CIPMA Connection

March | 2019

MESSAGE FROM THE PRESIDENT JENNIFER STEWART

CONSUMERS REVEAL GAS-BUYING BEHAVIORS NATIONAL ASSOCIATION OF CONVENIENCE STORES

VEHICLE OPERATING COSTS INCREASED 6.2% IN 2018 DESROSIERS AUTOMOTIVE CONSULTANTS INC.

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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| CONSUMERS REVEAL GAS-BUYING BEHAVIORS National Association of Convenience Stores

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| VEHICLE OPERATING COSTS INCREASED 6.2% IN 2018 DesRosiers Automotive Consultants Inc.

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| UPCOMING EVENTS

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| ADVOCACY UPDATES

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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 2019 is shaping up to be a big regulatory year for the petroleum industry in Canada. With the federal fuel charge now in effect (as of April 1) in Ontario, New Brunswick, Manitoba and Saskatchewan and the proposed regulations for the Clean Fuel Standard anticipated this spring, CIPMA continues to be actively engaged in advocating on behalf of the sector, making sure that the voices of our members are heard.

On a lighter note, the countdown for the Canadian Fuel Marketing Conference is officially on! I am eager to see you all and take in the insights from the sessions that we have lined up this year. The CIPMA team has been working hard to bring together some of the best minds in and outside of the petroleum marketing industry to create an inspiring and engaging experience that will leave you on top of the latest developments effecting the industry and primed with the knowledge, resources and connections to excel in the year ahead.

I look forward to seeing many of you at the event next week. As always, if you have any questions in the meantime, please feel free to reach out to me anytime.

Sincerely,

Jennifer Stewart President and CEO Canadian Independent Petroleum Marketers Association

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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Canadian Fuel Marketing Conference Join us April 8 to 10, 2019 at the Marriott Downtown Toronto for our annual Conference presented by CIPMA.

The Canadian Fuel Marketing Conference is the No.1 networking and educational event for the fuel marketing industry in Canada.

This year’s event will include compelling panel discussions with industry and cross-sector thought-leaders on the Future of Retail Fuel and An Outlook on Canada’s Transportation Sector.

Register Now!

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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CONSUMERS REVEAL GAS-BUYING BEHAVIORS S O U R C E : N AT I O N A L A S S O C I AT I O N OF CONVENIENCE STORES

ALEXANDRIA, Va. – NACS has released new research on how convenience store customers buy gas, their driving habits and opportunities for retailers to change consumer behavior.

Key insights from the NACS report, “Consumer Behavior at the Pump,” reveal: Consumers who are driving more are doing so because of a job or a longer commute. Price dominates where consumers choose to purchase fuel: 59% of those surveyed in 2019 cite lower prices as the reason they prefer a specific store or chain. Food quality and employees influence where consumers choose to shop. 44% of gas customers also come inside the store. “Understanding how gas prices affect consumer behavior and their overall driving habits can help convenience retailers implement strategies for bringing more customers from the pump and inside the store,” said NACS Vice President of Strategic Industry Initiatives Jeff Lenard.

“Our latest research, based on consumer surveys, reveals interesting variations among younger and older consumers across different regions, which can ultimately help retailers go beyond the gas price sign and translate fuel purchases into in-store sales.”

Read the full report by downloading “Consumer Behavior at the Pump.”

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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VEHICLE OPERATING COSTS INCREASED 6.2% IN 2018 SOURCE: DESROSIERS AUTOMOTIVE C O N S U LT A N T S I N C .

Consumer Price Index for Operation of Passenger Vehicles - % Change YE 2018 vs. YE 2017 Gasoline Operation of passenger vehicles Drivers’ licences Passenger vehicle maintenance and repair services Passenger vehicle insurance premiums Parking fees Passenger vehicle parts, accessories and supplies All other passenger vehicle operating expenses Passenger vehicle registration fees -5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

( % CHAN G E )

Source: DesRosiers Automotive Consultants Inc. and Statistics Canada

Operating a passenger vehicle was more expensive in 2018 with the consumer price index rising 6.2% from 2017. As usual, much of the cost of operating a vehicle is dependent on gas prices and the average cost of regular gasoline increased from 114.5 in 2017 to 128.9 for 2018. This resulted in a 12.5% increase in the CPI for gasoline which followed an 11.8% increase in 2017 after a period of decreases in 2015 and 2016. Interestingly for the aftermarket repair/maintenance and parts/ accessories costs increased 2.6% and 1.8% respectively in 2018 continuing the trend of greater inflation in the labour side of the business. Increases were present for all CPI categories falling under passenger vehicle operating costs with no decreases to mitigate the growth.

