US Business

Cathay won't return to pre-pandemic capacity until 'end of 2024'

Cathay Pacific said Monday it does not expect to return to pre-pandemic levels of travel until the end of 2024, highlighting how long the Hong Kong airline’s return to normality could take.

Hong Kong imposed some of the world’s strictest travel curbs during the coronavirus pandemic and only abandoned compulsory quarantine for all international arrivals in September.

The restrictions closed off what was one of Asia’s once most connected cities and has hammered travel-reliant businesses including its flagship carrier.

In a statement released Monday, CEO Augustus Tang said the airline was “on track to achieve its target of operating up to one third of its pre-pandemic passenger flight capacity levels by the end of 2022”.

If achieved Tang said that would represent a doubling of capacity since August, the month before more than two years of compulsory quarantine rules were lifted.

But the journey back to full capacity remains a long one.

Cathay said it hoped to be operating at around 70 percent “by the end of 2023 with an aim to return to pre-pandemic levels by the end of 2024”.

Tang will be replaced by fellow veteran Cathay executive Ronald Lam on January 1.

While the number of flights to Hong Kong has increased after the government ended compulsory quarantine the airport is still far behind rivals.

Hong Kong’s airport handled 755,000 passengers in October, around 13 percent of what it used to process before the pandemic hit.

In contrast, rival hub Singapore handled 3.42 million passengers in September, 63 percent of pre-pandemic levels.

Singapore Airlines, which is already projecting to be at 76 percent capacity by the end of this year, carried 1.46 million people in September compared with Cathay Pacific’s 265,845 passengers.

While travellers to Hong Kong no longer need to quarantine they are banned from entering bars and restaurants for the first three days and must undergo multiple rounds of testing.

Wearing masks remains compulsory, even outdoors, and various social distancing measures remain.

The border with the Chinese mainland remains all but closed for now as Beijing sticks to its strict zero-Covid strategy. 

Travel industry groups have warned Hong Kong will not see a meaningful return of visitors until the three-day monitoring period and most other restrictions are lifted.

Hong Kong officials have repeatedly said they will only reopen the city gradually and have rejected calls to remove remaining curbs. 

Biden to set 'guardrails' in talks with Xi

US President Joe Biden meets China’s Xi Jinping in Bali on Monday hoping to set “guardrails” for relations between the countries, as the world’s 20 largest economies hold their first major post-pandemic summit.

The superpower sitdown will be Biden’s first in-person summit with Xi since taking office. The pair last met in 2017, when Biden was vice president.

The leaders meet with rivalry between the world’s top two economies intensifying sharply and with Beijing becoming more powerful and more assertive about replacing the US-led order that has prevailed since World War II.

The talks on the margins of the G20 have the air of the icy Cold War conclaves between American and Soviet leaders at Potsdam, Vienna or Yalta that decided the fate of millions.

Biden has spoken about the meeting establishing each country’s “red lines”.

The overarching goal will be setting “guardrails” and “clear rules of the road”, a senior White House official told reporters hours before the meeting.

“We do all of that to ensure that competition does not veer into conflict.”

Biden is expected to push China to rein in ally North Korea after a record-breaking spate of missile tests raised fears Pyongyang will soon carry out its seventh nuclear test.

Xi, whose last in-person US summit was with Donald Trump in 2019, may be in no mood to help. He arrives buoyed by securing a landmark third term in office, cementing him as the most powerful Chinese leader for generations.

Biden too arrives bolstered by his Democratic Party’s better-than-expected showing in midterm elections in which they retained control of the US Senate, although he remains vulnerable in domestic politics.

– Putin staying away –

The G20 summit opens in Bali on Tuesday and comes with food and fuel prices spiking worldwide, Ukraine mired in conflict and the renewed threat of nuclear war casting a menacing pall.

There will be one conspicuous absence around the table — Russian President Vladimir Putin.

His botched nine-month-old invasion of Ukraine has made the trip to Bali logistically difficult and politically fraught.

With members of his inner circle quarrelling publicly and his once ironclad domestic authority tarnished, Putin instead elected to send veteran foreign minister Sergei Lavrov.

Officially, neither the war in Ukraine, nor Putin’s dark threats to use nuclear weapons are on the summit agenda.

But while the ex-KGB man will not be at the summit table, his war will certainly be on the menu.

Soaring energy and food prices have hit richer and poorer G20 members alike –- and both are directly fuelled by the conflict.

On Monday, US Treasury Secretary Janet Yellen said an end to the conflict was “a moral imperative and the single best thing we can do for the global economy”.

And ahead of his departure to Bali, British Prime Minister Rishi Sunak said he would “call out Putin’s regime”.

There is likely to be pressure on Russia to extend a deal allowing Ukrainian grain and fertiliser shipments through the Black Sea when the current agreement expires on November 19.

– ‘Never been this complex’ –

At a minimum, Biden and his allies would also like to see the G20 make it clear to Putin that nuclear war is unacceptable.

At a recent meeting with German Chancellor Olaf Scholz, Xi said that a nuclear war cannot be won and should never be fought.

But a clear statement on the issue from the grouping is likely to be blocked by a mixture of Russian opposition and Chinese unwillingness to break ranks with its ally in Moscow or give Washington a win.

The G20 — a disparate and unwieldy grouping born in 1999 after the Asian financial crisis — has always been most comfortable discussing finance and economics rather than security.

