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Winnipeg Free Press
26-07-2025
- Business
- Winnipeg Free Press
Warpath to profitability?
Opinion The defence industry is often overlooked by investors. It's perceived as boring compared with technology or worse, it's just an unethical way to put profit in the portfolio. Since the February 2022 invasion of Ukraine by Russia, however, the defence industry has drawn significant investor interest. Notably, the perception has changed. That includes some of those who might have felt investing in defence was distasteful; they now see it as a needed buttress against rising authoritarianism. Of course, another shift is financial — based on the forecast injection of hundreds of billions of dollars in additional spending by NATO members. Pexels NATO members (including Canada) are forecast to invest hundreds of billions of dollars in additional annual spending in defence in the years to come. Canada alone is expected to increase military spending about $70 billion annually to meet its most recent defence commitment of five per cent of gross domestic product. The big question for many intrigued investors is whether they've already missed the warship. 'Our view is that type of information gets incorporated into market prices really quickly,' says Ben Felix, chief investment officer with PWL Capital in Ottawa. 'The implication of that is by the time you read about it in a Free Press article, any advantage that you may have got by investing in that theme is already gone.' That said, the defence industry landscape and recent performance are still of interest to inquisitive investors who might consider putting their money to work when prices pull back periodically. For the time being, however, many defence company share prices have hit lofty heights, including a handful of Canadian firms such as satellite technology company MDA Space Ltd. Its share price is up more than 50 per cent year to date. As well, aerospace company Bombardier's share price 'has almost doubled in recent months, so obviously, all of the talk that has been going on is certainly helping,' says Brian Donovan, New Brunswick-based president of provider of valuation models for investors. 'It tells you that there is an interest shift into this space.' StockCalc tracks performance of thousands of North American equities, including about eight Canadian firms with defence industry revenues. One even has a footprint in Winnipeg: Magellan Aerospace Corp., which makes components for military aircraft. Its share price is up more than 80 per cent YTD. If those gains sound lofty, consider some firms listed in the United States and Europe. Notably, artificial intelligence firm Palantir is up 106 per cent this year. Even more impressive, its share price is up nearly 1,600 per cent over the last five years. A key driver is its defence contracts with the U.S. and partnerships with other technology and manufacturing companies involved in defence. That includes L3 Harris Technology, which, like Palantir, operates in many industries. Its drone technology business is a big defence revenue driver. (That said, its share price growth YTD is much less than other defence stocks.) In Europe, the most notable defence growth story is manufacturing conglomerate Rheinmetall AG. Among the many defence technologies it manufactures are Challenger and Leopard tanks. Its share price is up about 200 per cent YTD, and more than 2,000 per cent in the last five years. The big driver is Germany planning to spend more than a trillion dollars on defence in the next five years. That investors are now turning onto the defence sector is understandable (given the headlines) and somewhat ironic at the same time because it has not been a lacklustre industry for long-term performance. Publicly traded companies involved in the U.S. defence industry have collectively provided returns on an annual basis that have outpaced the S&P 500, says Scott Sacknoff, manager of the SPADE Defense Index in Washington, D.C. 'There is a long history of defence outperforming.' And it very well could continue to outperform, given the U.S. defence budget is expected to surpass US$1 trillion annually for the first time in history, he adds. If anyone has deep knowledge of the defence sector, it's Sacknoff. The SPADE Index, which he manages, consists of leading U.S.-based defence companies and has outperformed the S&P 500 by roughly more than 1,000 basis points (or 100 percentage points) over the last 25 years. Yet until Russian President Vladimir Putin decided to invade Ukraine in 2022, defence was a profitable but sleepy market corner. The explosion in defence spending has changed that, leading to greater investment and even a rush of new investment products, notably exchange-traded funds (ETFs). Prior to 2022, investors largely had three ETFs to choose from, including one of the longest running: Invesco Aerospace & Defense ETF. For investors looking for exposure, the Invesco product is worth a look. Since launching in 2005, it has had steady growth. Investment data firm Morningstar data shows US$10,000 invested in 2005 would be worth nearly US$120,000 today. In turn, the ETF has Morningstar's highest rating. Sacknoff notes the ETF's performance is driven by the underlying SPADE index, which uses a modified market cap weighting to address the downsides of passive investing that lead to over-concentration in overvalued stocks. 'In simplest terms, this involves ensuring that large companies aren't too large, and small companies aren't too small.' He adds the index's annualized return over 15 years is 17 per cent. 