CIPMA Connection

March | 2020

CIPMA is staying up-to-date on COVID-19 and its impact on the sector.

Please visit CIPMA.ORG for recent updates MESSAGE FROM THE PRESIDENT JENNIFER STEWART

CIPMA MEMBER SPOTLIGHT BRUCE ALLEN PRESIDENT CANADIAN TIRE PETROLEUM

ADVOCACY CORNER NEWS UPDATES MEMBER UPDATES

FULL MEMBERS

ASSOCIATE MEMBERS

CONNECTION CONTENTS

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| PRESIDENTS CORNER

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| UPCOMING EVENTS

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| MEMBER PROFILE

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| ADVOCACY CORNER

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| NEWS UPDATES

MISSION CIPMA’s mission is to ensure the sustainability and growth of a healthy and viable independent fuel marketing and distribution sector at both the wholesale and retail levels in Canada. Our specific goals include: Ensuring that independent fuel marketers thrive and have the opportunity to earn a fair and reasonable return that is proportionate to their business risk and capital investment, and ensuring that Canadian consumers and independent fuel marketers have access to a competitively priced and readily available supply of fuel products in all regions of the country.

MESSAGE FROM THE PRESIDENT JENNIFER STEWART | PRESIDENT & CEO

Dear CIPMA Members and Associate Members, In these trying times, I hope that you, your family and team members are remaining both safe and healthy.

As an association, we remain committed to working with you and your teams to fight for our sector.

We have been engaged on a number of files to support the industry, including advocating provincially and federally for inclusion on the essential services listing, for the delay in the carbon tax increase and on several regionally-specific files.

We are living in an unprecedented time. Businesses across Canada are feeling the impact of the pandemic and governments are reacting quickly to provide support and some measure of relief.

Federal programs available to help can be found here: Newfoundland and Labrador Prince Edward Island Nova Scotia New Brunswick Quebec

Ontario Manitoba Saskatchewan Alberta

British Columbia Yukon Northwest Territories Nunavut

Stay safe and please reach out if we can help.

Sincerely,

Jennifer Stewart President and CEO Canadian Independent Petroleum Marketers Association

CIPMA - COVID-19 Updates

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UPCOMING EVENTS CIPMA CONNECTION | 2020 EVENTS

CANADIAN FUEL MARKETING CONFERENCE Postponed until fall 2020. Stay tuned for details.

CIPMA 2020 GOLF CHALLENGE September 17, 2020 Glen Abbey Golf Club in Oakville

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CIPMA MEMBER SPOTLIGHT CANADIAN TIRE

Q. In January, Canadian Tire announced that it was rolling out 90+ Fast Charging sites across Canada to help serve the Electric Vehicle (EV) market. What’s the background to this new ‘Green Initiative’?

Automotive is a heritage business at Canadian Tire and we believe we need to evolve with the market and our customers. Canadian Tire has decided to partner with a group of leading EV players including AddEnergie/ FLO; Electrify Canada; Tesla; Efficiency PEI; and Natural Resources Canada to put together our EV Direct Current (DC) Fast Charger installations.

The Canadian EV market is currently small but growing; as the automakers introduce more models, at more attractive price points, with better driving range and longer battery warranties, we believe this will evolve into the fastest growing light vehicle segment.

Also, when the new group of EV light trucks get introduced over the next 2-3 years there could be some significant EV growth. It’s important to note that light trucks, including SUVs, represent almost 3 out 4 new vehicle sales in Canada.

Q. How important are the government incentives to get EV introduced and build the EV charging network infrastructure?

Without question, government subsidies drive EV sales.

Currently the market is very regionally focused with British Columbia, Quebec, and Ontario accounting for 95% of EV sales in Canada. However, once the Ontario EV incentives were dropped, national EV sales dropped 20% (comparing 2019 to 2018).

Interestingly, Quebec has the highest subsidy rates in Canada and yet British Columbia has almost twice the volume of new EV vehicle sales penetration, which we believe is reflective of the environmentally driven consumer habits within that province.

With respect to the affordability of EV charging infrastructure (which is critical to ensuring EV drivers have peace of mind that they can recharge on lengthy road trips), Natural Resources Canada’s Zero Emission

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Vehicle (ZEV) program has certainly helped to incentivize companies to invest in EV. Without this kind of program, many companies would not be in a position to make such an investment given the very high costs and low returns.

Q. What would you advise other Fuel Retailers to consider when shifting to a ‘Greener’ strategy?

Q. What’s Canadian Tire’s position on Climate Change?

All areas of one’s operation need to look for ways to reduce their energy and carbon footprint. Areas like LED lighting; recycling; automated energy control systems; and even offering alternative fuels if the customer is aligned. The market is evolving, and we all need to continue to consider how we can adjust our business plans accordingly.