Moscow would like it to stay that way.

“We categorically reject the politicisation of the G20,” the Russian foreign ministry said Sunday, offering a taste of what leaders might hear from the famously unbending Lavrov.

G20 ministerial meetings leading to the summit have failed to agree a final joint communique and Indonesian officials said Monday it remained a “work in progress” and a “main goal” for the summit.

“Honestly, I think the global situation has never been this complex,” Indonesian government minister Luhut Binsar Pandjaitan said Sunday. 

“If eventually (the G20) leaders do not produce a communique, that’s that, it’s ok.”

China unveils sweeping measures to rescue property sector

Chinese authorities have unveiled sweeping measures to rescue struggling property sector, as regulators seek to offset years of harsh pandemic curbs and a real estate crackdown that have stalled the world’s number-two economy.

The banking regulator and central bank on Friday issued a 16-point set of internal directives to promote the “stable and healthy development” of the industry, which were verified by Chinese media on Monday. 

The measures include credit support for debt-laden housing developers, financial support to ensure completion and handover of projects to homeowners, and assistance for deferred-payment loans for homebuyers.

That came on the same day the National Health Commission issued 20 rules for “optimising” Beijing’s zero-Covid policy, where certain restrictions were relaxed to limit the policy’s social and economic impact.

“We view this as the most crucial pivot since Beijing significantly tightened financing of the property sector,” wrote Ting Lu, chief China economist at Nomura, in a note.

“We believe these measures demonstrate that Beijing is willing to reverse most of its financial tightening measures.”

Hong Kong stocks surged more than three percent Monday, extending Friday’s more than seven percent rally, after the measures were unveiled.

Beijing imposed widespread lending curbs on property developers in 2020, which exacerbated their liquidity issues and caused several of the largest to default on bond payments. 

The knock-on effects on the massive real estate sector were severe, with cash-strapped developer Evergrande — China’s largest — and others failing to compete projects, sparking mortgage boycotts and protests from homebuyers. 

The measures emphasised “guaranteeing the handover of buildings”, and ordered development banks to provide “special loans” for the purpose, according to a copy circulating online.  

The document ordered financial institutions to treat state-owned and private real estate enterprises equally, as well as “actively cooperating with distressed real estate enterprises in risk management”.

The measures also included “extending the transition period arrangements… of real estate loans” for distressed developers, and support for “high-quality real estate enterprises to issue bond financing”. 

“The plan includes financial stability measures that aim to prevent massive defaults and hence provide a ‘soft landing’,” ANZ analysts wrote in a note.

But analysts cautioned that these changes — alongside the limited loosening of zero-Covid measures — would not cause an immediate recovery for the ailing sector.

New home prices have been dropping for more than a year, while demand is struggling to pick up owing to ongoing strict pandemic controls that have dampened consumer confidence. 

Western thirst for African gas raises alarm at COP27

Wealthy Western nations facing an energy crunch are eyeing natural gas in Africa at the expense of supporting green transition in poorer countries, climate activists at COP27 charge.

European countries have been scrambling for alternative sources of gas after the continent’s former top supplier, Russia, slashed exports in apparent retaliation for Western sanctions over Moscow’s invasion of Ukraine in February.

Gas-rich Norway has since overtaken Russia as a leading supplier, but Europe sees great potential in African fossil fuel reserves, including promising oil and gas discoveries in Senegal and Democratic Republic of Congo.

Europe wants “to turn Africa into its gas station,” Mohamed Adow, director of the Power Shift Africa think tank, said at the UN climate summit in Egypt.

“We don’t have to follow the footsteps of the rich world that actually caused climate change in the first place.”

Exporting natural gas may bring short-term profits but exacerbate the climate crisis and leave African nations worse off in the long run, activists, researchers and advocacy groups said.

Research group Climate Action Tracker called the global dash for gas a “serious threat” to the Paris Agreement goals — of keeping global warming well below two degrees Celsius, and preferably at 1.5 degrees compared to pre-industrial levels.

– ‘Stranded assets’ –

Some African leaders argued the potential benefits for people on the world’s poorest continent outweighed the harm from the production and export of fossil fuels.

“We are in favour of a just and fair green transition, instead of decisions that harm our development process,” Senegalese President Macky Sall told some 100 world leaders last week at COP27.

Germany — the European country most dependent on Russian supplies before the war — has been keen to tap Senegal’s gas deposits.

Omar Farouk Ibrahim, secretary general of the African Petroleum Producers’ Organization, argued the slight increase in the continent’s marginal contribution to greenhouse gas emissions “would make a fundamental difference in whether people live or die”.

“We have 600 million people in Africa who don’t have access to electricity at all. We have over 900 million people in Africa who do not have access to modern form of energy for cooking or domestic heating,” he said.

“No progress can be made in any society without energy.”

But advocacy groups were not convinced Africa’s poor would reap any benefits.

“History shows us that… extraction in African countries has not resulted in development,” said Thuli Makama, African programme director at Oil Change International.

Makama, a lawyer from Eswatini, said the Ukraine war would only trigger “short-term” demand from Western nations, leaving African countries with “stranded assets” — infrastructure that becomes obsolete as the world turns to renewables.

Governments and companies would have invested in infrastructure only to be “left with stranded assets, clean-up expenses and all the devastation that comes with the industry for local people”, Makama warned.