'You have never lost money in any product tracking our index if you invested and held onto it for at least three years.' Yet one might ask, would that still hold true today? 'The big question is whether earnings and revenues will catch up to the high valuations,' Sacknoff says. Only time will tell. Yet not all companies on the index are surging in price, including Lockheed Martin, manufacturer of the F-35 fighter that Canada and other NATO countries have contracts to buy. Its share price is actually down slightly this year. Wednesdays A weekly dispatch from the head of the Free Press newsroom. What's more, U.S. President Donald Trump's scattershot economic policy is likely to lead to downside market volatility, presenting buying opportunities for defence companies. Yet their long-term tailwind is likely not going away soon. For the time being, however, this high-flying sector seems more of a minefield than a warpath to profitability. Joel Schlesinger is a Winnipeg-based freelance journalist joelschles@
Hamilton Spectator
08-07-2025
- General
- Hamilton Spectator
Salmon group says aquaculture companies stashing garbage along Newfoundland coast
ST. JOHN'S - An eastern Canadian conservation group is calling for a moratorium on aquaculture expansion in Newfoundland and Labrador, alleging fish-farming companies are stashing plastic garbage along the province's remote southern coastline. In a report summary released Tuesday, the Atlantic Salmon Federation said satellite images suggest aquaculture companies appear to have left broken cages, rope and other debris in six sites along Newfoundland's south coast. The New Brunswick-based group is demanding the federal fisheries minister halt aquaculture expansion in the province until the companies get their waste under control, said spokesperson Neville Crabbe. Under the Fisheries Act, the federal government can investigate or prosecute anyone who disrupts or causes harm to fish habitat. 'Fix your problems, utilize your existing sites, optimize what you have,' Crabbe said in an interview. 'The industry is not going anywhere right now in Newfoundland and Labrador, but nor should it go anywhere else.' The federal Fisheries Department said the Newfoundland and Labrador government is in charge of regulating the aquaculture in the province, and it respects that authority. The department 'recognizes the concerns regarding wild and farmed salmon interbreeding in Newfoundland and Labrador, specifically along the south coast of Newfoundland, and remains committed to collaborating with partners to mitigate associated risks to wild Atlantic salmon populations,' said an email from the department Tuesday. Newfoundland's south coast is known for its towering fiords and small communities dotting its shores, some of which are only accessible by boat or plane. The aquaculture industry is a valued source of jobs in the area. The Atlantic Salmon Federation has been monitoring aquaculture waste in the region for more than a year. Crabbe said the federation is not calling for the companies to shut down or cut jobs. In its latest investigation, the federation worked with Planetixx, a U.K.-based climate data and analytics firm. The team used more than 60,000 satellite images of the area, spanning more than a decade, to train an artificial intelligence model to recognize sea cage rings — the frames that support large nets inside which salmon is farmed. The AI model could then identify sites with abnormalities, such as misshapen rings or haphazard arrangements. When the AI identified a site with anomalies, the researchers viewed high-definition images of the area from Maxar Technologies' satellite constellations. Through this process, they identified six sites they allege were dumping grounds for 'broken, degraded salmon farm equipment,' the report said. They found no equipment at any time between March 2020 to May 2025 in half of the 106 licensed sites analyzed, indicating the areas were inactive. For Crabbe, that suggests the companies don't need to expand into other areas. Last year, members of the federation visited a cove known locally as The Locker, near Gaultois, N.L., and captured images of discarded plastic bags, blue barrels, rope, buoys and old sea cages. Crabbe said the province ordered companies operating in the area to clean it up earlier this year, though the provincial Fisheries Department did not respond to a request for information about the order. He flew over the site in a helicopter in February and saw the debris had been cleared. But when he returned last month by boat, it was once again full of trash, he said. A remotely operated vehicle took images of a sea cage and netting sunken beneath the water. 'The buoyant structure appears to be anchored to the sea floor, unable to float up, potentially indicating a deliberate sinking,' the federation's report summary on Tuesday said. They also found garbage at a site in nearby Roti Bay, Crabbe said. 'It's very clear in their licences, and in the regulations governing the industry, that they have to have waste management plans,' he said. 'The discovery of that sunken cage in The Locker, at the very least, should compel authorities to go and survey these areas to see what else is under the water.' In a news release Monday, the Newfoundland Aquaculture Industry Association said the provincial regulator allows companies to store unused equipment, including sea cages, in leased marine areas before they are dismantled and recycled. 