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MBI Business Brief – August 5, 2022

Arctic Gateway Group’s Hudson Bay Railway receives funding

On Aug. 2, the federal and provincial governments announced $147.6 million in funding for Arctic Gateway Group’s Hudson Bay Railway. The Government of Canada will invest up to another $60 million in addition to its existing support of the Arctic Gateway Group, and the Manitoba government will invest up to $73.8 million.

“Manitobans have enormous pride in the treasured Hudson Bay Railway and in our connections to the North and Arctic. More than that, it is a vital transportation link and a critical part of Canada’s northern supply chain and food security. Together, in partnership with Indigenous and northern communities and the Province of Manitoba, our government is ensuring northern communities remain connected and that we are building a prosperous northern economy that benefits everyone, today’s historic investment will do just that.” said Hon. Daniel Vandal, Minister for PrairiesCan, Minister of Northern Affairs and Minister for CanNor.

The funding will be distributed over two years to support  significant upgrades to and the operation and maintenance of the Hudson Bay Railway.

“The Hudson Bay Railway is an engine for economic development, job growth and tourism opportunities, and our government is proud to support this vital transportation network connecting people and businesses in northern Manitoba with the goods and supplies they need to live, work and invest in their communities. This historic investment and partnership represents a new and exciting chapter for northern Manitoba and today’s announcement demonstrates what we can accomplish when we work together to advance shared opportunities in the spirit of reconciliation and collaboration. Building our northern economy is essential to our province’s future economic and social success, and I am confident this investment will provide economic benefits for the North, Manitoba and all of the Prairie provinces for years to come,” said Premier Heather Stefanson.

Q2 2022 results for Great West Lifeco, NFI Group and IGM Financial

Great West Lifeco announced its Q2 results on Aug. 3, reporting net earnings of $735 million (down six per cent from the same time in 2021) and base earnings of $830 million for the quarter.

“Against the backdrop of falling equity markets and elevated inflation, the company’s well diversified and resilient business portfolio delivered solid results,” said Paul Mahon, president and CEO at Great-West Lifeco. “Strong insurance and investment results offset the dampening effect of equity markets on wealth and asset management businesses. We are pleased with the progress we are making on our strategic priorities including the recent close of Empower’s acquisition of the full-service retirement business of Prudential Financial Inc. The integration of this and our other acquired businesses in the U.S. are on track and we remain confident in the outlook for Empower and our value creation objectives for the business.”

The same day, NFI Group released its Q2 2022 results, seeing revenue of $398 million for the quarter, with an adjusted EBITDA loss of $21 million.

“We are seeing significant positive momentum in our order book, with record bid activity within our North American business contributing to significant new orders, especially for zero-emission buses. Similar to the first quarter of 2022, our ability to meet demand has been hampered by supply chain constraints. Our manufacturing segment results reflect the impacts of lower deliveries as we had a temporary build-up of work-in-progress inventory delaying deliveries until later in the year. Our customers continue to be extremely understanding and supportive through these difficult periods, working with us on price increases that reflect inflation, and schedule changes based on supply availability,” said Paul Soubry, president and CEO at NFI. “We were pleased to complete amendments to our credit facilities in July and thank our banking partners for their continued support. These amendments position us for success as we move into a period of recovery and the return of volume deliveries. 2022 has presented a number of challenges, but our future is brighter than ever, as we expect to capitalize on our growing backlog, order book momentum, strong win rates, and the investments made in our products and operations to deliver on our targets.”

A day later, IGM Financial released its results for Q2 2022. The company reported net earnings of $207.1 million and assets under management of $242.1 billion which was down 7.6 per cent from the same quarter in 2021. Net outflows reported were $527 million compared to net inflows of $2.9 billion in 2021, with year to date net inflows of $1.9 billion.

“Our client flows remained solid with a strong contribution from IG Wealth Management in the context of a challenging industry environment,” said James O’Sullivan, president and CEO at IGM Financial Inc. “Net earnings of 87 cents per share were the second highest second quarter result in the company’s history, on an adjusted EPS basis.”

Forestry development for Manitoba First Nations

On Aug. 2 the Government of Manitoba announced the memorandum of understanding (MOU) signing with Mosakahiken Cree Nation (MCN) to develop revenue sharing on timber dues for rights holders. The agreements could see up to 45 per cent of revenues collected from timber dues returned to the First Nations.