– ‘Incredible’ potential –

A report released Monday by the Carbon Tracker Initiative think tank said Western investment in fossil fuels will eventually evaporate, encouraging African countries instead to seize on the potential offered by solar power.

“The way to help us actually address our energy poverty challenge is for us to tap the incredible renewable energy potential that exists on the continent of Africa,” Adow said.

African nations could refuse any further extraction of fossil fuels and make the continent a “green leader”, he added.

But investment in renewable energy across the continent last year fell to its lowest level in 11 years, the research group BloombergNEF said on Wednesday.

Out of the $434 billion invested worldwide in renewables in 2021, a meagre 0.6 percent went to projects in Africa, the report said.

The Carbon Tracker Initiative report said the solar industry across Africa provided 14 gigawatts of power in 2021.

It noted however that with production costs falling, solar power in Africa “has the potential to grow… to over 400 gigawatts by 2050” — half of the continent’s energy needs.

Most Asian markets extend global rally on China hopes

Asian markets mostly rose Monday, extending a global surge, as a loosening of China’s Covid rules and plans to help its property sector followed a drop in US inflation that eased rate hike fears.

Equities rocketed last week and the dollar sank after data showed US price rises eased in October, providing the Federal Reserve with room to take its foot off the pedal in tightening monetary policy.

The news led some commentators to suggest a feared recession in the world’s top economy could be shallower than first feared, or might be averted entirely.

The optimistic mood was given an extra injection late Friday by news that Beijing would relax some of its strict Covid-19 restrictions, a day after officials vowed to stick to their zero-tolerance strategy that has hammered growth.

Authorities have also reportedly unveiled a 16-point plan to support the beleaguered property sector, a major component of the country’s sprawling economy

The industry has come under immense pressure since China imposed a number of restrictions in 2020 aimed at reeling in debt, with major developers teetering on the brink of collapse.

The news indicates the leadership is beginning to focus on supporting the economy, a crucial driver of global growth.

“It’s a meaningful easing,” said Larry Hu of Macquarie Group.

“It seems that the room for policy change has widened on various fronts after the Party Congress (last month), including for the two major headwinds to the Chinese economy: Covid Zero and property.”

Nomura’s Lu Ting said the support for the developers was “the most crucial pivot since Beijing significantly tightened financing of the property sector”.

“We believe these measures demonstrate that Beijing is willing to reverse most of its financial tightening measures,” he added.

“Those cash-strapped developers (especially private ones), construction companies, mortgage borrowers and other related stakeholders can now breathe a sigh of relief.”

He warned, however, that the sector continued to struggle and the “measures may have little direct impact on stimulating home purchases”.

In early trade, Hong Kong led gains again — having soared more than seven percent Friday — with property firms the best performers.

Shanghai, Sydney, Singapore, Seoul, Taipei and Manila were all well up, though Tokyo was hit by profit-taking. There were also small losses in Bangkok, Jakarta and Wellington.

While the mood has lightened after the US inflation read, there is still a sense of trepidation among traders who fear the Federal Reserve will continue to lift borrowing costs while analysts warn last week’s rally may have been overdone.

“It was always clear that it would be easy to bring inflation down from 9-10 percent to 4-5 percent,” said SPI Asset Management’s Stephen Innes.

“Pushing it back to two percent could be much more complicated and require higher rates for longer. Hence, the central bank fight is far from over. But for now and until an indication of inflation proves stickier than expected, risk-on could roll on a bit further.”

Still, the yen, pound and euro held most of their gains against the dollar, which came in reaction to the consumer price index reading.

Traders are keenly awaiting a meeting later in the day between US President Joe Biden and Chinese counterpart Xi Jinping, with hopes for an easing of tensions between the superpowers.

The two are due to meet at the G20 summit in Bali, with Biden saying he wanted to repair lines of communication and help establish “guardrails” to keep the competing superpowers from veering into conflict.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.8 percent at 28,047.58 (break)

Hong Kong – Hang Seng Index: UP 2.4 percent at 17,733.96

Shanghai – Composite: UP 0.4 percent at 3,099.19

Pound/dollar: DOWN at $1.1782 from $1.1839 on Friday

Euro/dollar: DOWN at $1.0323 from $1.0361

Dollar/yen: UP at 139.17 yen from 138.70 yen

Euro/pound: UP at 87.60 pence from 87.49 pence

West Texas Intermediate: UP 0.4 percent at $89.30 per barrel

Brent North Sea crude: UP 0.4 percent at $96.41 per barrel

New York – Dow: UP 0.1 percent at 33,747.86 (close)

London – FTSE 100: DOWN 0.8 percent at 7,318.04 (close)

Most Asian markets extend global rally on China hopes

Asian markets mostly rose Monday, extending a global surge, as a loosening of China’s Covid rules and plans to help its property sector followed a drop in US inflation that eased rate hike fears.

Equities rocketed last week and the dollar sank after data showed US price rises eased in October, providing the Federal Reserve with room to take its foot off the pedal in tightening monetary policy.

The news led some commentators to suggest a feared recession in the world’s top economy could be shallower than first feared, or might be averted entirely.

The optimistic mood was given an extra injection late Friday by news that Beijing would relax some of its strict Covid-19 restrictions, a day after officials vowed to stick to their zero-tolerance strategy that has hammered growth.

