CIPMA Connection

November | 2018

MESSAGE FROM THE PRESIDENT JENNIFER STEWART

CANADIANS ARE ASPIRATIONAL CONSUMERS

BY NIK NANOS, CHIEF DATA SCIENTIST | NANOS RESEARCH

UPCOMING EVENTS 2019 CANADIAN FUEL MARKETING CONFERENCE

NEWS UPDATES

FULL MEMBERS

ASSOCIATE MEMBERS

CONNECTION CONTENTS

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| MESSAGE FROM THE PRESIDENT

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| CANADIANS ARE ASPIRATIONAL CONSUMERS

By Nik Nanos, Chief Data Scientist | Nanos Research

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| UPCOMING EVENTS

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| ADVOCACY UPDATES

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| NEWS UPDATES

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MEMBER UPDATES

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OTHER 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 As we gear up for the holiday season, the CIPMA team remains committed to representing our Members’ voices to all levels of government and stakeholders. We have been busy actively engaging with the Federal Clean Fuel Standard team and forging and strengthening relations with various provincial governments.

Our team is also busy preparing for the 2019 Canadian Fuel Marketing Conference, being held from April 8th to 10th in Toronto. We will be opening up registration next month and announcing our keynote speakers and line-up. I encourage you to register early, as the event continues to grow in attendance and prestige.

We will also be announcing the results of our member survey, which is showing the significant growth of the association and its representation of the Canadian fuel marketing sector.

As always, feel free to reach out to me any time with any concerns or questions you may have. Our team remains committed to representing your voice, particularly as legislative and regulatory priorities continue to focus on our sector.

Sincerely,

Jennifer Stewart President and CEO Canadian Independent Petroleum Marketers Association

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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MARK YOUR CALENDARS CIPMA is the proud host of the

Canadian Fuel Marketing Conference The next conference will take place in Toronto

April 8 – 10, 2019 at the Marriott Downtown-Eaton Centre

BE PREPARED FOR A PRIVATE FUEL OUTLET (PFO) INSPECTION

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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CANADIANS ARE ASPIRATIONAL CONSUMERS THEY HAVE POSITIVE VIEWS OF HYBRID ELECTRIC CARS BUT ARE SKEPTICAL OF BOTH CARBON TAXES AND CAP-AND-TRADE SOLUTIONS TO REDUCE GHG EMISSIONS

BY NIK NANOS C H I E F D ATA S C I E N T I S T | N A N O S R E S E A R C H

A national survey conducted for the Canadians Independent Petroleum Marketers Association by Nanos Research explored a wide range of topics including impressions of hybrid gas vehicles, the oil and gas sector and consumer issues like credit card fees.

What’s clear is that Canadian are aspirational consumers. On the one hand they have environmental aspirations, and on the other hand they are both pragmatic in their choices and skeptical about promises to reduce GhG emissions.

For example, in a head to head comparison, Canadians are more likely to have more favourable impressions of a hybrid electric gas vehicle over a vehicle that is electric only. More than eight of ten Canadians have a positive (45%) or a somewhat positive (38%) impression of hybrid gas vehicles compared to seven in ten Canadians that had a positive (41%) or a somewhat positive (30%) impression of electric only vehicles. Also of note, Canadians were more likely to report some likelihood to own or lease a hybrid electric gas vehicle (18% likely, 29% somewhat likely) than an electric only vehicle (18% likely, 18% somewhat likely). The key factors in interest in hybrid cars include the view that they are better for the environment and the better expected fuel economy. Top obstacles include negative perceptions related to cost, not looking to buy a car, uncertainty about the reliability of hybrid cars and the general preference for gas powered cars.

On the environmental side of the ledger, Canadians generally support or somewhat support the government providing tax credits to citizens to encourage them to purchase electric vehicles and are also in support of the government setting higher clean fuel standards so that car emissions go down.

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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Support for the higher clean fuel standards remains if it meant a higher price for gasoline.

