian dollar was weaker against the greenback as oil prices fell.

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Canada’s economy grows 3.7 percent annualized in first quarter

By Leah Schnurr

OTTAWA (Reuters) – Canada’s economy accelerated in the first quarter on the back of strong consumer spending and a business investment rebound, bolstering the case for the central bank to begin considering raising interest rates.

Gross domestic product grew at an annualized 3.7 percent pace, Statistics Canada said on Wednesday, slightly below expectations for 3.9 percent growth and following upwardly revised annualized growth of 2.7 percent in the fourth quarter.

The economy was also on solid footing as it ended the first quarter, with growth rising by a better-than-expected 0.5 percent in March.

While the first-quarter expansion was shy of the Bank of Canada’s 3.8 percent forecast, it made Canada a growth leader among its industrialized peers at the start of the year.

“At the end of the day, we have to call it strong no matter what,” said Derek Holt, an economist at Scotiabank. “A lot of other countries would like to be in this position.”

Economists said the strong data put the Bank of Canada one step closer to raising rates. The central bank is largely expected to be on hold until 2018.

“If we continue to get growth numbers like this, absent trade policy risks, it’s going to be tougher for the Bank of Canada to avoid rate hikes at some point in the distance,” Holt said.

After initially strengthening following the data, the Canadian dollar was weaker against the greenback as oil prices fell.

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Woman likely walking to Canada freezes to death in Minnesota

NOYES, Minn. (AP) – A woman who may have been trying to reach Canada on foot from the United States probably froze to death in a remote part of northwestern Minnesota, authorities said.

The body of 57-year-old Mavis Otuteye, who authorities believe was a citizen of Ghana in western Africa, was found Friday in a field a half-mile from the Canadian border near the tiny town of Noyes, according to the Kittson County Sheriff’s Office.

Otuteye was reported missing a day earlier and was likely headed to Canada on foot to try to reunite with her daughter, Chief Deputy Matt Vig told WDAZ-TV (http://bit.ly/2smrUJb ). He said Otuteye had been living in Delaware for the past several years.

Final autopsy results are pending, but Vig said the preliminary results indicate she died of hypothermia. The officer said part of her body was in a shallow pool of water in a drainage ditch.

“The temperatures that night were in the 40s,” Vig told the Grand Forks, North Dakota, television station. “Just tough weather for her to make that journey.”

Otuteye’s immigration status in the U.S. was not immediately clear. Vig did not immediately return a call from The Associated Press on Wednesday. Kris Grogan, a regional spokesman for U.S. Customs and Border Protection, said his agency was awaiting final confirmation of her identity before releasing more information.

There’s been a surge in immigrants trying to illegally cross the U.S. border into Canada on foot from Minnesota and North Dakota since Donald Trump became president. Officials say most of the immigrants have been natives of Somalia, which was one of the countries named in Trump’s attempted travel ban, but they’ve also come from Ghana, Djibouti, Nigeria and Burundi.

Many of them risked brutal winter weather to avoid border posts because official Canadian entry points turn back asylum seekers arriving from countries considered safe, such as the U.S. But that policy doesn’t apply to people who reach Canadian soil first, resulting in many people crossing fields and ditches to avoid the official checkpoints.

The most recent Royal Canadian Mounted Police figures show that 859 people were stopped between official border points in April. So far this year, there have been 1,993 interceptions in Quebec, 477 in Manitoba and 233 in British Columbia.

Otuteye’s death remains under investigation by Kittson County sheriff’s officials and the Minnesota Bureau of Criminal Apprehension.

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Canada’s Ontario province plans to raise minimum wage to C$15 per hour

By Fergal Smith

TORONTO (Reuters) – Ontario, Canada’s most populous province and industrial heartland, plans to raise its minimum wage to C$15 ($11.14) an hour by 2019, its premier said on Tuesday, putting it far above the current range for the rest of the country.

The provincial Liberal government, which is lagging in polls ahead of an election next year, plans to phase in the increase from the current C$11.40 an hour.

Premier Kathleen Wynne said the minimum wage would rise to C$14.00 on Jan. 1, 2018, and climb to C$15 on Jan. 1, 2019.