Authorities have also reportedly unveiled a 16-point plan to support the beleaguered property sector, a major component of the country’s sprawling economy

The industry has come under immense pressure since China imposed a number of restrictions in 2020 aimed at reeling in debt, with major developers teetering on the brink of collapse.

The news indicates the leadership is beginning to focus on supporting the economy, a crucial driver of global growth.

“It’s a meaningful easing,” said Larry Hu of Macquarie Group.

“It seems that the room for policy change has widened on various fronts after the Party Congress (last month), including for the two major headwinds to the Chinese economy: Covid Zero and property.”

Nomura’s Lu Ting said the support for the developers was “the most crucial pivot since Beijing significantly tightened financing of the property sector”.

“We believe these measures demonstrate that Beijing is willing to reverse most of its financial tightening measures,” he added.

“Those cash-strapped developers (especially private ones), construction companies, mortgage borrowers and other related stakeholders can now breathe a sigh of relief.”

He warned, however, that the sector continued to struggle and the “measures may have little direct impact on stimulating home purchases”.

In early trade, Hong Kong led gains again — having soared more than seven percent Friday — with property firms the best performers.

Shanghai, Sydney, Singapore, Seoul, Taipei and Manila were all well up, though Tokyo was hit by profit-taking. There were also small losses in Bangkok, Jakarta and Wellington.

While the mood has lightened after the US inflation read, there is still a sense of trepidation among traders who fear the Federal Reserve will continue to lift borrowing costs while analysts warn last week’s rally may have been overdone.

“It was always clear that it would be easy to bring inflation down from 9-10 percent to 4-5 percent,” said SPI Asset Management’s Stephen Innes.

“Pushing it back to two percent could be much more complicated and require higher rates for longer. Hence, the central bank fight is far from over. But for now and until an indication of inflation proves stickier than expected, risk-on could roll on a bit further.”

Still, the yen, pound and euro held most of their gains against the dollar, which came in reaction to the consumer price index reading.

Traders are keenly awaiting a meeting later in the day between US President Joe Biden and Chinese counterpart Xi Jinping, with hopes for an easing of tensions between the superpowers.

The two are due to meet at the G20 summit in Bali, with Biden saying he wanted to repair lines of communication and help establish “guardrails” to keep the competing superpowers from veering into conflict.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.8 percent at 28,047.58 (break)

Hong Kong – Hang Seng Index: UP 2.4 percent at 17,733.96

Shanghai – Composite: UP 0.4 percent at 3,099.19

Pound/dollar: DOWN at $1.1782 from $1.1839 on Friday

Euro/dollar: DOWN at $1.0323 from $1.0361

Dollar/yen: UP at 139.17 yen from 138.70 yen

Euro/pound: UP at 87.60 pence from 87.49 pence

West Texas Intermediate: UP 0.4 percent at $89.30 per barrel

Brent North Sea crude: UP 0.4 percent at $96.41 per barrel

New York – Dow: UP 0.1 percent at 33,747.86 (close)

London – FTSE 100: DOWN 0.8 percent at 7,318.04 (close)

Biden to set 'guardrails' in talks with Xi

US President Joe Biden will meet China’s Xi Jinping in Bali on Monday to set “guardrails” for relations between the countries, as the world’s 20 largest economies hold their first major post-pandemic summit.

In the last three years, the rivalry between China and the United States has intensified sharply as Beijing has become more powerful and more assertive about replacing the US-led order that has prevailed since World War II.

Monday’s talks on the margins of the G20 have the air of the icy Cold War conclaves between American and Soviet leaders at Potsdam, Vienna or Yalta that decided the fate of millions.

Biden has spoken about the meeting establishing each country’s “red lines”.

The overarching goal will be setting “guardrails” and “clear rules of the road” a senior White House official told reporters hours before the meeting.

“We do all of that to ensure that competition does not veer into conflict.”

Biden is expected to push China to rein in ally North Korea after a record-breaking spate of missile tests raised fears Pyongyang will soon carry out its seventh nuclear test.

Xi may be in no mood to help. He enters the meeting buoyed from recently securing a landmark third term in office, cementing him as the most powerful Chinese leader for generations.

Biden has been boosted by news that his Democratic party retained control of the US Senate after performing better than expected at the midterm elections, although he remains vulnerable on domestic politics.

– Putin staying away –

The superpower sitdown is likely to dominate the G20 summit, which comes with food and fuel prices spiking worldwide, Ukraine mired in conflict and the renewed threat of nuclear war casting a menacing pall. 

There will be one conspicuous absence around the table — Russian President Vladimir Putin.

His botched nine-month-old invasion of Ukraine has made the trip to Bali logistically difficult and politically fraught.

With members of his inner circle quarrelling publicly and his once ironclad domestic authority tarnished, Putin instead elected to send veteran foreign minister Sergei Lavrov.

Officially, neither the war in Ukraine, nor Putin’s dark threats to use nuclear weapons are on the summit agenda. 

But while the ex-KGB man will not be at the summit table, his war will certainly be on the menu.

Soaring energy and food prices have hit richer and poorer G20 members alike –- and both are directly fuelled by the conflict.

On Monday, US Treasury Secretary Janet Yellen said an end to the conflict was “a moral imperative and the single best thing we can do for the global economy”.

And ahead of his departure to Bali, British Prime Minister Rishi Sunak said he would “call out Putin’s regime”.

