CIPMA Connection

October | 2019

MESSAGE FROM THE PRESIDENT JENNIFER STEWART

UPCOMING EVENTS CANADIAN FUEL MARKETING CONFERENCE

ADVOCACY CORNER CIPMA MEMBER SPOTLIGHT WILSON FUEL CO. LIMITED

NEWS UPDATES

FULL MEMBERS

ASSOCIATE MEMBERS

CONNECTION CONTENTS

1

| MESSAGE FROM THE PRESIDENT

2

| UPCOMING EVENTS

3

| ADVOCACY CORNER

5

| CIPMA MEMBER SPOTLIGHT | WILSON FUEL CO. LIMITED

7

| 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 Thanks to all the eastern members who joined us for another successful AGM in Halifax earlier in the month. It was wonderful to see such a great turnout and encouraging to hear from the Chamber of Commerce CEO on the economic growth witnessed in Halifax and the future potential for the city.

As a friendly reminder for our next networking event, registration will be opening soon for the Canadian Fuel Marketing Conference, April 6 -8, 2020 at the Fairmont Queen Elizabeth in Montreal. Be sure to save the date!

I am excited to announce that as part of our commitment to attracting the talent of the next generation to help the transportation fuels sector grow, innovate, and adapt to the changing regulatory environment, CIPMA is in the process of engaging local academic partners to put out the challenge for students to design the fuel retail site of the future. The two top entries will be awarded $2,500 CAD each and will be invited to present their proposal at the 2020 Canadian Fuel Marketing Conference in April (another reason you won’t want to miss the event!).

On the government front, CIPMA has been busy tracking election platforms and commitments and will continue to monitor new cabinet positions and mandates closely.

Included in this months’ edition of the magazine is a member profile of Wilson Fuel Co. Limited, and another release of the bi-monthly “Advocacy Corner” feature, including a post-election update on the federal political landscape and what to watch for in the coming months.

As always, please do not hesitate to reach out on any concerns or issues that you may wish to review.

Sincerely,

Jennifer Stewart President and CEO Canadian Independent Petroleum Marketers Association Canadian Independent Petroleum Marketers Association | Connection 2019 |

1

UPCOMING EVENTS CIPMA CONNECTION | 2019 EVENTS

CANADIAN FUEL MARKETING CONFERENCE April 6 – 8, 2020 | Fairmont Queen Elizabeth, Montreal QC Save the date

Canadian Independent Petroleum Marketers Association | Connection 2019 |

2

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.

CLIMATE CHANGE VS. WESTERN ALIENATION: WHAT A LIBERAL MINORITY MEANS FOR THE ENERGY SECTOR The ballots have been counted and the results are in. Canadians have decided to reward the Liberal Party of Canada and Leader Justin Trudeau with another kick at the can, governing the country.

Following an election campaign high on rhetoric and low on platform substance that has essentially seen a patchwork painting of our federation realized, the path to governing will come with its fair share of hurdles.

There is no doubt in a minority context, Prime Minister Trudeau will be looking for potential allies across all party lines to ensure success in moving forward with his legislative priorities.

The question for many in the energy sector is: how will this minority government impact us?

The good news (from a parliamentary perspective), Trudeau handily won a solid minority. At 157 seats strong, the Liberal Party came far closer to majority territory than most pundits expected. While Trudeau will most certainly need to establish good will with members opposite, the seat count effectively quashes the much hyped “threat” of a formal coalition with the NDP. Trudeau simply doesn’t need a coalition to govern.

The more likely scenario will be taken from the play books of former Prime Ministers’ Martin and Harper who governed on a vote by vote, issue by issue basis until such time as they were defeated on a matter of confidence.

How long can a Trudeau minority last in this fashion? Alas, only time will tell.

There are some certainties though the energy sector can expect to come to fruition in the months ahead.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

3

Under Trudeau, the federal government will continue to push their price on pollution plan (aka. The carbon tax) through, while simultaneously moving forward on other sustainability initiatives that will see greater increase of biofuels and other renewable options such as electric vehicle charging stations adopted by fueling stations from coast to coast to coast.

What about Trans Mountain?