“It has always been a challenge to raise a family on a minimum wage job … but in recent years it has become almost impossible,” Wynne said. “Increasing the minimum wage will make a world of difference in millions of lives.”

Canada’s minimum wage currently ranges from C$10.72 to C$13 provincially. Energy heavyweight Alberta is planning to raise its minimum wage to C$15 by 2018.

“Raising the minimum wage is one tool that a government can use to help those who are struggling to get by,” Hank Beekhuis, a director at CLAC Ontario, an independent labor union, said.

The economy of Ontario, which accounts for nearly 40 percent of Canada’s gross domestic product, grew 2.7 percent in 2016, helped by low oil prices, a weak Canadian dollar and a red-hot housing market.

The province’s unemployment rate has fallen to 5.8 percent in April from 9.6 percent during the global recession. But businesses faced with increased wage costs could respond by hiring fewer workers or raising prices.

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Trudeau urges Pope Francis to apologise to indigenous Canadian people

Justin Trudeau has urged Pope Francis to apologise to indigenous people in Canada for the Catholic church’s decades-long abuse of aboriginal children in the schools it governed there.

The Canadian Prime Minister met with the pontiff at the Vatican on Monday as part of his visit to Italy for the G7 summit in Taormina over the weekend. 

Mr Trudeau argued Pope Francis’s apology was imperative for Canadians to make genuine progress on resolution and reconciliation with the Aboriginal population in Canada.

In the late 19th century residential schools were set up to assimilate the children of Canada’s aboriginal people, who comprise of the First Nations, Inuit and Métis, into mainstream society. 

Around 30 per cent of the children of Canada’s native peoples, approximately 150,000 children, were forcibly removed from their families and placed in what they termed “residential schools”. The institutions taught the children how to speak English and adopt Canadian customs and Christianity, with the intention being for native traditions and ancestral languages to be diluted and ultimately erased.

For over a century the institutions were government-funded but many were administered by Christian churches which predominantly consisted of the Roman Catholic tradition.

Many children were physically and sexually abused in the institutions.

“I told him how important it is for Canadians to move forward on real reconciliation with the indigenous peoples and I highlighted how he could help by issuing an apology,” Mr Trudeau told reporters after meeting Pope Francis.

Canada’s Truth and Reconciliation Commission said in a 2015 report that the construction of the schools amounted to “cultural genocide” and has called for a papal apology in order to aid the reconciliation process with survivors. 

Mr Trudeau said the pontiff informed him he was looking forward to working alongside himself and the Canadian bishops to “figure out a path forward together”.

Additional reporting from Reuters

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British Columbia Greens Back the NDP in Political Upheaval (1)

(Bloomberg) — British Columbia’s New Democratic and Green parties announced a four-year alliance aimed at forming the Canadian province’s first minority government in more than six decades.

Green leader Andrew Weaver said his party has agreed to support the New Democrats — which got close to winning half the seats in the provincial parliament this month. Details will be released Tuesday after the pact is ratified by members of the New Democratic Party, leader John Horgan said at a news conference with Weaver in Victoria.

“We’re looking to show British Columbians that minority governments can work,” Weaver, 55, told reporters, saying the parties have ruled out forming a coalition. “We’re not looking to have an election any time soon.”

The alliance may be setting the stage for a leadership battle in the Pacific Coast province between Horgan, a feisty 57-year-old former pulp mill worker, and B.C. Premier Christy Clark, 51. The premier has indicated she intends to continue governing after her Liberal Party won the most seats in parliament — but fell one short of a majority — in a fiercely contested election this month.

The Liberals won 43 seats, the NDP took 41, and the Greens conquered 3 — the first time the party has ever had more than one.

“As the incumbent government, and the party with the most seats in the legislature, we have a responsibility to carefully consider our next steps,” Clark said in a statement. “It’s vitally important that British Columbians see the specific details of the agreement announced today by the BC NDP and Green Party leaders, which could have far-reaching consequences for our province’s future.”

Trudeau and Kinder Morgan

The Green-NDP alliance could also be a headache for Prime Minster Justin Trudeau, whose federal government approved Kinder Morgan Inc.’s Trans Mountain oil pipeline expansion. The new dynamic in the province is likely to cloud the outlook for that project.