Canadian Tire is a proud Canadian company, committed to addressing the challenges of climate change throughout our operations, including offering a wide assortment of energy saving products. The network of EV fast chargers that we are creating, with the support of partners I mentioned earlier, is another example of how we are helping customers reduce their environmental footprint.

Bruce Allen President, Petroleum Division Canadian Tire

“The market is evolving, and we all need to continue to consider how we can adjust our business plans accordingly.”

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ADVOCACY CORNER The Advocacy Corner will be featured in the newsletter on a bi-monthly basis. We will continue to monitor and track all policy related issues that matter to you, our members, in the lead up to and post the federal election.

COVID-19 AND OIL-MARKET SLUMP WILL SEE A CHANGE IN THE LIBERAL GOVERNMENT’S TUNE By: Michelle Coates Director, Strategy, Public Affairs and Government Relations, Syntax Strategic We are in uncharted territory. Many generations are experiencing for the very first time what a real global crisis looks like. We still don’t know the true impacts COVID-19 will have on our global population’s health or on our economy.

The socio-economic impacts of the virus, compounded by one of the most dramatic decreases in oil prices we have seen since 1991, has left us with a grim market outlook with government decision makers across the globe reeling as they try desperately to react to a financial storm no one could have predicted.

In Canada, governments across the country are reevaluating their budget forecasts. Premier Kenney’s much hyped 2020 Budget has been left moot, forcing him to abandon a key election promise to balance the books in Alberta.

The federal government, forced to suspend parliament, has gone from clean economy budget branding to economic crisis stimulus packaging. They have cautioned the federal budget – a critically important policy document that signals to the public and corporations alike what the government’s policy priorities are – will be delayed indefinitely.

It is possible the Trudeau government may take a page from Ontario’s handbook and instead provide a fiscal update to help chart our budget course for the foreseeable future.

In either case, with the widespread panic drastically shifting consumer habits, and investor trends creating a sea of red in the markets – it’s a tough time to be a politician in

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this country. Everyone will be looking to someone to blame if things continue to go south.

Nonetheless, steward the Canadian economy our politicians must.

So, the question becomes: which budget priorities will the federal government focus on when an update inevitably becomes warranted.

COVID-19 – Within days of its announcement to provide a $1 billion support package - of which, half a billion dollars will flow to provinces and territories to help manage the COVID-19 crisis impacts to our healthcare systems and supplies - the federal government had no choice but to up the ante, announcing an additional $82 billion emergency response package.

This package is designed to support Canadians and businesses in managing their pocketbooks in an increasingly volatile market. For small businesses in particular, the offer of wage subsidies and tax deferrals came as a welcome relief. Accounting for more than 3 percent of Canada’s GDP, we can expect any future fiscal update to focus heavily on the disbursements of these funds. The pressure will be on to demonstrate funds have flowed quickly to those people and businesses who need it most.

deal with the fallout of Teck Frontier, it is most probable the federal government will show support through shifts to fiscal stabilization - a key ask from Premier Kenney - to help level the playing field. And quite possibly the only solution the Federal government can afford to put on the table given the current context.

Beyond these three policy areas, there is no doubt, certain priorities that were once a staple of the federal Liberal government’s message strategy will remain, but anticipate a shift in the narrative. The Liberals understand the public’s tolerance for ideology driven mandates is at an all-time low right now.

To continue to push a climate change narrative when Canadians can’t even buy toilet paper would be nothing short of tone-deaf.

Michelle Coates is an experienced leader in public affairs, specializing in government and stakeholder relations, communications strategy development and advocacy outreach. As a government relations representative for CIPMA, Michelle represents the views and interests of independent Canadian fuel marketers across the country, providing timely and pertinent advice and analysis on Federal and Provincial regulations impacting the oil and gas industry.

While the focus of any upcoming fiscal update will certainly be on the COVID-19 response, it is possible the federal government will also take the opportunity to speak to two critically important economic drivers: NAFTA – The House of Commons wisely sought to hasten the passage of the new trade deal with Canada, the United States, and Mexico which swiftly received Senate approval. The passage of the trade deal came in the nick of time, as the federal government would shortly find themselves in an unprecedented scenario of temporarily ceasing all recreational- and tourism-related travel to and from the US. The silver lining for the Canadian economy here is that the supply of trades and goods will continue with our largest trading partner – good news for the economy in the long run. We can expect to see some additional details on what the new trade deal includes in the upcoming budget with the Liberal government looking for a proof-point of a win.