There is likely to be pressure on Russia to extend a deal allowing Ukrainian grain and fertiliser shipments through the Black Sea when the current agreement expires on November 19. 

– ‘Never been this complex’ –

At a minimum, Biden and his allies would also like to see the G20 make it clear to Putin that nuclear war is unacceptable. 

Even that once uncontroversial position is likely to be blocked by a mixture of Russian opposition and Chinese unwillingness to break ranks with its ally in Moscow or give Washington a win.

The G20 — a disparate and unwieldy grouping born in 1999 after the Asian financial crisis — has always been most comfortable discussing finance and economics rather than security.

Moscow would like it to stay that way.

“We categorically reject the politicisation of the G20,” the Russian foreign ministry said Sunday, offering a taste of what leaders might hear from the famously unbending Lavrov.

“We are convinced that the G20 is meant to deal specifically with socio-economic issues.”

A string of G20 ministerial meetings leading to the summit failed to agree a final joint communique — a procedural-sounding tradition that can be important in driving cooperation.

“Honestly, I think the global situation has never been this complex,” said Indonesian government minister Luhut Binsar Pandjaitan on the eve of the summit. 

“If eventually (the G20) leaders do not produce a communique, that’s that, it’s ok.”

Fort McKay: where Canada's boreal forest gave way to oil sands

The acrid stench of gasoline permeates the air. And the soot coats everything in sight: the trees, the bushes, even the snow in winter. And all day long, explosions send the birds soaring to safety.

At Fort McKay near Fort McMurray in western Canada, in the heart of the country’s boreal forest, the pines and the people were long ago cleared out to make way for huge open-pit mines dedicated to excavation of oil sands.

It’s one of the biggest industrial projects in the world: as seen from above, the zone is in stark contrast to the vast expanse of green surrounding it. Huge black holes are gouged in the brown earth — they are giant pools of water.

Then there is the network of roads on which hundreds of trucks drive every day, and the immense factories, with smoke spewing from wide chimneys.

On the ground, the noise is deafening. And it’s quite a scene for the uninitiated: in the middle of the huge basins dug to capture the polluted waters stand huge metal scarecrows clad in helmets and security vests.

The ghoulish creatures are designed to scare away millions of migratory birds that arrive every year in this northern part of Alberta province. Adding to the mayhem: airhorns that are used several times a minute.

The mines have made the people left in Fort McKay — many of them Indigenous Canadians — very rich. But the installations have also profoundly altered and damaged the land on which their ancestors relied for centuries.

“Everything has changed, everything’s destroyed to me now,” says 74-year-old Margie Lacorde who lives in the center of town in a house chock full of knick knacks and framed photographs.

The talkative Lacorde, who belongs to the Metis people, is sad to see the parched, yellowing leaves due to drought, and wishes she could still swim in the rivers and gather berries in the forest like she did in her youth.

The hunting grounds are long gone — the land was sold for industrial use.

“The pollution is killing our nature,” Lacorde tells AFP, though she herself worked in the oil industry for years to provide for her family.

She remembers her childhood with a significant bit of nostalgia. 

Back then, families gathered snow and melted it to use as drinking and cooking water. Such a thing would be impossible today — once the snow hits the ground, it’s immediately filthy, covered in the dust that filters down from the factories.

– ‘Desecrated’ –

“We’re First Nations and this is our territory that is all being desecrated by the oil industry for the sake of the dollar, money, prosperity,” says Jean L’Hommecourt, an environmental activist who took up the fight her parents once championed.

Even if agreements were reached with Indigenous communities to create jobs and protect some natural resources, the ecological impact of mining the oil sands have been so great that the 59-year-old woman says her people are now at risk.

“I lost my prosperity when the industry came in and took over all our lands and our waters and our access to our wildlife… everything that we depend on to sustain our culture has been compromised by industry,” she says bitterly.

The area is a far cry from the picture postcard ideal of the Canadian West. There are no crystalline blue waterways or fish-filled rivers here. 

Instead, Moose Lake — sacred to L’Hommecourt’s Dene people — is now only accessible by all-terrain vehicle, a five-hour drive on a road pockmarked by potholes that runs in between the mines.

When she was growing up, L’Hommecourt’s family cabin was in the middle of the forest, far away from the noise and bustle. But after the first oil sands mine was built in 1967, development proceeded at a rapid pace.

Today, the active oil sands extraction sites form a chain that is more than 60 kilometers (40 miles) long, hugging the shores of the Athabasca River. 

Fort McKay — population, 800 or so — is a tiny speck on a map of this industrial complex.

Canada is home to 10 percent of the world’s known crude oil reserves — much of that is found in the oil sands of Alberta.

Every day, nearly three million barrels of crude are extracted from the sands, according to official government data, helping to make Canada the world’s fourth largest oil producer, and the primary exporter of crude to the United States.

In all, more than 4,800 square kilometers are used for oil sands mining.

At first, local populations were consulted and their fears were noted, L’Hommecourt says.

“And then they just said okay, well, we collected the information, we collected their concerns and everything else and we’ll mitigate with the money,” she added.

– Pollution –

Many environmental activists say the impact of the oil industry is so great that the term “ecocide” is not too strong. Beyond the tangible destruction of the boreal forest, there is the massive amount of pollution in the air.