“The decision we took on the Trans Mountain pipeline was based on facts and evidence, Trudeau said Tuesday in Rome. “Regardless of a change in government in British Columbia, or anywhere, the facts and evidence do not change.”

The province that boasts Canada’s fastest-growing economy hasn’t seen a party govern without a majority of the seats in the legislature since 1952. Even though minority governments aren’t unusual in Canada and a formal coalition isn’t necessary to govern, such a tight outcome is rare. The NDP-Green alliance would have only a one-seat edge over the Liberals in the legislature, which some political commentators have called unsustainable.

The Green Party and NDP share similar ideas, such as raising carbon taxes and taxing housing speculators. The Kinder Morgan pipeline issue also played a “critical” role in the negotiations for a deal and will be reflected in details of the pact Tuesday, Weaver said.

Shares in the Canadian unit of the Houston-based company are set to start trading Tuesday morning after an initial public offering that’s expected to raise C$1.75 billion ($1.3 billion). Those funds will be used to help pay for the controversial C$7.4 billion project to nearly triple Trans Mountain’s capacity, which will allow Canada to start exporting oil to Asia but is vehemently opposed by many in B.C. because of fears of an oil spill.

(Updates with Trudeau comment in 7th paragraph.)

–With assistance from Josh Wingrove

©2017 Bloomberg L.P.

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USD/CAD Canadian Dollar Lower Even as USD Caught in Political Drama

USD/CAD Canadian Dollar Lower Even as USD Caught in Political Drama

The Canadian dollar was lower versus its American counterpart on Tuesday. The loonie had no support from oil prices as concerns about Libyan output will tip the scales in favour of the oil glut remaining in the market despite the efforts of the Organization of the Petroleum Exporting Countries (OPEC) and other major producers to cut production levels for another 9 months.

The price of West Texas remains under $50 after the news that Libyan production will return to 800,000 daily barrels after the disruption in the Sharara field has been sorted. The release of weekly inventories on Thursday at 11:00 am EDT will be a powerful driver of oil prices as there is a lot of scepticism in the market about the expected results from the OPEC cut agreement extension when the US shale industry is rapidly ramping production.

The Canadian stock market was mixed as Scotiabank beat earnings forecasts bringing solid results for Canadian banks after their surprise downgrade by Moody’s. The ratings agency deemed that the housing market is facing a speculative bubble that threatens the banks. Energy stocks fell alongside the price of oil and in general the stock market was subdued as political risks rose in Europe and the United States.

usdcad Canadian dollar graph, May 30, 2017

The USD/CAD gained 0.043 percent in the last 24 hours. The currency pair is trading at 1.3454 after producer prices rose in Canada for the eight month in a row. Canadian fundamentals have been mixed and tomorrow’s release of the Canadian monthly GDP will bring clarity on the direction of the loonie.

The US dollar got a boost from Fed Speaker Brainard as the known dove deemed a rate hike soon to be appropriate. Investors are pricing in the possibility of a rate hike in June as 88.8 percent using the CME Fedwatch tool methodology based on Fed funds futures prices. Consumer confidence was lower than expected earlier today but remains strong at 117.9. The paradigm between a strong consumer confidence but weak retail sales continues as Americans are opting to save. Employment data has been the strongest evidence of a recovery, but the headline numbers are not enough for the U.S. Federal Reserve that is now more focused on wage growth. The U.S. non farm payrolls (NFP) report will be published this Friday, June 2 at 8:30 am EDT, with a forecast of 186,000 new jobs added in May.

The price of oil lost 0.611 percent on Tuesday. The West Texas Intermediate is trading at $49.42 as concerns that the OPEC and other major producers agreement to extend the production cut might not be enough to curb the current glut in crude inventories. Energy prices fell in 2014 as Saudi Arabia pushed a market share grab strategy by ramping up production to drive prices and force US shale producers into default. The strategy backfired as low rates helped shale operations service their debts even at lower prices and the OPEC is now caught in a vicious circle where it is up to them to rebalance the market by removing the excess production.

Weekly US crude inventories are usually published on Wednesday’s but due to the Memorial Day holiday it will be pushed back a day to Thursday at 11:00 am EDT.

