Canadian manufacturing sales top expectations, gain 1.1% in June

Canadian manufacturing sales top expectations, gain 1.1% in June

Canadian manufacturing sales rose more than expected in June, boosted by a 16 per cent surge in oil and coal shipments.

Statistics Canada said Thursday manufacturing sales were up 1.1 per cent to $58.1 billion in June, following a 1.5 per cent increase in May.

Economists had expected an increase of 0.9 per cent in June, according to Thomson Reuters Eikon.

In constant dollars, manufacturing sales were up 0.7 per cent in June.

“Coupled with other better recent economic data — and absent an unexpected shock — the economic backdrop still looks strong enough to warrant further gradual interest rate hikes from the Bank of Canada,” Royal Bank senior economist Nathan Janzen wrote in a brief note to clients.

Last week, Statistics Canada reported the economy generated 54,100 net new jobs in July and saw its unemployment rate fall back to its four-decade low of 5.8 per cent. And earlier this month, data showed surging exports led by higher-priced energy products allowed Canada to shrug off new U.S. steel and aluminum tariffs in June to post the lowest monthly merchandise trade deficit with the world in 17 months.

Many economists expect Canada’s central bank to raise interest rates at least one more time this year.

The Bank of Canada raised its trend-setting interest rate by a quarter of a percentage point to 1.5 per cent earlier this summer. Its key interest rate target is now at its highest point since December 2008.

The increase in factory sales came as the petroleum and coal products industry sales increased 15.9 per cent in June.

Statistics Canada said several major refineries ramped up production levels following temporary shutdowns and spring maintenance that began in April and continued into May.

Capacity utilization rates for the industry rose from 69.8 per cent in May to 89.8 per cent in June.

The gains in the petroleum and coal group was offset in part by a drop in chemical products which fell 4.5 per cent in June as sales of pesticides, fertilizers and other agricultural chemical products dropped.

Sales of food products fell 1.7 per cent in June following four consecutive monthly gains.

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NEB allows Trans Mountain to begin construction on parts of pipeline expansion

NEB allows Trans Mountain to begin construction on parts of pipeline expansion

The National Energy Board says Trans Mountain Pipeline ULC can start construction on sections of its pipeline expansion in Alberta and British Columbia.

The NEB says in a statement that Trans Mountain has met all applicable pre-construction condition requirements for so-called segments one to four from the Edmonton terminal to its Darfield pump station near Kamloops, B.C.

The board says it has approved more than 96 per cent of the detailed route for these pipeline segments.

The NEB says Trans Mountain can begin construction, including clearing right of way — subject to other government permits and regulations.

It says two active hearings remain for these segments and construction for work that relates to the hearings is not permitted while they’re pending.

The NEB says 72 per cent of the entire detailed route has been approved for the pipeline, and hearings for the final segment are scheduled to begin in Chilliwack, B.C., in October.

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Tesla sues Ontario government, alleging customers denied incentives

Tesla sues Ontario government, alleging customers denied incentives

Tesla Motors Canada is suing the Ontario government, alleging it has suffered “substantial harm” and lost sales amid the cancellation of an electric vehicle rebate. 

In mid-July, Ontario Premier Doug Ford scrapped the province’s Electric and Hydrogen Vehicle Incentive Program (EHVIP), which was brought in by the previous Liberal government. The program offered rebates of up to $14,000 on qualifying vehicles, so long as they were under $75,000. 

When it cancelled the EHVIP, the province promised to honour the incentive for those who have their vehicle delivered, registered and plated if it was purchased from a dealer before Sept. 10. However, the province said the incentive would end immediately for those who ordered their vehicle directly from the manufacturer.

In its lawsuit, filed with the Ontario Superior Court of Justice, Tesla Canada — which says it is an Ontario-licensed dealer — says its customers no longer qualify for an incentive, unlike those buying electric vehicles from other companies.

Tesla Canada argues the government “deliberately and arbitrarily” excluded its customers, while providing no warning or the chance to offer any input.

