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Suncor defers Montreal refinery project to focus on low cost oilsands expansions

Suncor Energy Inc.’s on-again, off-again plan to add a coker unit to its Montreal refinery to allow it to process heavier barrels of oil, including oilsands bitumen, is off the table as it shuffles its spending priorities.

The $2-billion project has been shelved as the company focuses on low-cost oilsands expansions, projects that will help reduce emissions and cost-cutting digital technologies, CEO Mark Little said on a conference call to discuss fourth-quarter results.

Little said the company is listening to investors as it aims to generate more free cash flow while keeping spending in check.

“Some of the concern we see from the investors is, ‘Wow, you’re going to plow $2 billion into Montreal, are you sure?’,” he said.

“We spent a lot of time thinking about that and running all the analysis and concluded that actually wasn’t the prudent investment for the shareholder.”

Suncor also elected to defer sanctioning of its proposed 40,000-barrel-per-day Meadow Creek oilsands project, which would produce bitumen from wells, until 2023 at the earliest, Little said.

Instead, it will invest in boosting production from its existing similar Firebag facility to nameplate capacity of 203,000 bpd by 2021 and then potentially add 20,000-30,000 bpd by 2024-25.

It also plans to build lower-emission co-generation units at its Base Plant this year and begin construction of a $300-million wind power project in southern Alberta.

The Calgary-based energy giant reported a net loss of $2.3 billion for quarter ended Dec. 31 due mainly to asset impairment charges of $3.3 billion.

That includes $2.8 billion due to lower forecast prices for heavy oil from its Fort Hills oilsands mine in northern Alberta and $393 million linked to higher capital cost estimates for the West White Rose expansion project off the coast of Newfoundland and Labrador, which is expected to begin producing oil in 2022.

Husky Energy Inc., which is the major owner and operator of the White Rose field, said its numbers align with those of Suncor.

“As indicated last year, we had some initial challenges with productivity at West White Rose, and we are now seeing good execution and are on track,” said Husky spokeswoman Kim Guttormson, who declined to give a detailed cost estimate for the expansion.

Suncor said it expects its share of production from the White Rose field will average about 8,700 bpd over its life and its share of future capital expenditures is about $1.4 billion.

Suncor shares fell by as much as 4.6% in early trading on the Toronto Stock Exchange, although it announced an 11% increase in its quarterly dividend and a $2-billion extension of its program to buy back shares.

Analysts said its production results were generally in line, but misses on its operating and capital costs in the quarter were slightly negative.

Little also announced Suncor will file an application in the current quarter for a project to extend its base oilsands mine to a new area when its current resource is depleted in about 2035.

The project represents one of many options and wouldn’t be officially approved for at least a decade, he stressed.

“We feel that filing in 2020 is prudent under the current regulatory process, including the effects of the new (federal) assessment act, to ensure adequate time is provided for the regulatory process,” he said.

“Should we choose to extend the mine, the plan is to incorporate non-aqueous extraction technology which significantly reduces the costs and environmental impacts of mining oilsands versus our current operations.”

Suncor reported its MacKay River oilsands project, which produces about 30,000 bpd from wells, was shut down following an operational problem in December and is not expected back to be back on line until after March.

The outage won’t affect 2020 guidance for the company, Little said, because the loss of barrels can be counted under Alberta’s ongoing oil production curtailment program.


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Montrealers battle over reasons why their booming city is plagued by empty storefronts

On the corner of Montreal’s historic St-Laurent Blvd. and trendy St-Viateur Street – known for the 24-hour St-Viateur Bagel Shop – lies an empty storefront that has become a symbol of the city’s retail woes.

And Danny Lavy, co-owner of the company that owns the building, has joined a list of real estate players fingered as neighbourhood villains in various pockets of the city.

Lavy and other landlords are accused by local residents, city politicians and small business owners of being major contributors to the wave of vacant storefronts plaguing such storied Montreal arteries as St-Denis Street, Ste-Catherine Street, and Park Ave.

The city last month began holding public consultations to gather suggestions on what to do about the estimated 15 per cent of street-level retail space that sits empty despite a growing population and booming economy. Those who appeared before the committee cited city taxes, lack of parking and changing consumer habits to explain the problem.

