What’s new?

 In an email exchange from May 2016, obtained by using provincial access to information laws, ecosystem biologists Kyle Rezansoff and Kerry Harvey have expressed their professional concern that a potential coal mine in B.C. will threaten a nearby caribou herd.

Why it’s important?

 The proposed Sukunka coal mine would be expected to last for 20 years and to be dug near the Peace River Valley in the north-eastern corner of the province by multinational mining company Glencore. Because the coal mining project falls into the habitat of the endangered Quintette herd, it would place it in even greater peril.

The Government of British Columbia says that the Quintette’s endangered status is a “result of habitat loss, fragmentation and alteration, and an increased predation associated with various forms of industrial activity”. Information on Central Mountain Caribou

The biologists expressed concern that the Sukunka project will threaten the caribou if it is to be built within less than three kilometres of the caribou habitat on the high elevation winter range. Glencore proposed it be built within 500 metres. The distance between the caribou’s habitat and human activity is what the biologists called a “buffer zone”.

On May 5^th 2016, Rezansoff wrote to Harvey about Eco-Logic’s 500- metres buffer zone. “I don’t know how well we can rely on that distance being suitable”, he said. “We have science stating that the caribou are negatively affected up to four kilometres away from industrial activity”, before adding, “a conservative three-kilometre buffer zone from the Sukunka project seems to be reasonable”.

On the same day, Harvey wrote: “I’ve just been sitting here reflecting on about the Sukunka caribou call we participated and have some concerns looking forward to tomorrow’s conversation”.

Harvey then added that it seems obvious a precautionary approach be taken when dealing with the Quintette, given their endangered nature and that the three-kilometre buffer zone should be suggested during the conversation with their superiors.

What the government says?

 It is unknown whether the experts’ advice was followed or not. The Ministry of Forests, Lands and Natural Resources Operations did not reply to multiple attempts to contact them about the buffer zone’s width.

The government of British Columbia does not say when the Sukunka project’s review will be finished.

The emails were released in October 2016 and the project is still under review. State of the Sukunka project under the Environmental Assessment Office of British Columbia.

What other people say?

 According to Chris Johnson, an Ecosystem Science and Management Program Professor of the University of Northern British Columbia, coal mines can leave a huge footprint on the caribou and can result in the loss of a large area of caribou habitat. Johnson spent 11 years collecting data about caribou range in BC.

He said that “the consensus among most people is that the high elevation range shouldn’t be disturbed.” These open mines often are dug on top of mountains says the professor, and this landscape is preferred by the caribou.

Johnson says that open mines like Glencore plans to dig are often dug on top of mountains and they do two things: drive caribou away to lower regions where wolves live and also open up trails for wolves to travel up to high elevation range that caribou may still inhabit. Wolves are the caribou’s main predator.

What’s next?

Johnson says it seems counter-intuitive that the B.C. Government would announce a $27M investment into caribou protection last month and potentially approve a multinational’s project that would place one of the biggest herds of the region in peril.

“500 metres is not very far- four kilometres is a lot farther, but it’s not very far either”, says Johnson.

Glencore’s response to inquiries about buffer zones was: “Part of our [environmental assessment] discussion is aimed at getting consensus on the appropriate distances between any future mining activity and this habitat”.

By Floriane Bonneville

During Question Period last week, Conservative MP Kelly Block of Eagle Creek, Saskatchewan asked Transport Minister Marc Garneau: “Will the transport minister admit that he is selling our airports and tell us to whom he is selling them?” Some amongst the aviation community and the Opposition decry the prospect of privatizing all of the major airports in Canada.

Kevin Psutka says it wouldn’t be the first time that the Liberals privatize airports.

Psutka used to be the President of the Canadian Owners and Pilots Association and is now the Safety and Security Representative for the Air Line Pilots Association of Canada. He says the foreseen privatization of airports would be a mistake.

In the 1990s, Transport Minister Doug Young created a plan that sold most of its small and regional airports to private entities. The plan was called “National Airport Policy”.

At the time, Young said the privatization of those airports would give the incentive for the owners to be “good managers”. However, Young came to regret this decision. He told the Globe and Mail in 2003 that in the end, the airports had not been better managed by private owners and that he regretted his decision.

Psutka says he was personally involved with fighting against the privatization of airports back in 1994. He says he thought it would make airports less safe in the future, because the privatization of airport regulations makes management cut corners on safety.

In the end, he says, the less care that is put into ensuring that the airport is safe, the greater chances of accidents there are.