The oil and gas sector accounts for a quarter of Canada’s greenhouse gas emissions, according to the latest official figures released this year. Of that total, the oil sands are responsible for 12 percent.

And traces of other toxic emissions, such as sulfur and nitrogen oxides, have been detected in the soil and the snow dozens of kilometers from the mining zone.

The industry also consumes a massive amount of water, taken from nearby rivers and lakes.

“There’s still a lot we need to do on recognizing the harm from cleaning up existing operations,” says Keith Stewart of the environmental pressure group Greenpeace, slamming companies that drag their feet on such matters.

Stewart nevertheless acknowledges a “huge shift” on protecting the environment in recent years.

“For a long time, even the notion that we could limit expansion was viewed as crazy and now… the idea of large-scale expansion now seems crazy,” he said.

That reversal is not uniformly popular, as not everyone here sees the oil sands as a bad thing.

“The reality is that they shut off the oil sands tomorrow, my community would starve,” says Ron Quintal, chief of the Fort McKay Metis, noting that nearly everyone around works in or for the industry.

For Quintal, “Indigenous communities have spent 30 to 40 years… trying to get their foot in the door” so it would be “very difficult for us to try to take our people backward.”

He added matter-of-factly: “The development of the oil has empowered us to be able to do things that weren’t possible before.”

In Canada's boreal forest, one man works to save caribou

Even though he lives in the middle of Canada’s boreal forest, Jean-Luc Kanape can sometimes go weeks without seeing a single caribou. But for as long as he can remember, the animals have been part of his life.

For centuries, “our ancestors survived thanks to the caribous — using its meat, pelts and tools made from its bones,” says Kanape, a member of the Innu Indigenous group.

“Now, it’s our turn to help them.”

The caribou is a symbol of the power of the subarctic boreal forest, but also the beating heart of Canada’s Indigenous culture.

But the broad-snouted deer is “at risk,” Kanape says, notably because of the loss of its natural habitat.

In Quebec province, the animal’s future is threatened by the lumber industry, which is crucial in some areas, providing 60,000 jobs, but which also contributes to mass deforestation.

Governments “are supposed to protect all living beings in their territory” but “do nothing” for the caribous, says Kanape, who helps the community identify and tag the remaining herds.

All around the 47-year-old’s cabin, located not far from the St Lawrence River but a two-hour drive from the nearest village, there is evidence of deforestation — the once lush mass of spruces and poplars has been hacked up.

As seen from above, the woods look like a jigsaw puzzle that has been taken apart. In some areas, trees line the ground — they will be chopped up and taken away. for the most part, they are pulped to make paper or used in construction.

– Predators –

Recent data suggests that caribous, which are called reindeer in Europe, have a better chance of survival if at least 65 percent of their living habitat is preserved.

But in this part of Canada, roughly 80 percent of their habitat has been disturbed in some way. Tree harvesting helps renew the forest, but that also brings about changes in the native flora and fauna.

Moose have arrived en masse — which also means the animals that prey on them have arrived too, notably wolves, whose migration has been facilitated by paths cut in the wilderness by the lumber companies. 

When new trees sprout up, the tiny fruit bushes that crop up alongside them also bring bears — another hunter of caribous — to the area. 

When Kanape heads out to track caribou herds, he uses both ancestral teachings and surveillance data collected by drones.

Whether traveling by boat along the river, in his pickup truck or on foot, he scours the ground for hoof prints. Each autumn, those hoofs adapt, their edges sharpening to allow the caribous to break through the ice to get at a major food source: lichen.

In recent weeks, Kanape was tracking a female caribou and her calf, who were living in a partially deforested area — putting them at risk.

“How can I make them understand that they’d be better off in more wooded areas?” says Kanape. “She came here because she knows the area, which is totally normal.” 

He sometimes chases away the wolves to give the caribous a better chance to survive through the summer.

As things stands now, a precipitous fall in the calf population of the region’s caribous makes their long-term survival not very likely, experts from Quebec’s forests ministry warn.

– Growth –

From the Canadian Rockies in the west to Quebec’s forests in the east, the caribou has seen its territory dwindle over the last 150 years, and the population has declined — a shift that nothing seems to reverse.

Since 2003, the caribou has been listed as a species at risk of extinction, and is one of the most studied animals in North America.

In Canada, its survival will depend on the expansion of the oil, lumber and mining industries. The country has struggled to implement viable plans to protect the species, researchers say.

Overall, experts are concerned that the fate of the caribou is a “tipping point” — and thus that the animal should be considered an “umbrella species” worthy of protecting, so that other animals in their habitat are indirectly saved.

“Dozens of species that don’t get the same attention also need ancestral forests — it’s a natural habitat that is vital for many,” explains Martin-Hugues Saint-Laurent, a biologist at the University of Quebec in Rimouski.

Canada’s boreal forest is home to 85 species of mammals, 130 species of fish and 300 different bird species, many of them migratory.

“The forest is not just about the trees,” says Louis De Grandpre, a scientist who has been researching the issue for 30 years.

“We are just barely starting to understand the scope of what’s happening under our feet in the forest subsoil, where bacteria, mushrooms and a myriad of microorganisms are all at work.”

The Innu people, who believe they are just as much a part of the forest ecosystem as all other living creatures, advocate for the creation of a protected forest zone. 

Kanape has a far-reaching, philosophical outlook — the animal kingdom will ultimately triumph.