While there are strides to be made, it is fair to say that the energy sector and the workers who support it, are very serious about managing the environment while continuing to act as a major contributor to the economic viability of this country.

The sector understands the environmental need to shift towards more renewable and biofuel resource options. Retailers and manufacturers alike have gotten on board and have worked in collaboration with the federal government and provincial governments to deliver on these commitments.

A strong minority seat count may prove to be good news for the Trans Mountain pipeline. Already on the public books and untied to a vote in the House of Commons, Trudeau may find an otherwise unlikely partner in Andrew Scheer, who still holds a firm grasp on official opposition status.

And yet, this story is largely untold by the industry, business leaders and politicians alike. Energy workers have to an extent been villainized in the public’s eye; a pill hard to swallow when so many Canadians still depend on these workers and the resources they bring to our market, to fuel our daily commutes to work.

With #wexitalberta trending in the Twitterverse in the hours following the federal election results, western alienation is a serious concern. If Trudeau is serious about bringing the country together, he would be well advised to continue the work necessary to ensure shovels get in the ground on that project as quickly as possible.

The fires of separation anxiety have been stoked.

The question now is, does Trudeau have the courage to make a bold move in support of the energy sector to snuff out the spark?

While in the days following the election there were still rumblings of the possibility of the NDP using the pipeline as a bargaining chip to ensure ongoing progressive support in the house, Trudeau put those fears to bed. In his post election Question and Answer media availability, Trudeau unequivocally confirmed his ongoing support for the construction of TMX and more broadly, his understanding that the resource sector is key to Canada's economic viability.

How this will come to playout with Premiers Kenney and Moe against the controversial backdrops of Bill C-48 and C-69 for which both Premiers are vocally opposed, remains to be seen.

NDP Party: Following the NDPs defeat by the Green Party in last May’s by-election in BC, the NDP have reasserted their opposition to new oil and gas infrastructure, including pipelines – a proposal we can expect they will continue to make as they attempt to define themselves as more ‘Green’ than the Greens.

To show their commitment to fighting climate change, the NDP is promising the creation of 300,000 new jobs in the transition to a green energy economy, offering to provide laid off workers impacted by the transition employment-insurancebased training to re-enter the workforce. To show they mean business, the NDP are expected to maintain the Liberal’s ‘Price on Pollution’ plan with some tweaks including lowering the emission limits from 90 per cent to 70 per cent, making companies pay the Carbon Tax on a larger portion of emissions while maintaining the fuel charge. We can expect they will continue to put the pedal to the metal on the purchase of electric vehicles, maintaining existing subsidies, and waiving the federal sales tax for certain consumer groups.

Mending division and bridging the gap between climate change and an energy driven economy The greatest challenge for Prime Minister Trudeau’s government will be one of narrative shifting.

A line in the sand has been dug between climate change activists and energy sector workers. The two have been pitted against each other throughout the federal election campaign. The story that has been drowned out by this forced division is the strides the energy sector has been making behind the scenes to innovate and improve environmental impacts.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

4

CIPMA MEMBER SPOTLIGHT WILSON FUEL CO. LIMITED

Q. Wilsons has come a long way from its roots as a construction and coal company in the early 1900’s. Wilsons Gas Stops currently operates 77 company service stations, 12 Wilsons Gas Stops and 65 Esso stations across Atlantic Canada. What is the secret to the company’s enduring success?

Wilsons is a family owned business. The family puts the interests of the company and its stakeholders first. The focus is always on long term sustainability over short term results. The family shares its name with the business. Living in the community means the reputation of the business is critical. The customer feedback loop is often very short meaning issues are surfaced and dealt with quickly. We adhere to our values and feel if we look after our customers and staff, they will look after the business.

Q. As a distributor to over 200 sites in Nova Scotia, New Brunswick, Newfoundland and Prince Edward Island, what have been the key factors ensuring efficient and quality distribution services?

We always want to have the best team. We try to recruit top people, train them well, give them the authority and tools to meet their responsibilities, and treat them well so they want to stay with Wilsons for their career. We have a partnership mentality with our suppliers where we try to be a low cost customer and set up win-win relationships. We strive to use the best technology to drive efficiency, keep costs low and service levels high.