“The Minister of Transportation’s decision suddenly left hundreds of Tesla Canada’s Ontario customers in the unfair position of no longer being eligible for the rebate they had expected to receive when they ordered their vehicles,” the lawsuit states.

“While purchasers of other brands and from other dealers will still receive the rebate during the transition period.”

A spokesperson for the Ministry of Transportation said it is aware of the application for judicial review.

“As this matter is before the courts, it would be inappropriate to comment,” said Bob Nichols in an email to CBC Toronto.

Seeking urgent action

The lawsuit claims on July 11 the original language surrounding the transition plan included Tesla Canada.

However, it claims the Ministry of Transportation later changed the wording to “expressly exclude Tesla Canada and its customers from the transition plan.”

Those buying electric vehicles from BMW, Audi, Fiat-Chrysler, Ford, General Motors, Hyundai, Kia, Nissan and Volkswagen are unaffected during the transition period, the lawsuit alleges.

Tesla Canada is asking for the lawsuit to be heard urgently.

It’s unclear how much the company is seeking, but the lawsuit warns every day the transition plan continues with Tesla excluded, “the unquantifiable and irreparable harm grows.”

Funded by cap-and-trade

CBC Toronto has spoken with a number of Tesla customers who have missed out on the $14,000 rebate and paid for home charging stations.

The EHVIP program was funded in large part by the profits from Ontario’s cap-and-trade program, which Ford’s government also abandoned this summer. The program set a price on carbon emissions for big polluters.

Ford’s government has said cancelling cap-and-trade will help it achieve its goal of bringing gas prices down by 10 cents a litre and cutting costs for Ontarians by $1.9 billion per year.

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Airbnb’s federal budget proposal tells Liberals: ‘We want to be regulated’

Airbnb's federal budget proposal tells Liberals: 'We want to be regulated'

One of the world’s largest short-term rental websites is inviting the Trudeau Liberals to create a regulatory regime for the burgeoning industry — something its critics have long advocated and raising pressure on the government to set rules in the market.

Airbnb’s budget proposal to the House of Commons finance committee asks the federal Liberals to avoid forcing “old and outdated rules” for traditional hotels onto Airbnb hosts, pushing instead for a simple-to-understand regime.

In its five-page submission, the company bluntly says: “We want to be regulated” — a step beyond last year’s request for the government to apply a “light” regulatory touch.

“We think as a platform our hosts should pay taxes. I know people get shocked when we say that, but we do. We think we should be contributing,” Alex Dagg, Airbnb’s public policy manager in Canada, said in an interview.

“We just need to figure out what are the appropriate rules in place to do that and how can we facilitate that.”

The submission leaves the Liberals with mounting requests and offers from online service providers themselves to set some regulations around their work, including applying sales taxes, all of which the government has thus far shied away from.

Quebec, British Columbia and a handful of cities have enacted rules and struck deals to get tax revenues from bookings on Airbnb, which is one of the few services of its kind to negotiate tax agreements with Canadian governments. Quebec’s deal netted the province about $2.8 million over the first six months of the tax agreement.

Taxing online service providers

In April, a Liberal-dominated Commons committee urged Ottawa to make online service providers based outside the country collect and remit sales taxes as part of a series of recommendations to help Canada’s small businesses compete online.

In late May, the national broadcast regulator released a report calling on the federal government to pry more commitments — monetary or otherwise — from online streaming giants like Netflix and Spotify and consider new internet levies to fund Canadian content.

Federal officials have told groups that they are looking at how to tax and regulate online service providers, but don’t seem to have a clear idea of how to do it.

The Hotel Association of Canada said Thursday the Liberals should require online businesses to also hand over detailed information on all home-renting activity so tax authorities have a list of all short-term rental hosts and can force those with high earnings to pay taxes like hotel chains.

The industry group argued it wasn’t interested in targeting the casual home owner who rents out a room or unit for a few nights a year, instead putting a bull’s-eye on hosts who rent out multiple homes or units for months on end as part of a larger commercial operation.

“We are not against Airbnb and we’re not against the competition. Competition is, in fact, a good thing. What we’re looking for here is fairness and a level playing field,” said Alana Baker, the association’s director of government relations.