More information on these numbers can be found in the DesRosiers Automotive Reports published by DesRosiers Automotive Consultants Inc.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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UPCOMING EVENTS CIPMA CONNECTION | 2019 EVENTS

2019 CANADIAN FUEL MARKETING CONFERENCE April 8 to 10, 2019 | Toronto, ON Register Today!

CIPMA GOLF CHALLENGE September 12, 2019 Save the Date!

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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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.

2019 | 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 CANADIAN NAMES AMONG OIL AND GAS SHARES TO BE DUMPED BY NORWAY’S US$1 TRILLION FUND Norway’s US$1-trillion wealth fund, the biggest of its kind in the world, will begin dumping shares in oil and gas companies including some Canadian names, but stopped short of barring major producers like Suncor, ExxonMobil and Chevron.

U.S. AND CANADIAN OIL PRODUCTION PUSHING PLANET’S CLIMATE GOALS OUT OF REACH, SAYS IEA A surge in U.S. and Canadian oil production over the last decade has added the equivalent of “one Russia or one Saudi Arabia” to the markets — pushing the planet farther away from ever getting a grip on the pollution that is driving climate change.

OPEC ‘APOLITICAL’ ON VENEZUELA, SLAMS U.S. ANTITRUST LEGISLATION MOVES Political upheaval in Venezuela – a founding member of the Organization of Petroleum Exporting Countries (OPEC) – does not pose any operational impediments for the crude producers’ group, according to its Secretary General Mohammed Sanusi Barkindo.

UPDATE 1-KENYA’S PRESIDENT SIGNS PETROLEUM LAW OUTLINING REVENUE SHARING Kenya’s president signed on Tuesday a long-awaited petroleum bill into law to regulate oil exploration and production and outlining how revenues will be shared between the government, local communities and companies.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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UNITED STATES GAS STATION EQUIPMENT MARKET SIZE IS EXHIBIT TO CROSS USD 7640 MILLION BY 2025 The latest research report on ‘Gas Station Equipment market’ by Market Study Report, LLC, presents a detailed analysis concerning market share, market valuations, revenue estimation, SWOT analysis, and regional spectrum of the business.

IN FIVE YEARS, U.S. OIL EXPORTS WILL OVERTAKE RUSSIA AND CLOSE IN ON SAUDI ARABIA, IEA PREDICTS The United States will drive global oil supply growth over the next five years, adding another 4 million barrels per day to the country’s already booming output, the International Energy Agency said on March 11.

POMPEO CALLS ON OIL INDUSTRY TO SUPPORT U.S. FOREIGN POLICY AGENDA U.S. Secretary of State Mike Pompeo urged the oil industry on Tuesday to work with the Trump administration to promote U.S. foreign policy interests, especially in Asia and in Europe, and to punish what he called “bad actors” on the world stage.

U.S. ETHANOL MARKET SEES FIRST SALES DECLINE IN DECADE Lower U.S. demand, plunge in exports made for rough 2018.

EPA PROPOSES YEAR-ROUND SALES OF E15 GASOLINE, RIN PROGRAM CHANGES The US Environmental Protection Agency formally proposed allowing year-round sales of gasoline with 15% ethanol on Mar. 12, a move which corn ethanol suppliers cheered and oil refiners condemned. It also proposed modifying parts of its Renewable Identification Number (RIN) program which it said would make the biofuel credits more transparent and deter price manipulation.

NATIONAL CANADIAN RETAIL GASOLINE PRICES AVERAGE 128 CENTS PER LITRE IN MARCH As of March 28, the Canadian average retail regular gasoline price was 128 cents per litre, down from 128.9 cents per litre in March 2018, while the average retail diesel price hit 123.6 cents per litre, versus 125.2 for the same time last year, according to Kent Group Ltd. For more information and analytics, click here.

ON THE WORLD STAGE, CANADIAN OIL MAJORS PROMOTE A CARBON TAX Executives from a pair of Canadian oilsands companies extolled the virtues of a carbon tax on one of the largest stages for the global energy sector.

CANADA ‘FALLING BEHIND’ BECAUSE OF ARCTIC OIL DRILLING MORATORIUM: CAPP An oil and gas industry representative says Canada is “falling behind” the U.S. and other nations in developing its rich Arctic natural resources because of a five-year moratorium on offshore drilling in the North put in place in 2016.

HYUNDAI CANADA LAUNCHES NEXO, BECOMES FIRST MANUFACTURER TO MAKE FUEL CELL TECHNOLOGY ACCESSIBLE TO CANADIAN DRIVERS Hyundai Auto Canada Corp. announced on March 18 the national launch of the first-ever NEXO, Canada’s only fuel cell-powered SUV and the first vehicle of its kind to be made easily accessible to consumers. By collaborating with Modo, the first Vancouver-based carsharing co-operative of its kind, the NEXO will bring fuel cell technology to a much wider audience than ever before.