But many also expressed frustration with what they called avaricious landlords, who they say are snapping up buildings in popular neighbourhoods, forcing out long-standing tenants with rent hikes and then letting the storefronts sit empty.

Lavy says anyone who believes that doesn’t understand basic economics and the realities of running a business in Montreal.

“Are you joking?” he said in a recent interview at the suggestion his company purposefully lets storefronts sit empty. “We are willing to take … lower and lower rent. You think I’d rather pay my mortgage and city taxes and be empty?”

Buildings on popular streets such as St-Viateur are worth a fortune, he said, adding that former owners on the strip were more than happy to sell to him. When you factor in new mortgage payments, city taxes and renovation costs, landlords need to find tenants who can pay prices that reflect the market’s new value.

The empty store at the corner of St-Laurent and St-Viateur used to house a cafe and music venue selling a meatless menu to a mostly young and bohemian clientele. But Coop Le Cagibi was forced out in 2018 when the previous landlord jacked up the rent. The space has been empty since.

City councillor Richard Ryan is running the consultations and says the city doesn’t have the data to quantify the role real estate speculators and wealthy landlords are playing in the vacancy problem.

But Ryan, who represents the Mile End district where Le Cagibi was located, said there is “no reason” a renter can’t be found to replace it.

Roughly 14,000 workers around the neighbourhood shop and eat on St-Viateur daily, Ryan said in a recent interview. Mile End is also one of the most densely populated parts of the city. St-Viateur, he said, “has all the elements.”

Mark Lazar, a real estate developer with mixed-use properties across the city, said it’s easy to blame so-called greedy landlords for vacancies, but a deeper reflection on the matter reveals other causes.

A lot of vacancies on commercial arteries are big spaces that don’t respond to the current needs of the market, Lazar said in an interview.

Fifteen years ago many of these spaces were filled with spacious restaurants feeding large crowds, he said, but today “entrepreneurial young chefs” are opting for cozier spaces.

Additionally, landlords have to pay hefty upfront costs to renovate before tenants move in. “Today, the cost of (having) a tenant is not well understood,” Lazar said. “They think any tenant can walk in like they walk into an apartment that is already furnished.”

A business owner on Ste-Catherine Street who didn’t want to be named because she is in litigation with her landlord, said in an interview she had tried in vain a couple of years ago to negotiate an affordable rent for several unoccupied retail spaces on the street.

But at least four times, she said, the various real estate agents didn’t want to negotiate because the owners allegedly didn’t care whether it was rented or not. Even empty, the buildings were “just gaining value,” she was told.

But Lazar and Lavy say the main factor behind the vacancies is taxes.

Global real estate consultant firm, Altus Group, calculates that Montreal has the highest commercial real estate taxes among large Canadian cities.

Montreal taxes, Lavy said, “are completely out of whack for a retail operation. Retail is already destroyed because of the internet.”

Ryan and his committee are still collating data from an online survey and from the consultations. He couldn’t say when he’ll be able to propose recommendations to council or what they will include.

But, he said, “people are expecting us to do something.”

Ryan said he’s heard from fiscal experts that big landlords can write off losses associated with empty properties to reduce taxes on revenues from other buildings in their portfolio. Alternatively, he said, the big players have the financial cushion to let the space sit empty and wait until a major chain comes knocking with the means to pay the high rent.

Ron Rayside, with architecture firm Rayside Labossiere, filed a submission to Ryan’s committee, in which he suggested the city impose a tax on owners who let their storefronts sit empty for long periods of time, with the levy increasing the longer it is left empty.

A commercial artery is the heart of a neighbourhood, he said in a recent interview, and there is growing concern that too many are being allowed to wither. “It’s where people walk around, where there is life, where you can meet people,” he said.

Lavy said he had good news for those worried about St-Viateur: He found a business to replace Coop Le Cagibi. “I’m putting a lot of money into it. It’s going to be open by the summer,” he said.

“I can tell you every place I have on St-Viateur will be open by the summer. And I happen to love St. Viateur. Not like – love.”