'Plastic sea cages may be held at leased sites until vessel and staff resources are available to safely transport them to shore-based yards and recycling facilities,' the release said. Association director Keith Sullivan said fish-farming companies in the area are dealing with significant amounts of equipment left by previous operators, who were governed by different rules. Efforts are ongoing to remove that waste from the water and have it properly recycled, Sullivan said in an interview. Companies operating under current rules must demonstrate to the provincial government that they will have the money to clean up their sites when their leases come to an end, he added. Crabbe disagreed that the waste was simply being stored, and likened it to tossing a coffee cup in a ditch and saying he was storing it there. 'This equipment was not being temporarily stored for removal and proper disposal. Some of it has been there since 2011, and possibly before,' he told reporters in Ottawa on Tuesday. Sullivan accused the salmon federation of deliberately misleading the public, and he took issue with Crabbe's coffee cup analogy. 'Actually, it's much more like when you're recycling your containers, putting your containers in the blue bag for recycling pickup,' he said. This report by The Canadian Press was first published July 8, 2025. Error! 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Winnipeg Free Press
08-07-2025
- General
- Winnipeg Free Press
Salmon group says aquaculture companies stashing garbage along Newfoundland coast
ST. JOHN'S – An eastern Canadian conservation group is calling for a moratorium on aquaculture expansion in Newfoundland and Labrador, alleging fish-farming companies are stashing plastic garbage along the province's remote southern coastline. In a report summary released Tuesday, the Atlantic Salmon Federation said satellite images suggest aquaculture companies appear to have left broken cages, rope and other detritus in six sites along Newfoundland's south coast. The New Brunswick-based group is demanding the federal fisheries minister halt aquaculture expansion in the province until the companies get their waste under control, said spokesperson Neville Crabbe. 'Fix your problems, utilize your existing sites, optimize what you have,' Crabbe said in an interview. 'The industry is not going anywhere right now in Newfoundland and Labrador, but nor should it go anywhere else.' Newfoundland's south coast is known for its towering fiords and small communities dotting its shores, some of which are only accessible by boat or plane. The aquaculture industry is a valued source of jobs in the area. The Atlantic Salmon Federation has been monitoring aquaculture waste in the region for more than a year. Crabbe said the federation is not calling for the companies to shut down or cut jobs. In its latest investigation, the federation worked with Planetixx, a U.K.-based climate data and analytics firm. The team used more than 60,000 satellite images of the area, spanning more than a decade, to train an artificial intelligence model to recognize sea cage rings — the frames that support large nets inside which salmon is farmed. The AI model could then identify sites with abnormalities, such as misshapen rings or haphazard arrangements. When the AI identified a site with anomalies, the researchers viewed high-definition images of the area from Maxar Technologies' satellite constellations. Through this process, they identified six sites they allege were dumping grounds for 'broken, degraded salmon farm equipment,' the report said. They found no equipment at any time between March 2020 to May 2025 in half of the 106 licensed sites analyzed, indicating the areas were inactive. For Crabbe, that suggests the companies don't need to expand into other areas. Last year, members of the federation visited a cove known locally as The Locker, near Gaultois, N.L., and captured images of discarded plastic bags, blue barrels, rope, buoys and old sea cages. Crabbe said the province ordered companies operating in the area to clean it up earlier this year, though the provincial Fisheries Department did not respond to a request for information about the order. He flew over the site in a helicopter in February and saw the debris had been cleared. But when he returned last month by boat, it was once again full of trash, he said. A remotely operated vehicle took images of a sea cage and netting sunken beneath the water. 'The buoyant structure appears to be anchored to the sea floor, unable to float up, potentially indicating a deliberate sinking,' the federation's report summary on Tuesday said. They also found garbage at a site in nearby Roti Bay, Crabbe said. Wednesdays Columnist Jen Zoratti looks at what's next in arts, life and pop culture. 'It's very clear in their licences, and in the regulations governing the industry, that they have to have waste management plans,' he said. 'The discovery of that sunken cage in the locker, at the very least, should compel authorities to go and survey these areas to see what else is under the water.' In a news release Monday, the Newfoundland Aquaculture Industry Association said the provincial regulator allows companies to store unused equipment, including sea cages, in leased marine areas before they are dismantled and recycled. 'Plastic sea cages may be held at leased sites until vessel and staff resources are available to safely transport them to shore-based yards and recycling facilities,' the release said. Abandoned sites operated by different owners under different rules 'have been and are being addressed,' it said. This report by The Canadian Press was first published July 8, 2025.
