Roman Dubczak: Hello, everyone. Welcome to the end of Day One at the 27th Western Institutional Conference hereat Whistler, BC, hosted by the team at CIBC. A very good start to this year’s conference. As I mentioned, the 27th year that we’ve been hosting this this conference. As I mentioned, the 27th year that we’ve been hosting this this conference. An all-time record attendance this year, 124 presenting companies.98% of the presenters of the companies are C-Suite representatives of well over 300 institutional investors and representatives. So very, very busy time here at the end of day one. Day one featured a variety of industries, utilities, oil and gas, the mining sector, both precious metals and the lithium sector. The infrastructure sector was represented, as well as a few diversified companies, The infrastructure sector was represented, as well as a few diversified companies, the waste sector was another well represented industry sector. We also featured a luncheon panel, Lisa will be speaking about that, with three CEOs hosted by our colleague Harry Culham. And very interesting conversation. So with that, I’ve got my partners, Sean Gilbert, Head of Debt Capital Markets and Vice-Chair, the Honourable Lisa Raitt. So just a few observations for you here at the end of Day One, because there is a lot to absorb. So, Sean, maybe I’ll throw it over to you to start. And, you know, what did you pick up in most of the conversations and most of the presentations you saw today?
Sean Gilbert: Yeah, like you mentioned, there were some very good presentations today, broad representation. I think we talked about this last time as well, but some of those themes are the same. The first one I would say is the conservative balance sheets that companies had. I think that was highlighted. There were a lot of leverage metrics that showed that balance sheets were in good shape. And I actually think back to where we were about a year ago today and the debate about interest rates. And I think at that point they were talking about when was the next cut? Well, fast forward 12-months, rates actually rose and those conservative balance sheets, especially ones that had floating rate debt in particular, I think were a bit insulated because people didn’t over lever. So I think that came out. Heard a lot of talk about strong balance sheet management.
Roman Dubczak: Actually, an interesting point on that Sean. It seemed to be the case where a lot of presenters were fairly sublime, if that’s the right word, about when the cuts come. They recognized that we’re kind of peak rates. The cuts are going to come, it’s okay. And the balance sheets in some of the presentations were immaculate in terms of the debt.
Sean Gilbert: And there was a lot of talk about the disciplined use of capital. I think that goes hand-in-hand. The second thing, which I was happy to hear about today, was growth was still discussed. Responsible growth. Prudent growth. Not stretching balance sheet growth. But it was interesting to hear and I think, you know, again, happy to hear that they were, growth is on the table. So that was great. The last point’s an interesting one. I mean, in prior conferences there was a lot of talk about ESG and not that that’s not important. I think we all agree it is. We heard a little more of an undertone about transition and transition fuels and sort of the role that traditional fuels will play in transitioning to where we want to get to. And that was a bit of an interesting theme, obviously a bit more skewed to the to the energy producers today. But that was something that was maybe a new theme, not that people weren’t talking about the more responsible elimination and curbing, but I did actually find that that was something that was interesting.
Roman Dubczak: Yeah, it’s an interesting observation. I honestly don’t think I heard the phrase ‘ESG’ at all. Everything was in the context of an energy transition, working with Indigenous representatives, but not that not the actual word ‘ESG’. So interesting in that regard. Lisa, lots going on in terms of the views on where industry may be heading. Geopolitics. Unavoidable almost in every presentation.
The Hon. Lisa Raitt: Almost in every, yeah. First of all, I want to thank you both for letting me join your little grouping. I know last year it was just a duo, so I’m happy to be part of the team. It’s very exciting for me. But I would say picking up on what Sean said, what I heard a lot about today is the practicality of an energy transition. It’s not just about doing things because it sounds like you should be doing it, but we’re into the ‘how’ and these companies understand the ‘how’ is extremely important. Not just talking, but where the rubber hits the road. They have to be the ones that are ready. So if I were to sum up the day, I would say I heard all about opportunity. So in the lithium panel, what I heard, which I think is a good phrase to people to remember, is that, you know, the transition to EVs and the utilization of lithium and batteries, it’s not a revolution. It’s an evolution. And right now it’s cyclical in nature. And it may be at a low point in terms of the of the price of lithium, but it’s going to go up eventually. And we all have to think about how we’re going to get there. And of course, government public policy comes into play in that area. Same thing with AltaGas. We talked about propane and how they’re building a facility at Prince Rupert. That’s going to be incredibly important in order for how to transition fuels around the world. You know, Nutrien was super, super interesting. One of the stats that Ken Seitz talked about, is the fact that by 2050 we actually have to double the food production in the world. So Nutrien is sitting very pretty. So all of these folks are talking about long-term opportunity, a little bit of complaining about government policy. But being a former politician, I appreciate that and I accept it.