“For too long, Indigenous communities have not benefited from forestry operations on their traditional territories, and our government understands we must take concrete steps to correct past wrongs and advance reconciliation,” Natural Resources and Northern Development Minister Greg Nesbitt said. “Our government is proud to sign these historic memorandums of understanding with Mosakahiken Cree Nation and Opaskwayak Cree Nation, which are the first of their kind for Manitoba. We look forward to engaging with other Indigenous leadership and nations, as Indigenous participation in the forestry sector is essential to ensure everyone benefits from Manitoba’s resources.”

Another MOU was signed with Opaskwayak Cree Nation (OCN) for a similar two-year pilot agreement on Aug. 3. These agreements will allow both Cree nations and the provincial government test and assess the approach before a longer-term agreement is made.

With these agreements, the provincial government will share up to 45 per cent of the dues collected between Jan. 1, 2022 and June 30, 2024 for timber harvested in proximity to MCN and OCN respectively.

As well, the Government of Manitoba also signed a memorandum of agreement with Norway House Cree Nation on Aug. 2 to collaborate on forestry development initiatives.

“Our government understands that to advance reconciliation, we must take concrete steps to correct past wrongs,” said Nesbitt. “This agreement is a first step in ensuring First Nations benefit economically from resource development on their ancestral lands and play an active role in resource management that benefits our province as a whole. I see today as the beginning of a renewed relationship between Norway House Cree Nation and the Manitoba government, working together to ensure our forests provide the values we have come to depend on, now and into the future.”

Under the agreement, the provincial government has committed to support Norway House Cree Nation initiatives that include:

  • a community-run, multi-year tree plant program that will train and employ youth and community members;
  • a multiphase traditional land-use study, led by the community, which prioritizes the areas and interests of Norway House Cree Nation;
  • a community allocation of timber for use in Norway House Cree Nation’s sawmills for the purpose of building approximately 500 homes in the community; and
  • returning up to 45 per cent of revenues collected from timber dues returned to rights holders.

“We are pleased to announce that Norway House Cree Nation and the Manitoba government have reached an agreement to work co-operatively to plan, manage and sustainably develop the natural resources in Norway House Cree Nation’s traditional territory and resource management area. This agreement is a resolution to controversial forest harvesting that occurred previously within the area,” said Norway House Nation Chief Larson Anderson. “The agreement to replant the forest, define financial contributions, establish a mutually acceptable long-term plan for the sustainable development of the area and outline a package of employment opportunities will allow Norway House Cree Nation to benefit from the resources in its traditional territory. The Manitoba government has agreed to ensure appropriate consultation in future activities and share in the financial benefits of future resource development. Environmental stewardship of our traditional territory is essential for appropriate environmental, social and governance economic activities in northern Manitoba.”

Brandon’s Kelleher Ford acquired

On Aug. 2, Edmonton-based AutoCanada Inc. announced it has acquired Brandon’s Kelleher Ford, a new and user Ford dealership and collision centre.

“This high-quality operation is our second Ford dealership and initiates our presence in Western Manitoba – an attractive truck market, while providing the opportunity to further expand our presence in the market,” said executive chairman, Paul Antony about the acquisition. “We are pleased to welcome the team from Kelleher Ford, and we look forward to many opportunities for continued growth as we integrate them into our strong portfolio of dealerships.”

Kelleher Ford is the largest Ford in western Manitoba, and the first acquisition for AutoCanada in the province.

New money for northern Manitoba

The federal government, through PrairiesCan, announced $2.3 million in investments for projects in northern Manitoba. The Hon. Daniel Vandal made the announcement on Aug 4. in Thompson, where he also unveiled the new PrairiesCan service location in the city.

Project funding was aimed at helping diversify Thompson’s economy including supporting the area’s winter testing abilities, assisting with digital training and coaching for northern Manitoba tourism businesses, and building outdoor Indigenous gathering spaces at several University College of the North campuses.

CRTC Broadband Fund invests in Manitoba

On Aug. 4, the CRTC announced its Broadband Fund will support 10 projects with $20.5 million for fourth-generation (LTE or LTE-A) mobile wireless access in Manitoba, Quebec, Newfoundland and Labrador. The projects will see access built along roads and highways as well as improve internet and mobile wireless access in 2,250 households in 35 communities in the three provinces.

In Manitoba, Bell Canada will use the funds for the project.

“Since the first funding announcement from the Broadband Fund in 2020, more communities, households, and roads have access to better and faster Internet and voice services. These services are an important part of Canada’s public safety infrastructure. We are proud that our Broadband Fund is assisting in connecting more people and making them feel safer on the road. The new projects announced today will benefit communities and areas where there is a great need for mobile wireless and broadband Internet access services,” said  Ian Scott, chairperson and CEO for the CTRC.

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