Hamilton Spectator
23-05-2025
- Business
- Hamilton Spectator
Coalition urges Carney to drop nuclear from energy plan
A coalition of First Nations, physicians and environmental organizations is ramping up pressure on Prime Minister Mark Carney to drop nuclear energy from his 'energy superpower' strategy, warning it comes with high costs, long delays and long-term risks. In an open letter , dozens of organizations urge the federal government to halt funding for nuclear development and instead prioritize renewables, energy efficiency and storage. The letter warns that new nuclear projects are likely to increase electricity costs while delaying meaningful climate action. 'We are concerned that you may be unduly influenced by the nuclear and fossil industry lobbies,' reads the letter. During the federal election campaign, Carney pledged to make Canada 'the world's leading energy superpower ,' focusing on clean and conventional energy. His platform promised faster project approvals and a national clean electricity grid, among other energy promises. The coalition sent their letter in an effort to ensure Carney does not invest more significantly in nuclear energy, as he prepares to set his government's agenda and ministers' mandates. While Carney's plan doesn't mention nuclear energy, he praised it during the first leaders' debate and referenced two companies in the sector he previously worked with at Brookfield Asset Management. Nuclear energy is frequently cited as a clean, reliable alternative to fossil fuels. Agencies from the UN Intergovernmental Panel on Climate Change to the International Energy Agency expect nuclear power to have a role in the energy transition. Nuclear power has been part of Canada's electricity mix since the 1960s, with 22 reactors at five plants across three provinces now supplying about 15 per cent of the country's electricity . The federal government — through the Canada Infrastructure Bank — has committed $970 million in low-cost financing to Ontario's Darlington New Nuclear Project, which aims to build Canada's first grid-scale small modular reactor. The federal government also invested millions in Moltex Clean Energy , a New Brunswick-based company developing a technology called Waste to Stable Salt, which aims to recycle nuclear waste into new energy. Jean-Pierre Finet, spokesperson for le Regroupement des organismes environnementaux en énergie, one of the organizations that signed the open letter, said he worries about the long-term future of any nuclear plants built today without a plan for their waste. 'We object to our federal taxpayer dollars being spent on developing more nuclear reactors that could be abandoned in place, ultimately transforming communities into radioactively contaminated sites and nuclear waste dumps that will require more federal dollars to clean up,' Finet said. Gordon Edwards, president of the Canadian Coalition for Nuclear Responsibility and a longtime nuclear critic, says the federal government is backing the slowest and most expensive energy option on the table. 'In a climate emergency, you have to invest in things that are faster and cheaper,' Edwards said. 'Canada hasn't built new reactors in decades. There's no practical experience left, and what's being proposed now is largely speculative.' 'We're very concerned about a misappropriation of public money and investment in what we see as a losing strategy,' Edwards said, stressing that the coalition is not asking private companies to stop building plants — but rather asking the federal government to stop subsidizing them. Canada's electricity demand is expected to double — or even triple — by 2050 , driven by population growth, electrified transportation and industrial decarbonization. In Ontario, the Independent Electricity System Operator projects a 75 per cent increase in demand by mid-century. To meet this demand, the Ford government is heavily investing in nuclear power to meet Ontario's growing electricity demand, banking on small modular reactors and nuclear refurbishments as key pillars of its long-term energy strategy. But Edwards points to the Ford government's cancellation of over 750 renewable energy contracts in 2018 , and argues that those lost projects could have already been delivering clean, reliable power today, instead of relying on increasing nuclear energy. Much of the current controversy focuses on Ontario's Darlington New Nuclear Project, as growing skepticism around the cost of small modular reactors mirrors global concerns. In the US, two nuclear reactors in South Carolina were abandoned after $12.5 billion (CAD) had already been