Asked about ideas to reduce greenhouse gas emissions, 30% thought a cap and trade approach was best while 16% thought a new tax on carbon fuel (coal, gas, and natural gas) was the best path forward. Of note, the view that neither approach was likely to reduce GhG emissions was more popular than each of the initiatives (44% said neither).

This suggests that for either a carbon tax or a cap and trade solution, Canadians are not persuaded either will accomplish the GhG reduction objective.

When it comes to perceptions of Canada’s oil and gas sector, the Nanos survey indicates that Canadians are divided. About just as many Canadians have a positive (21%) or somewhat positive (26%) impression compared to holding a negative (21%) or somewhat negative (27%) impression of the oil and gas sector. Very noticeable geographic divisions exist when it comes to the sector. The most positive impressions of the sector are in the energy rich Prairie provinces (65% positive and somewhat positive) while the lowest positive impressions were in Quebec (32% positive and somewhat positive). Positive unprompted impressions were driven by the view that the oil and gas sector was good for the economy and jobs and that the industry tries to limit environment impacts, while negative views were driven by the perception that the sector was detrimental to the environment and were untrustworthy/ profit driven.

Canadians are more likely to go for a hybrid electric gas vehicle over a vehicle that is electric only

A large number of Canadians (44%) said that neither a cap and trade approach nor a new tax on carbon fuel was likely to reduce GHG emissions

On the consumer front, the vast majority of Canadians (88%) reported they are aware that merchants pay up to four percent of a transaction’s value in fees to large financial institutions and a comfortable majority support (49%) or somewhat support (25%) government regulation of credit card fees. Although overall support remains significant, the level of intensity has diminished in the past two years.

The Nanos study for CIPMA advances a complex view of Canadians.

Yes, they are interested in vehicles that are believed to be better for the environment, but they are concerned about the cost. Focused on cost, a majority like the concept of tax credits to purchase electric vehicles and higher clean fuel standards. Canadians are cross pressured when it comes to views of the oil and gas sector. On the one hand they believe the sector is not doing enough for the environment, and on the other hand they assert that the sector is good for the economy and jobs.

Although some might want to cast issues as black and white, Canadians are weary of promises to reduce GhGs and understand that things are more nuanced.

Canadians are divided on how they feel about the Canadian oil and gas sector

A comfortable majority of Canadians support (49%) or somewhat support (25%) government regulation of credit card fees

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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UPCOMING EVENTS CIPMA CONNECTION | 2019 EVENTS

2019 CANADIAN FUEL MARKETING CONFERENCE April 8 - 10, 2019 | Toronto, ON Mark your calendars!

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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ADVOCACY UPDATES Government advocacy is the main priority for the CIPMA team, and having a voice on important issues at the municipal, provincial and federal levels of government is one of the key reasons why Members join our organization. CIPMA Members receive quarterly updates on the association’s advocacy efforts, which are also posted on the Members Only section of cipma.org.

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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NEWS UPDATES This section presents a series of media articles of interest to the sector. The headlines included below are taken directly from media sources and are not written by CIPMA or CIPMA team members.

GLOBAL OIL PRICES HIT A 2018 LOW AS OPEC CONSIDERS AN OUTPUT CUT Oil prices fell to their lowest in a year on November 23, on course for their biggest one-month decline since late 2014, even as oil producers consider cutting production to try to stem a rising global surplus.

ADNOC CEO SAYS OIL AND GAS INDUSTRY A CRITICAL ENABLER OF ECONOMIC GROWTH The global oil and gas will be a critical enabler of economic growth in the 4th Industrial Age, according to His Excellency Dr. Sultan Ahmed Al Jaber, UAE minister of state and group CEO of the Abu Dhabi National Oil Company (ADNOC).

NIKOLA UNVEILS LONG-RANGE HYDROGEN FUEL CELL LORRY ‘DESIGNED FOR EUROPE’ Utah-based Nikola Motor Company has unveiled a hydrogen fuel cell lorry designed specifically for Europe, a move described by company founder Trevor Milton as “long overdue”.