Q. What are your biggest concerns in today’s fuel distribution and marketing ecosystem?

The rate of change is accelerating in the world today. This has many benefits for our business and our lives and can also pose many challenges. It is hard to assess the right time to bet on new technology and processes. Too late may mean missing the boat and too soon can mean betting on the wrong horse.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

5

If we don’t change fast enough we risk being left behind. Government actions make business more challenging all the time – carbon taxes, cap and trade, environmental upgrades, power rates, minimum wage, fuel formulation changes, building standards, labour standards, demand destruction and more. New technologies may disrupt our business as well – electric vehicles, autonomous vehicles, fuelling by app, and others. Social media can also destroy business reputations with one bad story or event. It is hard to know how any of us get any sleep!

Q. Looking forward, how does the company plan to remain a leading fuel supplier in Atlantic Canada and beyond?

We will continue to follow the values that have served us well for many generations. We will focus on our staff and our customers and good things will follow. www.wilsons.ca @WilsonsGasStops

Canadian Independent Petroleum Marketers Association | Connection 2019 |

6

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 FALLS AS WEAK CHINESE DATA OFFSETS HOPE ON U.S.-CHINA TRADE TALKS Oil prices eased on Monday [October 28] after four days of gains as worries about weak Chinese industrial data offset hopes oil demand will rise as talks progress on a Sino-American trade deal.

MAERSK, LLOYDS REGISTER PROMOTE ETHANOL, BIOMETHANE AS NET ZERO FUELS FOR SHIPPING A new study carried out by shipping line A. P. Moller – Maersk and classification society Lloyds Register has confirmed that the best way to decarbonize shipping is to find new sustainable energy sources.

MAJOR CONTRACTION IN IRAN IS DRIVING THE MIDDLE EAST’S GROWTH SLOWDOWN: IMF REPORT The International Monetary Fund’s latest regional outlook report for the Middle East and Central Asia, published Monday [October 28], paints a picture of uncertain economies weighed down by global factors like trade tensions as well as internal and regional turmoil.

UK PLANS TO ACCELERATE DECARBONISATION OF TRANSPORT SECTOR The UK government has vowed to accelerate its climate action for transport sector by drafting new plans to end emissions from trains, planes and cars by 2050.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

7

OVER 30% OF PARIS CARBON SAVINGS COULD COME FROM THE LAND

PEARSON FUELS BLENDS ETHANOL, RENEWABLE NAPHTHA INTO ADVANCED E85

When it comes to combating climate change the energy and transport sectors usually garner the lion’s share of the spotlight, but new research shows a sector with huge mitigation potential – land management.

Pearson Fuels, the largest distributor of E85 flex fuel in California, today [October 23] announced a partnership to purchase renewable naphtha (RN) from World Energy, one of the largest and longestserving low-carbon fuel suppliers in North America.

Pearson Fuels will blend its ethanol fuel with World Energy’s RN, a co-product from the production of renewable diesel (RD) and sustainable aviation fuel (SAF). The E85 flex fuel blend using RN creates an almost completely renewable fuel, which is the first of its kind in the world.

ETHANOL GROUPS CALL BRAZIL’S ETHANOL TRQ A STEP BACKWARD Growth Energy, the U.S. Grains Council, and the Renewable Fuels Association expressed their disappointment with the news that the Brazilian government amended the recent Aug. 31st rule that raised the quota on U.S. ethanol imports under the tariff rate quote (TRQ) from 600 million liters per year to nearly 750 million liters per year. The TRQ regulates the threshold of ethanol that can be imported into Brazil without triggering a 20 percent tariff.

UNITED STATES

TRUMP’S PROPOSAL FOR U.S. COMPANIES TO DEVELOP SYRIAN OIL FACES HURDLES: EXPERTS U.S. President Donald Trump’s suggestion on Sunday [October 27] that Exxon Mobil or another U.S. oil company operate Syrian oil fields drew rebukes from legal and energy experts.