spent, triggering the bankruptcy of Westinghouse Nuclear — now owned by Canadian firms Brookfield and Cameco . Meanwhile, two completed Vogtle reactors in Georgia came in at $48 billion, more than double the original $19-billion estimate, making them among the most expensive infrastructure projects in US history. In the UK and Europe, new nuclear power project efforts are facing delays , budget overruns, or outright cancellations. Meanwhile, a report from the Ontario Clean Air Alliance estimates that electricity from new nuclear power will cost up to 3.6 times more than onshore wind, three times more than solar, and nearly twice as much as offshore wind. It argues that Ontario could meet its energy needs more cheaply and quickly by expanding renewable generation and grid connections with neighbouring provinces. Ontario Power Generation has pushed back against this criticism, saying the Darlington small modular reactor will reuse existing infrastructure, avoid land-use issues common to wind and solar, and help maintain grid stability with 24/7 baseload power. The company argues that renewables require large land areas and new transmission lines, and may face more complex supply chain risks. Still, some energy experts say the small modular reactor path is out of sync with climate timelines and economic realities. 'Nuclear is a very high-cost and high-risk option,' said Mark Winfield, professor at York University and co-chair of its Sustainable Energy Initiative. 'These subsidies divert resources from much less costly and lower-risk options for decarbonizing energy systems. The focus on nuclear can delay more substantive climate action.' Winfield calls small modular reactors 'a distraction and likely a dead end,' warning that the technology carries catastrophic accident, safety, security and weapons proliferation risks not found in any other form of energy production. Winfield said Canada lacks a significant comparative advantage in energy production beyond its legacy hydro assets, and remains a relatively high-cost fossil fuel producer. 'There is no reason to believe that we would be better at other energy production technologies (nuclear, renewables) than anyone else,' Winfield added in an email.
National Observer
23-05-2025
- Business
- National Observer
Coalition urges Carney to drop nuclear from energy plan
A coalition of First Nations, physicians and environmental organizations is ramping up pressure on Prime Minister Mark Carney to drop nuclear energy from his 'energy superpower' strategy, warning it comes with high costs, long delays and long-term risks. In an open letter, dozens of organizations urge the federal government to halt funding for nuclear development and instead prioritize renewables, energy efficiency and storage. The letter warns that new nuclear projects are likely to increase electricity costs while delaying meaningful climate action. 'We are concerned that you may be unduly influenced by the nuclear and fossil industry lobbies,' reads the letter. During the federal election campaign, Carney pledged to make Canada 'the world's leading energy superpower,' focusing on clean and conventional energy. His platform promised faster project approvals and a national clean electricity grid, among other energy promises. The coalition sent their letter in an effort to ensure Carney does not invest more significantly in nuclear energy, as he prepares to set his government's agenda and ministers' mandates. While Carney's plan doesn't mention nuclear energy, he praised it during the first leaders' debate and referenced two companies in the sector he previously worked with at Brookfield Asset Management. Nuclear energy is frequently cited as a clean, reliable alternative to fossil fuels. Agencies from the UN Intergovernmental Panel on Climate Change to the International Energy Agency expect nuclear power to have a role in the energy transition. Nuclear power has been part of Canada's electricity mix since the 1960s, with 22 reactors at five plants across three provinces now supplying about 15 per cent of the country's electricity. In an open letter, dozens of organizations urge the federal government to halt funding for nuclear development and instead prioritize renewables, energy efficiency and storage. The federal government — through the Canada Infrastructure Bank — has committed $970 million in low-cost financing to Ontario's Darlington New Nuclear Project, which aims to build Canada's first grid-scale small modular reactor. The federal government also invested millions in Moltex Clean Energy, a New Brunswick-based company developing a technology called Waste to Stable Salt, which aims to recycle nuclear waste into new energy. Jean-Pierre Finet, spokesperson for le Regroupement des organismes environnementaux en énergie, one of the organizations that signed the open letter, said he worries about the long-term future of any nuclear plants built today without a plan for their waste. 