COUNTDOWN TO FEDERAL CARBON TAX: SMALL BUSINESSES STILL HAVE MANY UNANSWERED QUESTIONS CFIB urges government to cancel the tax and work with provinces on customized approaches to climate change.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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WESTERN REGION CANADIANS WANT TO SEE ELECTRIC VEHICLES BECOME MAINSTREAM OVER GASOLINE, POLL FINDS A new poll has found 64 per cent of Canadians polled said they’d prefer to see electric vehicles overtake gasoline-powered vehicles in the future.

ALBERTA’S HAD A CARBON TAX ON BIG EMITTERS FOR A DECADE FOCUSED ON FUNDING RESEARCH A decade before individual Albertans started paying a carbon tax, the province began billing large industrial polluters for carbon emissions. $15-MILLION PROJECT TO TEST HYDROGEN FUEL IN ALBERTA’S FREIGHT TRANSPORTATION SECTOR

FUEL AT CARD LOCKS MAY FACE TAX The federal carbon tax comes into effect April 1 but farmers are concerned that farm fuel purchased at card locks may not be exempt by then.

ALBERTA GAS-AND-DASHES PLUMMET AFTER PAY-BEFORE-YOU-PUMP LAW, BUT NOT ERADICATED Numbers obtained by Global News reveal that the number of gas-and-dash incidents in Alberta have plummeted in the months since it became law to pay before you pump gas, however there are still incidents occurring in the province.

PETROLEUM ASSOCIATION CALLS FOR LESS REGULATION, NEW PIPELINES The Canadian Association of Petroleum Producers (CAPP) made a number of recommendations on February 27, ahead of this year’s provincial election, aimed at doubling investment in the provincial energy sector.

ALBERTA’S OPEC-STYLE OIL CUT PUTS A STOP TO EASY MONEY FOR AMERICAN REFINERIES Ever since Alberta mandated companies in the province to limit their oil production, the heavy discounts on Canadian oil have disappeared. So too have the massive profits for refineries south of the border, which have shrunk to some of the lowest levels in several years.

ALBERTA’S PATH TO A CARBON TAX: A TIMELINE This timeline of events shows how Alberta adopted a carbon tax and how the policies in the Climate Leadership Plan were developed and rolled out.

An industry-led, $15-million project will test the ability of hydrogen to fuel the province’s heavy-duty freight transportation sector, a first step in exploring a potential made-in-Alberta hydrogen economy.

ONTARIO / QUÉBEC REGION

TURNS OUT IT’S SAFE TO USE A CELLPHONE AT THE GAS STATION — AND THAT COULD CHANGE THE WAY YOU PAY For years, drivers were told using a cellphone at the gas station could cause a fire by igniting vapours at the pumps, but now Ontario’s Technical Standards and Safety Authority is saying otherwise.

MCKENNA CHIDES FORD GOVERNMENT FOR CARBON TAX DOUBLE SPEAK Ottawa is calling out the Ford government for inconsistencies in its position on carbon pricing, pointing out that while it rails against a federal carbon tax it’s planning to impose a provincial version.

ONTARIO INDUSTRIES CAUGHT IN THE MIDDLE AS PROVINCIAL, FEDERAL GOVERNMENTS SPAR OVER CARBON PRICING Ontario’s largest industries are finding themselves caught in a political tug of war between the federal government and the province over which jurisdiction will regulate greenhouse-gas emissions and how onerous the carbon tax will be on the companies’ greenhouse-gas emissions.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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ATLANTIC REGION

NEW BRUNSWICK LOOKS TO HYDROGEN FROM SEAWATER AS FUEL FOR FUTURE POWER New Brunswick’s Crown-owned power utility is partnering with a Florida-based company to develop power plants that would use hydrogen extracted from seawater as their fuel.

UPDATE: NEWFOUNDLAND AND LABRADOR OIL AND GAS COMPANY STILL NEEDS NAME With the last provincial budget, the Government of Newfoundland and Labrador announced it would be creating a new oil and gas corporation, separate from Nalcor Energy. The oil company will be essentially responsible for the promotion and support of the province’s future in oil and gas, including encouraging new research and development. It has yet to be named.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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State of the

Vincent van Gogh - Starry Night, 1889 / Wayne Ovation™2 fuel dispenser

Learn more at www.wayne.com Austin, Texas, USA l Malmö, Sweden l Rio de Janerio, Brazil l Shanghai, China © 2019 Dover Fueling Solutions. All rights reserved. DOVER, the DOVER D Design, DOVER FUELING SOLUTIONS, and other trademarks referenced herein are trademarks of Delaware Capital Formation.

Inc./Dover Corporation, Dover Fueling Solutions UK Ltd. and their affiliated entities. 032819v5

Canadian Independent Petroleum Marketers Association | Connection 2019 |

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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