Robert Hope: In the release and actually through the call, volumes upwards has been highlighted as kind of a driver of the outperformance this year and into next year. In the MD&A, tolls were also highlighted as moving up. So can you maybe talk about your ability to move up tolls, whether it’s to kind of capture higher costs or increase margins?
Cameron Goldade: Rob, I’ll start with that and maybe ask Jaret to chime in. I think, obviously — first of all, I’d say we have a very high complement of our business, which is sort of long-term contracted tolls, many of which have sort of inflator provisions built right into them. So they’re a function of CPI or other inflation indexes. We see that in our conventional business. We see that in our transmission business, some of our natural gas liquids business as well. And then obviously, we’ve got some contracts where they’re shorter and more evergreen and sort of more market facing. And so those are opportunities where we’re obviously working with the customers on meeting their needs first and foremost and sizing the pricing of our offering relative to the value. And so we — most of the increases that we’ve seen that you saw drove the Q3 2023 variance are a function of those locked in inflator mechanisms. That would be the lion’s share of it.
Scott Burrows: And just to add to that, Rob, would be obviously on the unregulated assets, the IT toll, we obviously have some torque there. But our goal is really to work with our customers, and we prefer to convert that into a longer-term contract commitment with our customers versus higher IT tolls to be honest.
Robert Hope: And then just regarding the comments that 2024 could be a heavier capital year if some projects come to fruition. When you take a look at the development backlog, how do you look at pacing other smaller organic projects or midsized projects in the context of Cedar or potentially Trans Mountain? Just want to get a better sense of how you’re thinking about pacing capital with some larger unknowable variables out there.
Scott Burrows: Yes. Well, for the most part, our capital program is driven by our customer needs. And as a service provider, we do our best to match the capital expansions to our producers’ needs. So first and foremost, there’s not really a lot of pacing in the conventional side of the business. I’d say we’re just trying to get ahead of volume growth that we see. So that spend kind of happens on a natural cadence, I’d say, driven by customer demand. When it comes to 2024, obviously, it’s a big year for RFS IV in terms of capital spend as well as finishing off of Phase VIII. As we talk about our backlog, you can imagine as we sanction incremental projects, either through the last 2 months of this year or into 2024, most of those projects that potentially could be sanctioned won’t have a very heavy capital spend in 2024.
Most of that capital will be into ’25, ’26 onwards. So I don’t want people to over-index on 2024. I think the comment really was, I think, based on what we see today, we’ll be, either be free cash flow positive or neutral in 2024 based on what we know today. As we sanction new projects, most of that spend will be in ’25 onwards, other than potentially Cedar. Obviously, if we sanction Cedar, there will be some equity contributions into the joint venture in 2024. So it’s really Cedar that might tip 2024 slightly into free cash flow slightly negative. When I say slightly negative, I’m talking $100 million. We’re not talking $600 million. So just to be clear, it’s — we see that as extremely modest. And based on history, it could even go back to positive just based on the timing of spend.
And so when we go out 2025 onwards, we’ll — if we have FID and Cedar, we’ll have a lot more visibility into the future capital spend and then we’ll backfill it with the organic capital. And I want to just go back to Robert Kwan. Free cash flow — being free cash flow positive or neutral is certainly something that we strive to do over the long term, balancing that with what we see as really solid organic good returning projects in the base business.