'We object to our federal taxpayer dollars being spent on developing more nuclear reactors that could be abandoned in place, ultimately transforming communities into radioactively contaminated sites and nuclear waste dumps that will require more federal dollars to clean up,' Finet said. Gordon Edwards, president of the Canadian Coalition for Nuclear Responsibility and a longtime nuclear critic, says the federal government is backing the slowest and most expensive energy option on the table. 'In a climate emergency, you have to invest in things that are faster and cheaper,' Edwards said. 'Canada hasn't built new reactors in decades. There's no practical experience left, and what's being proposed now is largely speculative.' 'We're very concerned about a misappropriation of public money and investment in what we see as a losing strategy,' Edwards said, stressing that the coalition is not asking private companies to stop building plants — but rather asking the federal government to stop subsidizing them. Canada's electricity demand is expected to double — or even triple — by 2050, driven by population growth, electrified transportation and industrial decarbonization. In Ontario, the Independent Electricity System Operator projects a 75 per cent increase in demand by mid-century. To meet this demand, the Ford government is heavily investing in nuclear power to meet Ontario's growing electricity demand, banking on small modular reactors and nuclear refurbishments as key pillars of its long-term energy strategy. But Edwards points to the Ford government's cancellation of over 750 renewable energy contracts in 2018, and argues that those lost projects could have already been delivering clean, reliable power today, instead of relying on increasing nuclear energy. International concerns echo at home Much of the current controversy focuses on Ontario's Darlington New Nuclear Project, as growing skepticism around the cost of small modular reactors mirrors global concerns. In the US, two nuclear reactors in South Carolina were abandoned after $12.5 billion (CAD) had already been spent, triggering the bankruptcy of Westinghouse Nuclear — now owned by Canadian firms Brookfield and Cameco. Meanwhile, two completed Vogtle reactors in Georgia came in at $48 billion, more than double the original $19-billion estimate, making them among the most expensive infrastructure projects in US history. In the UK and Europe, new nuclear power project efforts are facing delays, budget overruns, or outright cancellations. Meanwhile, a report from the Ontario Clean Air Alliance estimates that electricity from new nuclear power will cost up to 3.6 times more than onshore wind, three times more than solar, and nearly twice as much as offshore wind. It argues that Ontario could meet its energy needs more cheaply and quickly by expanding renewable generation and grid connections with neighbouring provinces. Ontario Power Generation has pushed back against this criticism, saying the Darlington small modular reactor will reuse existing infrastructure, avoid land-use issues common to wind and solar, and help maintain grid stability with 24/7 baseload power. The company argues that renewables require large land areas and new transmission lines, and may face more complex supply chain risks. Still, some energy experts say the small modular reactor path is out of sync with climate timelines and economic realities. 'Nuclear is a very high-cost and high-risk option,' said Mark Winfield, professor at York University and co-chair of its Sustainable Energy Initiative. 'These subsidies divert resources from much less costly and lower-risk options for decarbonizing energy systems. The focus on nuclear can delay more substantive climate action.' Winfield calls small modular reactors 'a distraction and likely a dead end,' warning that the technology carries catastrophic accident, safety, security and weapons proliferation risks not found in any other form of energy production. Winfield said Canada lacks a significant comparative advantage in energy production beyond its legacy hydro assets, and remains a relatively high-cost fossil fuel producer. 'There is no reason to believe that we would be better at other energy production technologies (nuclear, renewables) than anyone else,' Winfield added in an email.