EEA REPORT CONFIRMS: ELECTRIC CARS ARE BETTER FOR CLIMATE AND AIR QUALITY Battery electric cars emit less greenhouse gases and air pollutants over their entire life cycle than petrol and diesel cars, according to a European Environment Agency (EEA) report, published November 22.

Promoting renewable energy and circular economy — including the shared use of vehicles and product design that supports reuse and recycling — will help maximise the benefits of shifting to electric vehicles.

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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UNITED STATES

CANADA’S CARBON TAX: A GUIDE TO WHO’S AFFECTED, WHO PAYS WHAT AND WHO OPPOSES IT

The race to export U.S. shale oil overseas is about to get fierce, with at least nine proposed terminals angling for a piece of a very limited pie.

The ideological divide over carbon pricing has pitted parties and provinces against each other in the courts, in legislatures and in the buildup to 2019’s federal election. It’s more important than ever for Canadians to understand the facts about what is being taxed and why. Here’s a primer to get you started.

NASA WEIGHS IN ON PETROLEUM DEVELOPMENT IN ARCTIC OCEAN

HUSTLE IN THE OIL PATCH: INSIDE A LOOMING FINANCIAL AND ENVIRONMENTAL CRISIS

The federal agency that oversees offshore petroleum leasing has received comment on Arctic Ocean drilling from a surprise source -- NASA.

Just a few years after the boom, energy companies are shedding distressed wells for next to nothing. It’s a brisk trade in junk assets – and it’s going virtually unchecked by regulators. Who will pay to clean it up?

SHALE BOOM RAISES SPECTER OF NEW GLUT: GULF COAST OIL TERMINALS

U.S. COULD BECOME NET EXPORTER OF PETROLEUM BY 2022 The United States could become a net exporter of petroleum in less than five years, the first time the country would achieve such a feat since at least 1949, according to a new report.

CALIFORNIA ENERGY COMMISSION GREENLIGHTS $8 MILLION GRANT FOR HYDROGEN FUEL CELL STATION The California Energy Commission has voted to approve an $8 million grant for the development of a high-capacity hydrogen fueling station.

NATIONAL

CANADIAN RETAIL GASOLINE PRICES AVERAGE 110.8 CENTS PER LITRE IN NOVEMBER As of November 26, the Canadian average retail regular gasoline price was 110.8 cents per litre, down from 120.8 cents per litre in November 2017, while the average retail diesel price hit 130.2 cents per litre, versus 121.8 for the same time last year, according to Kent Group Ltd. For more information and analytics, click here.

FILLD ANNOUNCES $15 MILLION IN SERIES B FUNDING, CO-LED BY PARKLAND FUEL CORPORATION AND CALIBRATE VENTURES Filld, the last mile mobile fueling company, announced today that it raised $15 million in Series B funding co-led by Parkland Fuel Corporation (“Parkland”) and Calibrate Ventures with participation from previous investors, including Cendana Capital, Lucas Venture Group, Javelin Venture Partners and Hallador Investment Advisors.

EXPORT DEVELOPMENT CANADA SPENDS 12 TIMES MORE FOR FOSSIL FUELS THAN CLEAN TECH, REPORT SAYS New research shows Export Development Canada provides 12 times as much financial backing to oil and gas companies as it did to clean technology companies over the last five years.

RAIL IS NOT THE SHORT-TERM ANSWER TO MOVING OIL, OTTAWA INSISTS Prime Minister Justin Trudeau’s government isn’t likely to agree to Alberta’s proposal to buy new trains as a shortterm fix to the country’s oil glut and price crisis, federal officials say.

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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WORST DAY FOR OIL SINCE 2015 AS WTI PRICE FALLS TO $50 US A BARREL The price of a barrel of the most common blend of U.S. oil fell to its lowest level in more than a year, as fears of a global supply glut came roaring back to life.