TRUMP ADMINISTRATION SAYS PLAN WOULD RESTORE ETHANOL DEMAND The Trump administration announced Friday [October 4] it plans to implement new rules that will increase demand for ethanol, reversing a decline caused by exemptions given to oil refineries.

RISING CALIFORNIA GASOLINE PRICES HIGHLIGHT GROWING DIVIDE IN U.S. Variable gasoline costs across the country could affect consumer spending and the economy.

CORN USE FOR ETHANOL SIMMERS, ECONOMIST SAYS Poor ethanol plant margins, plants idling production, and continued haggling over small refinery exemptions provide the background for ethanol production moving into the 2019-20 marketing year.

NATIONAL CANADA’S LNG CARBON FOOTPRINT SEEN AS BETTER THAN BEST IN CLASS LNG from Western Canada is expected to have among the lowest GHG profiles in the world, layering another competitive advantage on top of fast shipping times to Asia.

CENTRAL BANK MUST PLOT COURSE FOR A DIVIDED CANADA: DON PITTIS Stephen Poloz must again make policy for a country of economic and political parts.

NO PIPELINES? NO PROBLEM: A CONTRARIAN’S CASE TO BE BULLISH ON CANADIAN ENERGY Could Canada’s lack of new pipeline capacity be a good thing? According to Bornite Capital founder and chief executive officer Dan Dreyfus, jumping on Canadian energy stocks is a smart value play right now, even if the nation’s pipeline struggles persist and the price of oil were to continue to weaken.

Canadian Independent Petroleum Marketers Association | Connection 2019 |

8

BRACE YOURSELF FOR BIGGER DEFICITS AND ENERGY UNEASE UNDER A TRUDEAU MINORITY Larger federal deficits, continued uncertainty for the energy sector and a potential push to reduce bills in the telco sector are in store for Canada after Prime Minister Justin Trudeau won a second term on Monday [October 21], investors and analysts say.

NOT EVEN A $75 CARBON TAX IS ENOUGH FOR CANADA TO MEET ITS CLIMATE CHANGE TARGETS, IMF SAYS Even if Canadian federal and provincial governments increase their carbon taxes to US$75 a tonne they will fall far short of reaching greenhouse gas emission targets, according to a new report by the International Monetary Fund.

CANADIAN ENERGY IS ‘IN PURGATORY.’ CAN TRUDEAU’S MINORITY HIT RESET? For Canada’s energy patch, the Liberal minority government that emerged from Monday [October 21]’s federal election is proof of a widening split with provinces west of Ontario, and a fresh dose of uncertainty for companies and investors. So what happens next?

OPINION: IF WE DON’T HAVE AN HONEST CONVERSATION ABOUT ENERGY, CANADA RISKS BECOMING A NATION OF HYPOCRITES Hundreds of thousands of young Canadians and millions more around the world marched last week demanding that governments take drastic action on climate change. Their concern is understandable, and a passion for a cleaner energy future is admirable.

Yet, just weeks before the marches, global oil prices jumped on the news of drone attacks on Saudi Arabian oil facilities – and Canadians seemed most worried about how it would affect prices at the pump.

WESTERN REGION ALBERTA MOVES CLOSER TO CREATING ‘ENERGY WAR ROOM’ TO BOOST IMAGE OF OIL AND GAS The government of Alberta, Canada’s main oil-producing province, on Wednesday [October 9] took the first steps towards establishing its so-called ‘energy war room’ aimed at boosting the image of the oil and gas industry.

VARCOE: ALBERTA’S FUTURE NOW RESTS ON HOW MUCH HELP TRUDEAU NEEDS FROM NDP OR BLOC, AND THAT’S BAD NEWS The Canadian oilpatch had a lot on the line heading in the federal election. Many industry players saw it as a decisive moment to regain some momentum for a sector that’s been stuck in neutral this year, frustrated by a lack of pipeline capacity and largely ignored by investors. The victory of the Liberal party in Monday [October 21]’s election — returning with a minority government — means many of the biggest issues for the sector haven’t really changed.

CANADIAN ELECTION STOKES SENSE OF ALIENATION IN WESTERN OIL PATCH Canada’s federal election on Monday [October 21] left the country’s western oil patch without any representation in Ottawa, furthering a sense of alienation in a region already deeply frustrated with the government’s energy and pipeline policies.