“When humans disappear from the Earth, the planet will be even more beautiful — it will reclaim itself,” he says.

Subarctic boreal forest, vital for the planet, is at risk

It burns, it drifts, it falls victim to insects. And it’s shrinking.

The boreal forest, which is second only to the Amazon in terms of its vital role in ensuring the future of the planet, encircles the Arctic — and it is in just as much danger from climate change as the South American rainforest.

The deep, verdant green ring — which stretches across Canada, Scandinavia, Russia and Alaska — has been weakened by increasing forest fires, the melting of permafrost, intensifying insect infestations and warming temperatures.

Experts are categorical in their warnings: the forest is encroaching on the tundra, and the prairies are slowly taking the place of the trees.

In his cabin in Quebec, not far from the banks of the St Lawrence River amid the trembling aspen and black spruces, Jean-Luc Kanape, a member of the Innu Indigenous group, says he likes to feel the “energy of the wind, the cold.”

“When I’m in the heart of the forest, I feel like I’m part of it. The trees are like my roots,” says the brawny 47-year-old, his hair askew and his skin bronzed from the sun.

Kanape has dedicated his life to the protection of the caribou, a species whose habitat is under threat because of the effects of deforestation and global warming. And he is worried. 

“We often say we need to save the planet, but that’s not true,” he says, suggesting humanity’s own existence is what is at stake.

The forest — named for Boreas, the Greek god of the north wind — covers 10 percent of the world’s land surface and has a decisive impact on the globe’s northern oceans and overall climate.

Its 1.2 billion hectares (nearly three billion acres), which account for nearly a third of all forested land in the world, help slow global warming by absorbing a significant amount of carbon emissions.

The boreal forest holds twice as much carbon as all tropical forests combined, and also helps purify a massive amount of freshwater. 

There have always been natural changes to its makeup, but scientists are now concerned that those changes are happening more often, and are even becoming the norm.

– ‘Monster’ fire –

Dead tree trunks stretch towards the sky — ghostly white shadows staining the green canopy in this corner of Alberta province. 

On the ground, shrubs and grass battle to stay alive.

“I’ll never again see a spruce tree in these hills,” laments Harvey Sykes, a 70-year-old former oil industry worker who lives in the Fort McMurray area, home to the world’s biggest oil sands production complex.

Here, the boreal forest still bears the signs of a huge fire in May 2016 that sent 90,000 residents scrambling for safety from a wall of flames along a lone access road.

“This one was a monster,” recalls Sykes, pointing to the hills where the blaze began. “A fire like that, you don’t confront it… you get out of there.”

Like many in the region, Sykes lost everything in the inferno — his house, his belongings and a lifetime of mementos.

The wildfire remains the most destructive natural disaster in Canada’s history, with 2,500 buildings destroyed and damages totalling nearly 10 billion Canadian dollars ($7.4 billion US).

It was the first time in the country’s history that residents found themselves in danger as a direct result of the consequences of climate change on the boreal forest.

– Adaptation –

Today, wildfires are multiplying in Alaska, Canada and Siberia. They are one of the greatest threats to northern woodlands even if, paradoxically, they are also essential to the forest’s survival and evolution.

Fires release precious nutrients into the forest soil, and create holes in the tree canopy that allow sunlight to break through, contributing to the growth of new trees.

In the boreal forest, the most prevalent type of fire is a crown fire, which spreads quickly from treetop to treetop. These blazes are more intense and more difficult to fight than fires on the ground.

Fires can burn all winter under the snow, producing toxic smoke and significant amounts of carbon monoxide.

The forest’s plants are resistant to the bitter Canadian cold, and have adapted to the recurrent fires — the trembling aspen burn quickly but regenerate easily.

Some species even depend on the fires — jack pines or black spruces have sap-coated cones that open up to deposit seeds as the flames spread, ensuring their survival.

But data collected over the last few decades indicates that the increasing frequency and intensity of the fires have reached an abnormal level.

“We now have a wildfire season that is longer and more severe. They are more fierce, and cover larger areas,” explains Yan Boulanger, a researcher in forest ecology at Canada’s ministry of natural resources.

Fires are now regularly twice as destructive in terms of surface area as they were a century ago, and 70 percent of the land consumed in fires over the last 20 years was in the boreal forest, according to satellite data made public in August.

Experts from Global Forest Watch, the World Resources Institute and the University of Maryland — who collected the data — also revealed that extreme heat waves are five times as likely as they were 150 years ago.

Global warming is having an especially devastating effect on northern lands including the boreal zone, as temperatures are increasing two or three times quicker than on the rest of the planet.

Extreme heat leads to more lightning, which in turn sparks the worst fires, Boulanger says. Destruction of forested lands in these blazes leads to massive greenhouse gas emissions, which fuel climate change.

While forest fires are one of the most extreme and visible results of warming temperatures, the actual increase in heat has even worse implications.

– ‘Drunken trees’ –

They are known as “drunken trees” — tilted sideways due to melting permafrost. Eventually, the soil will completely erode away from the roots, and the trees will tumble.

This buckling and sinking is because of the degradation of the permafrost, ground that has remained frozen for at least two years in a row.

“You have potential for large shifts,” says Diana Stralberg, an Edmonton-based researcher for the natural resources ministry. Sometimes areas “might be flooded and lose forests,” she explains, becoming bogs or lakes.