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Montreal to fully ban plastic bags by end of 2020, mayor announces

shutterstock_1250226013e-360x240Given the urgent need to reduce the city’s environmental footprint, Montreal will move to fully ban the distribution of plastic bags by the end of 2020, Mayor Valerie Plante said Feb 5.

Plante told a council meeting that the current measures that limit retailers to selling thicker bags haven’t worked to reduce plastic waste.

“We have to reduce at the source, and that happens with behaviour changes,” Plante said.

In 2018, Montreal implemented a bylaw that banned merchants from giving out lightweight plastic bags with a thickness of less than 50 microns as well as biodegradable bags, which contain an additive that causes them to decompose in heat and light.

The hope was that offering only thicker bags would encourage people to reuse them, but Plante said that hasn’t happened.

She tasked the city’s director general to begin working to modify the existing bylaw in order to fully ban plastic bags by the end of the year.

“2020 is the last year of plastic bags in Montreal,” the mayor said.

The announcement comes as the province attempts to navigate a waste-management crisis with four Montreal-area recycling plants shutting their doors.

Plante said the recycling troubles were an “alarm” for the city that it needed to act.

“We have to develop what to do with that plastic, but to think that before we sent it to Asia and closed our eyes, saying, ‘I recycled’ … That doesn’t hold up any more,” she said.

Montreal became the first major Canadian city to ban plastic bags when its measures went into effect on Jan. 1, 2018.

Last year, Plante announced the city would also seek to ban single-use plastics and forbid grocery chains and other stores from throwing out edible food and useful clothing, as part of its five-year plan to significantly reduce waste.

On February 5, she said the bag ban was an idea whose time has come, pointing out that major retail chains such as IGA are already phasing out plastic bags.

“We can’t wait another 1,000 years to make decisions,” Plante wrote on her Twitter account.

She also encouraged other Quebec municipalities to follow suit and implement similar bans.


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Au Coin Duluth serves 250 craft beers and countless customers

Screen Shot 2019-11-27 at 10.38.30 AMMontreal dépanneur owner Clermont Cloutier believes in the power of a smile.

“Everybody appreciates one,” he says.  “A smile makes people feel good.”

It’s a lesson Cloutier says he learned early in a highly successful c-store career spanning four decades.

But it’s not just his smile that drives customers to Cloutier’s popular dépanneur Au Coin Duluth: it’s the beer. Here’s just one rave review from Yelp: “A great selection for the beer connoisseur. Whenever a QC microbrewery releases something difficult to find, they have it. This is the place to go when the common lager doesn’t suffice anymore, for discoveries and the occasional recommendation.”

And Cloutier’s beer customers are not just locals – Au Coin Duluth’s reputation has spread internationally.

A long history in convenience

The dépanneur owner never set out to become a convenience retailer, let alone a beer retailing connoisseur offering select tastings of new craft brews.

In the early 1980s Cloutier, a transport cost comptroller with the James Bay Energy Corporation, started looking around for a new career when the massive hydroelectric project ended and his position was eliminated.

“I really wanted to have a business of my own,” recalls Cloutier, who grew up in Ville d’Anjou in east-end Montreal.

He ended up buying a Provi-soir franchise in nearby Pointe-aux-Trembles for $20,000.

Looking back, Cloutier says it was his best investment ever. “I didn’t know anything about the convenience store business,” he says. “Provi-soir was a great school and provided great support.”

Cloutier also discovered the thing he enjoys most about the c-store business: building relationships with people. “Not just with clients but with suppliers and other people you deal with,” he says.

Cloutier and his former wife and partner, Jeannine Turcotte, each worked 50-60 hours a week at the store while raising two boys.

They later bought a second Provi-soir location that Jeannine managed. “We each had our own store,” says Cloutier. “It’s a lot of work and it’s tough on a marriage.”

Separated from Jeannine and tired of big dividends to the franchisor, Cloutier gave up the two stores and started his own store in the Plateau district near Montreal’s downtown.

“I really like the area,” Cloutier says about the Plateau, one of the most densely populated urban areas in Canada. “There’s lots of action.”

He ran the 400-sq.-ft store, called l’Épicérie-Boucherie, until 2008, when he bought a nearby store called Au Coin Duluth from Katherine Boucher.