Apart from creating safety issues, the privatization of airports lead to the closing down of many of them.

An open database obtained through the Land Information of Ontario shows that there are roughly 64 abandoned airports in the province. Those airports closed down because of a lack of funding after the federal government walked away from managing them. The database shows that many other airports’ runways are in utterly poor conditions.

Map of the abandoned airports in Ontario

“The Government wanted to make a whole bunch of money off of them, but they realized that they couldn’t find buyers for it” says Psutka.

Psutka says the policy basically made it really expensive for municipalities or private bodies to run airports on their own.

There were also social repercussions to the closing of airports like that of Bonnechere. Among other things, it lead to the isolation of the community, says Garnet Kranz. Kranz is a resident of Killaloe who used to travel through this airport in the 1950s up until it closed. Kranz used to fly to Montreal, Pembroke, Toronto et many other places around Renfrew county. After the closing of the airport, Kranz says he didn’t travel so much anymore.

Natasha Gauthier is the Senior Media Relations Advisor for Transport Canada. She says: “work is done to transfer or sell these lands in accordance with the Treasury Board’s policies on the sale or transfer or surplus real property.” However, it is still unclear what Transport Canada plans to do with the airport.

Transport Canada didn’t mention that the Bonnechere airport site is contaminated.  Like many other airports built in the Second World War. Archives from the government of Canada shows that the airport’s contamination is of medium alert and so nothing can be dug from its ground because it could eventually spread out.

That is also why the Pikwaknagan land claim does not want to have anything to do with the airport site, Councillor Ron Bernard says.

When she was asked whether the airport would ultimately simply sit there for eternity until it degrades itself, Gauthier did not reply. When asked the same question, Psutka responded with a vivid “Yes”. Bernard says that he doesn’t know.

The Potash industry is not faring very well these days. The biggest Potash mining company in the world lost 934 billion of its revenue in the past 12 months. Considering that Potash Corp. made roughly 1,27 billion in December 2015 as opposed to 336 million in the same month of 2016.

Potash Corporation Stock Prices– Past 5 Years by flor.bonneville on TradingView.com

This substantial loss of revenue sounds alarming. More than 400 people lost their jobs at Potash Corp in 2016. Many are worried about the potash industry in Canada.

However, the trend seems to be constant throughout the whole potash mining industry.

When companies experience losses of capital, the first question to ask is whether the reason for the loss comes from inside the company. That is to say: “Was there a strike?” or “Did the company lose a major client?” If the answer to one or the two of these questions is yes, then there is an internal reason for the loss of money.

Professor Shantanu Dutta teaches finance at the University of Ottawa. He says that in the case of Potash Corp, an internal reason for the plummeting of net income does not apply. “This is probably not internal”, he says.

Effectively, the company did not experience a strike in the past year, and it has not lost that many sales. Potash Corp lost 33 per cent of its sales in China from 2015 to 2016, but not because it lost a client, but because the demand was lesser.
The sales have not fluctuated much in the past three years. In fact, Potash Corp’s sales increased from 2015 to 2016.

The internal changes are not significant enough to create a 75% crash in the company’s revenue over twelve months. The sales have not fluctuated much in the past three years. In fact, Potash Corp’s domestic sales increased from 2015 to 2016 of 21%.

We thus have to turn to the external factors affecting the company.

The external factors one needs to consider when analyzing a company’s money loss are competitors increasing their own shares of the market and the cyclical turn of the market.

Journalist Ian McGugan of the Globe and Mail has written many stories about the potash industry. He says that the huge loss experienced by Potash Corp is “all about the plunging price of potash”. Indeed, the price of potash has crashed of half its value on the stock market within the past five years.

McGugan says that the plunge of the price of potash “reflects growing supply”. Which means that the top five markets bought more potash for the same price as in previous years, therefore decreasing their demand for the subsequent years.

All in all, things are not looking good for the potash industry in the coming years. BMO analyst Joel Jackson writes that “few expect better” in the potash industry. Jackson writes that the question is whether the market will crash even more in the coming years.

However finance expert Shantunu Dutta says that there are always fluctuations in the natural resources market, because sales can only go so far when the market is driven by nature. It’s a cause and effect chain– if crops aren’t good for the top five market, then the demands will not be so high. Or alternatively, if crops are doing good and clients buy a lot of potash, then those clients will have surplus for a long time.

“It’s a typical situation for the natural commodity industry”, Dutta says. Hopefully, we can expect the return of a healthy potash market in the coming ten years.

(To see the annotations that accompany this financial statement, please click on the “Notes” tab.)