Energy Sector – It is safe to assume despite the COVID-19 outbreak, the Conservative Party of Canada will continue to look for ways to hold the federal government accountable for a quickly deteriorating oil and gas sector.

The Liberals know they have a problem on their hands out west and must show commitment to finding meaningful solutions. While there is ongoing chatter around the possibility of some kind of aid package for Alberta to

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NEWS UPDATES Please note that all orange text in the following section is hyperlinked. If viewing electronically, you can click to read full articles.

GLOBAL GILBARCO VEEDER-ROOT INVESTS IN DRIIVZ TO EXPAND EV CHARGING SOLUTIONS Gilbarco Veeder-Root has signed an investment agreement with Driivz, a global leader in smart electric vehicle charging management solutions.

CORONAVIRUS COULD WEAKEN CLIMATE CHANGE ACTION AND HIT CLEAN ENERGY INVESTMENT, RESEARCHERS WARN The International Energy Agency has warned the virus outbreak will likely undermine clean energy investment and is urging governments to offer economic stimulus packages that invest in clean energy technologies.

OIL PRICE NOSEDIVES AFTER OPEC, RUSSIA FAIL TO AGREE ON MASSIVE OUTPUT CUT Talks between OPEC and non-member allies like Russia ended March 6, without a deal on cutting oil production to limit a drop in the price of oil as the virus outbreak slashes demand.

WIND AND SOLAR PLANTS WILL SOON BE CHEAPER THAN COAL IN ALL BIG MARKETS AROUND WORLD, ANALYSIS FINDS BUILDING NEW WIND Building new wind and solar plants will soon be cheaper in every major market across the globe than running existing coal-fired power stations, according to a new report that raises fresh doubt about the medium-term viability of Australia’s $26bn thermal coal export industry.

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UNITED STATES PETROTEQ PROGRESSES OIL SANDS EXTRACTION TECH AS PARTNER VALKOR GETS CLOSER TO BUILDING PLANTS IN UTAH Petroteq Energy Inc., an integrated oil company focused on the development and implementation of its proprietary oil-extraction and remediation technologies, has announced progress on the licensing of its proprietary oil-sands extraction technology.

PARKLAND ACQUIRES 7 CONOMART SUPER STORES LOCATIONS Parkland Fuel Corporation announced that through its wholly owned U.S. subsidiaries Parkland USA, it has entered into an asset agreement to acquire seven retail sites located in and around Billings, Montana.

NATIONAL NORTH AMERICAN ENERGY COMPANIES SLASH US$20-BILLION IN PLANNED CAPITAL SPENDING, MORE CUTS COMING The oil and gas sector is reeling from a massive drop in revenues owing to the contagion and an oil-price war being waged by Saudi Arabia and Russia. A report released on March 23 by TD Securities Inc. pegged spending cuts by energy companies in North America at US$20-billion as they struggle to stay afloat, and more reductions are on the way. Of the total, Canadian companies have slashed spending by more than US$3-billion.

OIL AND GAS COMPANIES TAKING STEPS TO KEEP EMPLOYEES SAFE FROM COVID-19 In an attempt to help flatten the curve and keep employees healthy, a number of oil and gas companies operating in Alberta said they are making changes in the name of social distancing.

OIL ROUT TESTS CANADIAN ENERGY PRODUCERS’ COST-CUTTING DRIVE Canadian producers, particularly those focused in the higher-cost oil sands, have spent years trying to make their operations more efficient. They’ve also curtailed capital spending and worked to repair their balance sheets. Now those efforts will be put to the test.

TECK’S FRONTIER OIL SANDS PROJECT FACED PUSH BACK FROM LIBERAL CABINET MINISTERS Several Liberal ministers worked behind the scenes earlier this year against Teck Resources Ltd.’s proposed oil sands mine in Alberta, according to Liberal and government sources.

DOZENS OF ALBERTA OILSANDS PROJECTS WON’T BE BUILT IN THE NEAR FUTURE, ANALYSTS SAY There are dozens of approved oilsands projects that could be built in the wake of the shelving of the Frontier oilsands mine this week but analysts say they won’t be built until more export pipeline capacity comes online.

MEG ENERGY SHELVES OIL SANDS PROJECT AS ECONOMIC CONDITIONS PUT PROPOSED PROJECTS IN DOUBT MEG Energy Corp. has asked the Alberta Energy Regulator for a three-year delay in the approval process for a proposed oil sands project, because of what it called the province’s continuing difficulties.