“She was new in the business and I helped her out – but then she became my girlfriend,” quips Cloutier.

Craft beers are king

Screen Shot 2019-11-27 at 10.38.52 AMIt was at Au Coin Duluth that Cloutier really hit his stride as an energetic and innovative dépanneur owner.

Together with his son Yan, Cloutier joined the Metro banner and doubled the store’s size. Notably, they brought in fridges and became one of the first stores in Montreal to specialize in craft beers from Quebec microbreweries.

“A (government-run liquor store) opened near us so we decided to specialize in beer,” says Cloutier.  “It was a smart move.”

Screen Shot 2019-11-27 at 10.44.34 AMToday the store carries some 250 Quebec craft beers, plus another 150 kinds of commercial beer. It also holds craft beer tastings, a novelty that has earned Au Coin Duluth rave reviews on social media and a Top 10 ranking among Montreal c-stores on Yelp.

Cloutier credits both Yan and long-time employee David Samuel for building the store’s selection of craft beer and Quebec wines, which he says are “a perfect fit” for a store surrounded by restaurants that allow patrons to bring their own beer and wine.

In 2011, the dépanneur owner Cloutier spent more than $1 million to build a stylish new 4,000-sq.-ft. food store in a condo development called Station 54 in nearby Rosemont. Operated under the Sobeys banner by Yan and his wife, Nadia Laforge, the aptly-named Marché Station 54 stocks the same craft beer and wine selection as Au Coin Duluth.

Screen Shot 2019-11-27 at 10.44.01 AMBut Cloutier, who turns 70 next year, is now winding down his retailing career.

“I’ve opened my stores myself every morning at 6:30 for 30 years,” he says.  “But on July 1 I started opening at 7 a.m. and I work until 9 or 10 before I leave to do other things.

“My plan is start opening an hour later over the next few years until I’m at zero.  Then I’ll retire.”

 

Originally published in the Sept/Oct 2018 issue of Convenience Store News Canada.


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Montreal to ban stores from dumping unsold food

Montreal is hoping to stop perfectly good food from ending up in landfills as part of a plan to significantly cut waste by targeting the source.

The city’s point person on the environment announced the proposed measures Thursday as part of a five-year master plan for waste management between 2020 and 2025.

Coun. Laurence Lavigne Lalonde, the executive committee member in charge of ecological transition, cited an urgency to act due to climate change and the fact that the city’s main dump is slated to shutter by 2029.

“The plan that we’re proposing today will enable us to achieve the ambitious targets that we set in terms of reducing greenhouse gas emissions and managing residual material,” Lavigne Lalonde said.

It doesn’t make sense, she said, that perfectly consumable items end up in the trash while children and others go hungry.

“We will prohibit large grocery chains, educational institutions and hospitals from throwing away food they no longer think is fresh,” Lavigne Lalonde said.

Food waste is a widespread issue across the country: according to a study commissioned earlier this year by Toronto-based charity Second Harvest, one-third of Canada’s discarded food could be recovered.

Quebec already has a supermarket recovery program in place that some stores take part in, sending food to various shelters. Lavigne Lalonde said the city wants to work with the province to ensure such programs are expanded.

The move is the latest in Montreal’s attempts to reduce its waste–and by extension, its carbon footprint. In April, the city announced it would introduce a bylaw banning single-use items such as plastics and polystyrene foam containers by spring 2020–promising a slow transition to allow businesses to make the switch.

In 2018, it issued a ban on plastic bags that covers the distribution of lightweight bags with a thickness of less than 50 microns as well as biodegradable bags, which contain an additive that causes them to decompose in heat and light.

Lavigne Lalonde said the goal is to make it easier for citizens to reduce their waste.

Parenteau said food sellers could be subject to yet-to-be determined fines if they violate the new rules.

He pointed to France, where laws obliges grocery stores to donate edible food and levies hefty fines if they don’t, but added in Montreal, that’s not the main goal of the law.

“The first goal is not to fine, but to change the mentality,” Parenteau said.

A public consultation will be held on the plan, but the city’s objectives are to divert up to 70% of residual waste away from landfills by 2025 and 85% by 2030.