Market events to watch this week:

Wednesday, May 31
8:30 am CAD GDP m/m
9:30 pm AUD Private Capital Expenditure q/q
9:30 pm AUD Retail Sales m/m
Thursday, Jun 1
4:30 am GBP Manufacturing PMI
8:15 am USD ADP Non-Farm Employment Change
8:30 am USD Unemployment Claims
10:00 am USD ISM Manufacturing PMI
11:00 am USD Crude Oil Inventories

Friday, Jun 2
4:30 am GBP Construction PMI
8:30 am CAD Trade Balance
8:30 am USD Average Hourly Earnings m/m
8:30 am USD Non-Farm Employment Change
8:30 am USD Unemployment Rate

*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.

Alfonso Esparza

Alfonso Esparza

Alfonso Esparza

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‘It got done but it wasn’t pretty’: Kinder Morgan Canada shares slide on debut amid ‘really ugly storm’ in B.C. politics

CALGARY – Kinder Morgan Canada’s shares tumbled on debut Tuesday amid concerns a British Columbia political alliance could hurt plans to expand the company’s pipeline network on the West Coast.

Kinder Morgan Canada shares slid as much as 7 per cent from their listed price of $17 as the company began trading on the Toronto Stock Exchange, with analysts blaming investor reluctance partly on a poorly timed initial public offering that coincided with closely-fought elections in B.C.

“It was a really ugly storm for Kinder to do this in,” Canoe Financial portfolio manager Rafi Tahmazian said of the IPO, referring to B.C.’s NDP and Green Party’s announcement on Monday that they had agreed to work together to unseat the reigning, energy-friendly Liberals led by Christy Clark. The project also has the backing of Ottawa and the Alberta government.

Both the NDP and the Green Party are opposed to Kinder Morgan’s proposed a $7.4 billion Trans Mountain pipeline expansion project between Alberta and B.C.

The company announced last week it would construct the project despite the political climate being “not ideal.”

In addition to the political uncertainty, Tahmazian said Houston-based Kinder Morgan Inc.’s plan to use the proceeds of the IPO of its Canadian division to pay down the parent company’s debt was not well received by the market. “The thing did not pitch well,” he said.

At the same time, environmental activists took their fight against the Trans Mountain expansion to investors in Toronto, with the Dogwood Initiative raising money for geo-targeted mobile ads focused on corporate offices in Bay Street to dissuade investors from buying the stock.

“The message is very clear – Kinder Morgan’s project is not going to get built, it’s pretty dumb to invest in it,” Dogwood Initiative spokesperson Sophie Harrison said.

“Kinder Morgan can try to raise the capital. If they end up with the capital, then good for them but we’re giving investors fair warning,” Harrison said.

The IPO, underwritten and co-led by TD Securities and RBC Capital Markets, raised $1.75 billion but shares fell as investors fretted over the fate of the newly-minted company’s flagship project.

“It got done but it wasn’t pretty,” Wood Mackenzie analyst Peter Agiris said of the IPO. He added that most investors see the stock as a longer-term holding and, “If you look at other IPOs, it’s not uncommon to see a stock trade down.”

The underwriters have the option, available for 30 days, to buy a $262 million over-allotment of Kinder Morgan Canada shares.

Barring roadblocks by a potentially new B.C. government, construction on the project is set to begin later in 2017 and the line would begin shipping oil in 2019, delivering an additional 590,000 barrels of oil per day to an export point in Burnaby, B.C.

Major oilsands producers in Alberta, including Suncor Energy Inc. and Canadian Natural Resources Ltd., are committed shippers on the line, which would diversify Canadian oil exports away from its main market in the U.S. and give domestic companies access to growth markets in Asia.

Any delay in the Trans Mountain expansion would be a negative for Kinder Morgan but might provide a boost for rival Enbridge Inc.’s mainline system, according to David Galison, an analyst with Canaccord Genuity.

“Based on the current production forecasts there may not be enough demand for both the Trans Mountain expansion project and TransCanada’s Keystone XL project,” he said in a note to clients.

“New capacity has the potential to put pressure on Enbridge’s mainline system, which is the largest exporter of crude out of Canada.”

Financial Post with files from Bloomberg



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