WESTERN REGION ALBERTA OFFERS STIMULUS MEASURES FOR OIL AND GAS SECTOR HAMMERED BY CORONAVIRUS PANDEMIC THE ALBERTA GOVERNMENT The Alberta government announced tax relief and other measures for struggling oil and gas producers in what Premier Jason Kenney described as a first step to help an industry that has been hammered by historic low prices and the COVID-19 pandemic.

ALBERTA'S ECONOMIC DECLINE WILL BE THE 'MOST SEVERE' THE PROVINCE HAS EVER SEEN: RBC Alberta is poised to suffer the largest economic decline in Canada this year — and the most severe that the province has ever seen in a single year, according to a new forecast from RBC Economics.

PROVINCE NOT INTERVENING IN REGINA REFINERY LABOUR DISPUTE The provincial government says it will not intervene in the bitter, 112-day labour dispute between the Co-op Refinery Complex in Regina and Unifor 594.

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COVID-19: SHELL DELAYS TURNAROUND AT SCOTFORD SITE AS PANDEMIC IMPACTS ALBERTA OIL AND GAS SECTOR

WARREN BUFFETT PULLS $3B CANADA GAS LINE STAKE

Shell is delaying crucial maintenance at its Scotford site as the COVID-19 pandemic continues to impact Alberta’s oil and gas industry. Activity on the site’s upgrader is being pushed back to later this year in an effort to minimize the spread of the disease, the company said Wednesday on Twitter.

Canada’s ambition to become a global energy powerhouse has taken a recent blow, with major investor Warren Buffett opting to withdraw last month from an expected $2.9-billion investment in the $10-billion Énergie Saguenay natural gas pipeline in northern Quebec because of growing national protests over pipeline environmental impacts and effects of routes on indigenous tribes.

PARKLAND EXTENDS TRIPLE O’S RESTAURANT OFFER IN C-STORES

SAULT COMPANY FETED WITH NATIONAL AWARD

Parkland Fuel Corporation announced a multi-year agreement to strengthen its range of meal options by expanding its long-standing relationship with Triple O’s restaurants. This agreement builds on Parkland’s existing network of convenience stores featuring Triple O’s in British Columbia.

HUSKY ENERGY SLASHES SPENDING BY $1 BILLION Husky Energy says it's reducing this year's capital program by $900 million, representing a one-third cut in upstream spending. The announcement also includes an additional $100 million in "cost-saving measures" due to current market conditions.

McDougall Energy continues to excel, recognized as one of Canada’s Best Managed Companies for a ninth consecutive year.

ATLANTIC REGION START IT UP: THREE COMPANIES SHAPING ATLANTIC CANADA'S GREEN TECH STARTUP SCENE Arolytics has developed a cloud-based software that organizes and analyzes atmospheric emissions data from the energy sector. The startup aims to help oil and gas companies measure, track and understand their greenhouse gas emissions.

ONTARIO / QUÉBEC REGION QUEBEC GOVERNMENT TRIES TO GO GREEN IN NEW BUDGET, PUSHING PUBLIC TRANSIT AND ELECTRIC CARS Flush with cash, the Quebec government will pour more money into health care and education this year, while trying to convince Quebecers it is serious about reducing greenhouse gases.

PETERBOROUGH TRANSIT TO RECEIVE MORE THAN $1.89M IN ONTARIO GAS TAX FUNDING The City of Peterborough will receive more than $1.89 million from Ontario’s Gas Tax program to invest in transit. Minister of Transportation, Caroline Mulroney, announced Ontario is investing $365.3 million to expand and improve transportation for 111 municipalities across the province. The gas tax funds can be used to upgrade infrastructure, increase accessibility, purchase transit vehicles, add routes and extend hours of service.

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MEMBER UPDATES CIPMA is pleased to welcome Waleco as a new Associate Member

ASSOCIATE MEMBER

WALECO Established in 2002, Waleco has grown to become a leader in the Petroleum Equipment Distribution market with locations in Ontario & Quebec. Our vast experience and knowledge, large inventory, coupled with our "make it happen" attitude are paramount to providing our clients with industry pacesetting levels of customer service.

Our clients rely on us to provide first rate solutions to their petroleum equipment requirements for retail fueling sites, commercial fueling sites, bulk plants and fueling systems for back-up generators.

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We want to share the successes of our members.

If you want to feature your company’s recent achievements, updates, or simply want to be featured, please reach out to Jennifer Stewart at jstewart@cipma.org

Jennifer Stewart, President and CEO jstewart@cipma.org | Cell: 613.915.5699

Rita Molinari, CMP, Operations Manager rmolinari@cipma.org | Cell: 416.358.5207

MAILING ADDRESS | 3-1750 The Queensway, Suite 115 - Toronto, ON., M9C 5H5

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