In that time, the city wants to reduce the amount of waste produced by each Montrealer by 10% in 2025 and 20% in 2030–which works out to 10 kilograms per citizen per year.


Dépanneur Le Pick-Up: The heart of the community

 

 

Screen Shot 2019-07-18 at 1.46.37 PMSometimes the heart trumps reason.

Just ask Montreal dépanneur owner Penny Pattison.

Ten years ago she and friend/business partner Bernadette Houde were aspiring entrepreneurs looking for a small business they could buy and run together.

 “We were both at a point in our lives where we wanted to do something different,” recalls Pattison, who worked in business management. Houde—aka Bernie Bankrupt from the band Lesbians on Ecstasy—previously owned and operated a café.

The duo’s search led to Chez Maurice, a once-popular convenience store and lunch counter in a hard-luck industrial area north of downtown Montreal, but notably close to the Jean-Talon Market, Little Italy and the bourgeois Mile End neighbourhood.

 “All the needle trade businesses in the area were gone and the store wasn’t doing very well, which is why it was for sale,” says Pattison.  “From a strictly business standpoint it didn’t look too promising. But the store looked cute, we had friends in the area and we really believed the neighbourhood needed a place like this.  It was a unique opportunity and we went for it.” 

They changed the name to Dépanneur Le Pick-Up, but otherwise Pattison and Houde kept the business looking and operating much the way it had since it opened in the 1950s.

Screen Shot 2019-07-18 at 1.46.57 PM“We kept the original lunch counter and stools, which we love and really give the place a lot of charm and make it unique—there just aren’t many places like this anymore,” says Pattison. “The business was really centred on the food.  And we kept everything from the original menu, like burgers, steak subs, hot dogs and breakfast sandwiches, which are the most popular items. There’s no fries or anything like that. We don’t do any deep frying.”

The partners also maintained the popular variety of items that stock the store’s fridges and shelves, including beer, wine, soft drinks, chips, candy bars and snacks, as well as cigarettes and simple household items like toilet paper. “There are two large grocery stores nearby that have everything and are open all the time, so we just stock the essentials,” says Pattison.  

Much to Pattison and Houde’s delight (and perhaps due in part to the confidence and vibe they brought to the neighbourhood) Dépanneur Le Pick-Up is now a hub in what’s considered the hippest square-mile enclave on the Island of Montreal.

Rock-bottom rents in the area’s abandoned industrial buildings attracted a host of new businesses that span garages, body shops, ethnic restaurants, small food processing companies, white collar professionals and even a documentary production company that sometimes works with Hollywood stars (Bill Pullman was a mealtime regular while in town filming).

Screen Shot 2019-07-18 at 1.47.42 PM“The neighbourhood is very popular and there’s a really dynamic mix of businesses and people,” says Pattison.  “And, many of our suppliers—the butcher, the coffee maker, the fishmonger—are within walking distance, as is the Jean Talon Market.  How cool is that?”

Equally cool is the nickname—Mile-Ex—bestowed on the area by Montreal media. The buzz and action drive a steady stream of customers through Dépanneur Le Pick-Up, where convenience item sales account for about a third of revenue, but fresh food is the big attraction.

“The items on the original menu remain popular and so are the things we’d added like good coffee and fresh baked goods that we make here,” says Pattison.  “We also added picnic tables to seat a dozen more people outside at lunch. There are always people there when the weather’s nice.”

During the first few years, the owners worked the store all day every day, but today responsibilities are shared with the dozen or so employees hired during the busy summer months. Pattison and Houde also own and operate a nearby gay bar called Alexandraplatz, which is open most nights from May to October. 

“Over time we’ve kind of stepped back into a more managerial role,” says Pattison of Dépanneur Le Pick-Up’s evolution.  “We’re really happy with how things have turned out.”

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Screen Shot 2019-07-18 at 1.47.23 PM3 Tips:

  1. Respect your customer base. “Know what they want and what are looking for.”
  2. A fair product for a fair price.  “That’s been our motto from day one. It’s who we are.”
  3. Hire good people.  “You want people who like what they do and will help make the work environment more pleasureful.”

 


Marché G. Lalime features Montrealers’ favourites

Maximilien Lalime says location, quality food and personalized customer service certainly help to explain the continued success of his family’s third-generation convenience store and speciality market near downtown Montreal.