ONTARIO / QUÉBEC REGION ONTARIO CLIMATE CHANGE PLAN INCLUDES FUND TO HELP BIG POLLUTERS REDUCE EMISSIONS

CANADIAN GAS PRICES FALL AS CRUDE OIL CONTINUES SLIDE

The Ontario government unveiled its plan to combat climate change Thursday, including a fund that commits public money to entice companies to reduce emissions.

Canadian drivers are seeing the lowest prices for gasoline in months, as a slump in the price of crude oil has hit gas stations.

MCNAUGHTON WANTS FED CARBON TAX SHOWN ON BILLS

WESTERN REGION

ALBERTA BUSINESS FORUM APPLAUDS LINKING CARBON TAX IMPLEMENTATION AND PIPELINES A business crowd of about 400 leapt to their feet in a standing ovation November 23 at the suggestion that it should be illegal for Canadian governments to collect carbon taxes until there are new export pipelines delivering Alberta crude oil to world markets.

WORRY AND FRUSTRATION MOUNT IN ALBERTA AS OIL PRICES LANGUISH Workers fear oilpatch troubles not being met with enough urgency.

CDN. PETROLEUM INDUSTRY FACING OBSTACLES AT HOME As the petroleum industry continues to face challenges on multiple fronts, the organization that represents hundreds of upstream oil and gas companies in Canada is continuing to be the voice for its members as the challenges get more complex.

THE DRILLDOWN: ALL NEW CARS SOLD IN B.C. TO RUN ON CLEAN ENERGY BY 2040 British Columbia Premier John Horgan has pledged that, by 2040, all new cars sold in the province will run on clean energy.

With a federal carbon tax on the horizon, Infrastructure Minister and Lambton–Kent–Middlesex MPP Monte McNaughton is championing legislation to ensure the cost to consumers shows up as a separate line item on gas bills and some receipts in Ontario.

GUESS WHERE QUEBEC GETS ITS OIL The supply of oil going to Quebec refineries has undergone a dramatic transformation in less than six years.

SOUTHWESTERN ONTARIO ‘THE WILD WEST’ IN TERMS OF GAS PRICE FLUCTUATION, SAYS ANALYST Gas prices in Windsor tend to increase on Fridays and fall immediately during the weekend, according to senior petroleum analyst Dan McTeague of Gasbuddy.com.

ATLANTIC REGION AFTER MASSIVE OIL SPILL, SPOTLIGHT SHIFTS TO AGENCY REGULATING N.L. OFFSHORE INDUSTRY Newfoundland and Labrador’s largest-ever offshore oil spill has raised a storm of questions about who has the power to turn oil production on and off in risky situations.

DESPITE DAMAGED LIFEBOATS, HIBERNIA PLATFORM WITHSTOOD STORM WELL, SAYS OPERATOR Platform kept producing throughout worst storm in over 30 years, operator says safety plan ‘worked’.

AFTER UNSUCCESSFUL DRILLING, NO WELLS ARE BEING EXPLORED OFF NOVA SCOTIA Hess Corporation recently said it drilled down 7,400 metres at a site, but venture wouldn’t be profitable.

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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MEMBER UPDATES CIPMA is pleased to welcome new Full Member, BVD Petroleum.

FULL MEMBER

BVD PETROLEUM BVD Petroleum is a family business built with a single goal; to provide the best quality diesel at the cheapest rate possible. With over 20 years of experience in the oil industry, they are able to use their connections to give the trucking community the best possible price for diesel.

OTHER UPDATES KEEP CANADA WORKING In partnership with the federal government, the Province of Alberta has launched a multi-channel public awareness campaign, highlighting the important benefits of the Trans Mountain Pipeline expansion including job creation, economic productivity, and investment in green initiatives, all of which are essential elements of the growth and prosperity of our nation.

For more information on the campaign, and how you can get involved, visit: KeepCanadaWorking.ca

Canadian Independent Petroleum Marketers Association | Connection 2018 |

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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