TRUDEAU’S VICTORY SPARKS ‘WEXIT’ SEPARATIST TALK IN CANADA’S WEST Within hours of Justin Trudeau’s Liberal Party winning re-election on Monday [October 21], a hashtag began trending in Canada that reflects the deep regional divisions that emerged from the poll: #Wexit, as in Western exit, or more specifically, Alberta separatism.

‘THIS ISN’T JUST ANGER’: SEVEN PROMINENT VOICES ASSESS THE POST-ELECTION MOOD OUT WEST The separation issue has become deeply divided, with opinions ranging from outright dismissiveness to bombastic calls for an immediate exit of the West.

ONTARIO / QUÉBEC REGION MOTOR MOUTH: QUEBEC WANTS TO TRIPLE THE AMOUNT OF ETHANOL IN GAS Exaggerating environmental bona-fides has become the norm for Quebec politicians, but will the rest of Canada follow suit?

Canadian Independent Petroleum Marketers Association | Connection 2019 |

9

DOUG FORD’S GOVERNMENT HAS MADE ‘NEXT TO NO PROGRESS’ ON PLAN TO CUT CARBON EMISSIONS: REPORT Premier Doug Ford’s government has done almost nothing on the bulk of the promises in the greenhouse-gas reduction plan Ontario introduced last November, according to a new report by an environmental watchdog group.

BATTLING ‘BATTERY CELL SCARCITY’ AND MANUFACTURING HICCUPS, TESLA QUIETLY BUYS ONTARIO AUTOMATION FIRM Tesla Inc. has quietly acquired an Ontario-based battery manufacturer in its latest investment in Canada.

Richmond Hill-based Hibar Systems Ltd., which specializes in building “complex high speed integrated battery assembly lines,” is now a subsidiary of the California-based electric vehicle maker.

WILLIAM WATSON: WEXIT, QUEBEC AND THE BITUMEN THAT BINDS US Atlantic Canada would love to buy more Canadian oil, but we in Quebec won’t allow new pipelines, though we clearly benefit from them ourselves.

YOU HAVE THREE WEEKS TO WEIGH IN ON A PROPOSED GAS PIPELINE On Tuesday [October 22] — the day after the federal election — the Impact Assessment Agency of Canada invited the public, and specifically Indigenous groups, to provide feedback on a controversial 780-kilometre natural gas pipeline between northeastern Ontario and Quebec’s Saguenay region.

partnership with QCI, LLC, a Michigan-based company that claims to have developed clean technologies to convert municipal solid waste, waste plastic and scrap tires into fuels and other useful products.

ENERGY: HOW AND WHEN ATLANTIC CANADA CURBS GREENHOUSE GAS EMISSIONS IS FIERCELY CONTESTED People are affected by the decisions surrounding energy in many ways, like billions in cost overruns at the Muskrat Falls hydroelectric project as well as attempts to harness tidal power in Nova Scotia or solar energy in Prince Edward Island. The success of such initiatives can impact the environment, the economy and/or your power bill. When the price of oil is strong, energy policy can power boom times.

ELECTRIC-VEHICLE CHARGING NETWORK PLANNED FOR N.L. IN 2020 Newfoundland and Labrador Hydro has laid out its plan to install a network of high-speed electricvehicle charging stations across the island portion of the province, hoping to have it up and running by the end of 2020.

UPDATES TO ENVIRONMENT ACT MAKE N.S. MOST PROGRESSIVE IN CANADA This past Wednesday [October 23], Environment Minister Gordon Wilson introduced legislation that updates the 12-year-old Environmental Goals and Sustainable Prosperity Act.

ATLANTIC REGION

SYDNEY PORT DEVELOPER PLOTS GREEN SHIFT WITH PLANS TO TURN WASTE INTO FUELS The developer behind the container port project in Sydney, N.S., is branching out into the green technology sector. Sydney Harbour Investment Partners (SHIP) has entered a joint venture

Canadian Independent Petroleum Marketers Association | Connection 2019 |

10

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