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Patrick and Maximilien Lalime.                           Photos: Chantale Lecours

But he credits his family’s devotion to the business and their ability to stay in step with the times for making Marché G. Lalime a local institution for the past 60 years.

“We’ve evolved with the neighbourhood and made changes to meet people’s demands,” says Maximilien, a 32-year-old father of three and grandson of store founder Gilles Lalime. He has worked for his father Daniel Lalime, the current store owner, for more than a decade.

“We listen to our clients and try to offer them the things they want and need,” says Maximilien – Max to family, friends and store regulars.

Fresh food sells

Screen Shot 2019-06-18 at 12.10.28 PMA case in point is the store’s introduction a year ago of a new meat pie made with shredded beef bourguignon.

The store sells – and is renowned for – a wide selection of homemade food items and prepared meals that members of the Lalime family make fresh on an almost daily basis.

“None of us thought it would do well,” Max says about the shredded beef pie, which was a spur-of-the-moment idea to recoup an overcooked beef bourguignon. “But it’s done great. We sell a ton of them now.”

The new product bolsters the store’s lineup of top-selling dishes like lasagna, tortière (meat pies), ragout, shepherd’s pie, vegetarian meals, and salads.  

Its most popular items, however, are home-style sandwiches made mostly with sliced white bread.  

The runaway bestseller is the “Club-matin,” a toasted, three-decker breakfast sandwich that sells for only $2.99 – the best food bargain in the city according to store customers, says Max.

Its iconic club sandwich has also earned the store local fame, helping to drive the occasional sales of t-shirts and baseball caps emblazoned with the Marché G. Lalime logo.

“People come from all around to get our food,” says Max.  “It always smells good in our store and there is always a good vibe.”

 

From meat to much more

That’s a big change from the store that his grandfather Gilles, a butcher by trade, opened in 1959 on Boulevard St Laurent, a busy north-south commercial artery that spans the width of the island of Montreal at its centre point.

Located at the junction of three big city boroughs – Outremont, Le Plateau and Rosemont – the original store supplied mostly fresh meat products to the many large working-class families who lived in the area.

After moving the store 30 years ago to its present location a few hundred metres south at the corner of Beaubien Street, the Lalimes added everyday grocery items, plus lottery tickets, wine and beer. They also started making and selling homemade dishes of popular Québécois foods.

 “My grandad and dad realized that people were too busy and no longer had time to make the traditional foods they like,” says Max. “So they decided to try and fill that need.”

 From the get-go, that food production has been a family affair for the Lalimes.  

Daniel’s brother Patrick, for example, comes into the store most mornings at 3 a.m. to make and fill the cooler with 100 sandwiches or more, often with the help of his wife.

 That doesn’t include the side orders of toast for $1 and the dozens of “Club-matins” and other made-to-order sandwiches that start going out the door with overnight and early-bird workers as soon as the store opens at 5 a.m.

Daniel, his sister Ginette and three of Max’s cousins help to make and fill food orders and to staff the store during the day until closing time at 11 p.m.

Daniel’s wife, Marie-Claude, makes vegetarian plates at home that Daniel brings in to the store.

According to Max, those plates, which were added to the store’s food line a few years ago in response to the growing vegan movement, have proven wildly popular. 

“The idea for a vegetarian plate was on our radar, we talked about it and then – boom! – we introduced it,” says Max, who handles the store’s cash and manages everything from traffic flow and home deliveries by bike to lottery tickets and store inventory. “That’s how we’ve always done it for new things and it has worked well.  I don’t see why we’d change that approach.”

 

Marché G. Lalime’s top tips:

#1. Promote your strengths. “We are always telling our clients how good our food is and what a great deal it is – and they always agree. It’s important to make that kind of a claim – but only if it’s true, and in our case, it is.”

#2. Know your customers. “You need to be interested and attentive to everyone who walks through the door on both a personal and professional level. But that interest has to be genuine.”

#3. Like what you do. “It takes love and acceptance of what you do to keep employee morale high and make your customers feel welcome when they come in the store. This is a business like any other – it functions best with a positive, winning attitude.”

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