Roman Dubczak: You have a sensitive ear on that topic.
The Hon. Lisa Raitt: Maybe I’ll listen for it a little too much, but not to a point where they’re not believing in the Canadian ability to perform and the opportunity continue through to the luncheon. So the lunch was really interesting because we had the CEO of Enbridge, we had the CEO of Suncor and we had the President of Brookfield and they had a really interesting perspective about where we are in the world and where we’re going. And I thought Giorgia Anton had the question of the day. She asked the question of, “Where do you think the market isn’t pricing correctly?” “Where do you think the market isn’t pricing correctly?” She also asked the question of, “Where are you guys going which seems to be contrary to where the rest of the world is going? “And in each and every case, what they clearly talked about was the fact that they believe that in terms of transition, there’s going to be great opportunity, but it’s going to be slower than what people think it’s going to be. It’s going to be more expensive. And we may not be at that reliability part yet. So opportunity. Opportunity for Canada and, you know, a call from the CEOs to speak up and support Canadian industry where it makes sense.
Roman Dubczak: We definitely heard that on the energy sector in particular. We had a couple of the representatives of the Pathways Alliance and they’re well supported in the general dialog and the Q&A they face. You know, you know, I haven’t been to 27 of these. I’ve been to a lot of them and you know, I’m a bit of an observer of which rooms are full. And I would say the energy sector is currently leading the pack in that regard. Lots and lots of interest in the oil and gas producers and the midstream companies as well. So lots of interest there. And you know, to Sean, your comments earlier about balance sheets, that’s gone well in terms of cleaning up the balance sheets. And de-leveraging and then, you know, returning capital to investors. And I think that really resonates quite strongly with our investor population.
Sean Gilbert: And I would say it’s also it’s interesting, as you know, and I agree with you, those rooms are quite full and that’s a sector that’s well supported by investors. And I’ll bring it back to a bond lens because that’s what I do. But, you know, already we’ve seen three pipeline issuers in the Canadian debt capital markets. All the deals went really well. I think investors are excited to participate in, as we talked about, a sector that’s going to help just with bringing energy to Canada and hopefully, hopefully to the world. And then prudent balance sheets where companies And then prudent balance sheets where companies are really being mindful of all stakeholders. So that’s good observation. So that’s good observation.
The Hon. Lisa Raitt: And I hear collaboration. So Brookfield said, “don’t let a transaction lead you to a market. “And they also talked about the importance of their portfolio of companies doing the R&D, which is going to be needed in order to have transition work smoothly. Enbridge talked about all of the partnerships they have, Indigenous, as well as with hydrogen blending and RPG blending. And then finally, you know, Suncor talked about pathways, which is for those who don’t understand necessarily, he put it very clearly, which is it’s unique in the world that we have these point emissions in a very close proximity to one another with the ability to store it in a geological formation that’s not available anywhere else in the world. So it’s a no brainer for everyone to work together on it, and they are trying to work together on it. So it’s a nice Canadian moment to hear about collaboration today, I have to say.
Sean Gilbert: I agree. I agree.
Roman Dubczak: Yeah, all good. So look, just as takeaways from day one, some of the phrases that might be applied, ‘guarded optimism’, ‘growth orientation’, ‘general comfort’ with cost of capital, ‘not a crisis’, ‘going the right direction’ and, you know, full rooms of very engaged investors. So all in all, it’s a very strong vibe to the conference so far. So all in all, it’s a very strong vibe to the conference so far. So all in all, it’s a very strong vibe to the conference so far. So, Sean, Lisa, thank you very much. So thank you, everyone, and see you.
Thoughts from Whistler. Bringing you Day One recap of CIBC’s 27th Annual Western Institutional Investor Conference, with CIBC Capital Markets’ Roman Dubczak, The Hon. Lisa Raitt, and Sean Gilbert. Stay tuned for more updates!