As the ground is thawing, bacteria eat away at the biomass compiled for thousands of years, generating carbon and methane emissions that are contributing to the acceleration of global warming.

Elsewhere, in the far north of the boreal zone, trees are crowding the tundra, which features better conditions for their survival.

Scientists recently discovered that white spruces were being displaced towards the north in Alaska, to a part of the Arctic tundra that had not seen such tree growth in thousands of years.

In a decade, the tree cover advanced a whopping four kilometers (2.5 miles).

On the southern edge of the boreal forest, drought has reduced stands of trees to shrubs and high grasses.

“In the west, we could end up with forests that simply become prairies because the extent of the drought or the frequency of climatic change is too great to sustain the tree population,” Boulanger warns.

Stralberg remembers seeing computer maps modeling the effects of climate change for the first time when she started working on issues related to the boreal forest a few years ago.

“I thought it was just wrong, because it was just so extreme,” she says. 

And then her colleagues started reaching the same conclusions: that the boreal forest was rapidly shifting north, absorbing a part of the tundra and losing ground to the prairies at the southern edge.

The displacement of an ecosystem is not without consequences.

“You can lose forest a lot faster than it can grow and provide habitat for wildlife,” says the 52-year-old Stralberg. 

As the mercury rises, evaporation occurs more easily and plants lose water more quickly due to transpiration. They close the pores of their leaves and battle to survive. 

But by slowing their own growth, the plants lose some of their capacity to eliminate carbon dioxide from the atmosphere — a vicious circle indeed.

– ‘Snowball effect’ –

In the western part of Quebec province, government research scientist David Pare and his team are studying tree litter — the decomposing organic material on the forest floor that has acted as a giant carbon sink for centuries.

Here, the sun struggles to break through due to the twisting, intertwined tree canopy. Thousands of pine needles cover the mossy ground.

Tree litter can store five to six times as much carbon dioxide as other plant matter, and Pare wants to see how resilient the ground is. 

A plethora of experiments are being carried out across Canada to better understand the tree litter and predict its future role in reducing the amount of greenhouse gases in the atmosphere.

In some areas, the subsoil is heated, and in others, the amount of organic matter on the ground is varied. Tree roots are cut elsewhere.

Dozens of tiny orange flags and wooden trays embedded in the fallen pine needles mark off the various trials that have been in place for six years.

“We want to know how much carbon has accumulated in the soil and how it happens,” Pare explains.

“Because if global warming is diminishing the carbon sink, that will only lead to more warming,” says the 59-year-old Pare. 

Scientists are fearful of such a “snowball effect,” which could eventually lead to significant loss of the boreal forest’s role as a carbon sink. 

But the forest is also at risk of falling victim to another phenomenon brought on by higher temperatures: insect infestations.

– The curious case of the hemlock looper –

It’s a surprising sight: on a green hillside peppered with vibrant trees, there is a square marked off by dead trees stripped of their limbs, their dried out trunks stretching skyward.

“It’s like a bomb went off. All the trees are dead in this area, killed by the hemlock looper,” says Pare, his white hair covered by a construction helmet.

The hemlock looper is a moth native to North America that can devour all leaves and needles on trees in one season, explains the researcher as he walks through the raspberry bushes that have cropped up in the area.

Several events linked to global warming seem to be converging and could explain the insect infestations, which are also happening in Scandinavian forests.

Trees are already weakened by drought and so struggle to fend off the voracious bugs who take advantage of longer summers and warmer winters.

Hundreds of thousands of hectares of forest land have been devastated by the eastern spruce budworm, another species native to Canada and the eastern United States that mainly attacks fir trees.

“As global warming progresses, the budworm now can reach areas that it could not get to in the past,” says researcher Louis De Grandpre, who has studied the boreal forest for 30 years.

The key now is to measure the long-term effects of these infestations “because we really don’t know what the future of these forests will look like,” he added.

– Tipping point? –

For Pare, “there is a limit to how much trees can endure.”

For now, scientists are pondering whether the boreal forest is approaching a so-called “tipping point,” a threshold beyond which carbon and methane emissions are inevitable and changes to the ecosystem are irreversible.

Experts say they still hope for the ecosystem’s continued resilience.

Stralberg believes the damage can still be limited.

“We looked at areas that will remain cooler and wetter in a warming world, like the shores of large interior lakes, large peatland complexes and north-facing hillsides,” she explains.

“These are areas where we can buy time for cold-adapted species like spruce trees and caribou to adjust to climate change in the near term.”

Careful monitoring, reforestation, legal protections, technological progress and time-honored Indigenous methods can help maintain the carbon sink.

“I think that cultural burning can be one of the solutions… combined with some of the new technology,” says Amy Cardinal Christianson, a research scientist with the Canadian Forest Service who studies how fires affect Indigenous communities.

Cultural burning, long practiced by Indigenous communities, can help reduce the impact of forest fires by eliminating ground cover. Christianson, a member of the Metis people, explains the burning as “a slow fire, a cool burn.”

Unlike in the Amazon, in this inhospitable cold-climate forest, human action — like deforestation or oil sands mining — is less detrimental to the environment than natural phenomena caused by climate change.

Experts say that in order for the boreal forest to maintain its essential role in ensuring the survival of the planet, the solution must be a global one. 

For Boulanger, the government forest researcher, we must “have faith in the next generation.”

Close Bitnami banner
Bitnami