Airbnb says there are some 80,000 people who offer places to rent in Canada, and they earn on average about $5,500 annually.

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Air Canada exec to become new CEO of Air France-KLM

Air Canada exec reportedly on board as Air France CEO would face labour headwinds

Air Canada chief operating officer Ben smith will leave the company to become the chief executive at Air France-KLM.

Air Canada confirmed that Smith will resign his position with the company effective August 31. Air Canada said Smith was leaving to become CEO at a “European-based global airline.”

“We wish Ben well in his future endeavours and congratulate him on his appointment,” Air Canada president and CEO Calin Rovinescu said in a release.

Smith began working for Air Canada in 2002, joined the ranks of its executive management in 2007, and became COO in 2014.

Air France-KLM’s board of directors said Smith will take over his new role by Sept. 30.

Smith becomes the first non-French top executive in Air France’s history.

“I am well aware of the competitive challenges the Air France-KLM Group is currently facing and I am convinced that the airlines’ teams have all the strengths to succeed in the global airline market,” Smith said in a release.

He is replacing Jean-Marc Janaillac, who quit as CEO of Air France-KLM in May after staff rejected his offer of a pay deal aimed at stopping a wave of strikes.

Smith could face a rough reception from the company’s employees. Unions representing pilots and ground staff both offered critical comments earlier this week before Smith’s appointment was confirmed. Unions are also reported to be considering whether to begin more strikes on Aug. 27.

According to a report from Reuters, Smith will have a challenge in renegotiating Air France labour contracts to cut costs.

“It’s going to be a tough job,” James Halstead, a consultant at U.K.-based Aviation Strategy, told the news agency.

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Second Cup shares rise on news it may convert some Ont. outlets to cannabis shops

Second Cup shares rise on news it may convert some Ont. outlets to cannabis shops

Shares of Second Cup gained eight per cent on Thursday, a day after the coffee chain said it was eyeing converting some of its Ontario outlets to cannabis shops.

Second Cup shares were higher by 22 cents to $2.94 in afternoon trading on the Toronto Stock Exchange

On Wednesday, after stock markets had closed for the day, Second Cup and its partner, National Access Cannabis Corp.(NAC), said they are actively looking at Second Cup shops that might be changed to cannabis retail stores that would run under the name Meta Cannabis Supply Co. 

Second Cup says it has more than 130 coffee outlets in Ontario.

The announcement from Second Cup came after Ontario’s Progressive Conservative government said earlier in the week that it was dropping the former Liberal government’s plan to sell cannabis through government-run stores in favour of letting private companies do it. 

The Ontario government said it plans to launch a provincially-run online cannabis store for the legalization of recreational pot on October 17. The province said privately run physical cannabis stores will open in April 2019.

Second Cup and NAC had originally planned to set up a network of NAC-branded and operated recreational cannabis stores in provinces where it was legally permitting. However, in light of the change of direction in Ontario, the two firms announced the shift in their plans.

Garry Macdonald, Second Cup’s president and CEO said the agreement with NAC allows his company to leverage its real estate assets “to increase value for our franchisee partners and our shareholders while maintaining focus on our primary objective of being the specialty coffee brand of choice across Canada.”

Besides working with Second Cup in Ontario, NAC has plans to open of 50 to 70 Meta retail stores in Manitoba, Alberta and British Columbia this year.

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Tim Hortons looks to tackle leaky lids

Tim Hortons looks to tackle leaky lids

Tim Hortons admits it’s fallen behind the competition with its packaging, but change is coming to your coffee cup and it will start with the lid.

Executives from the fast food giant tell The Canadian Press the company has been using the same lids for 20 years despite consumer complaints that they leak.

Tim Hortons President Alex Macedo says the brand is piloting new, more environmentally-friendly packaging at six locations featuring lids that can be properly closed that sport a maple leaf design.

He says the brand was slow to change the lids because the company has long been a leader in the coffee space and many franchisees figured that a redesign wasn’t worth the effort.

In addition to the lid, Macedo says the company will be launching a new marketing plan later this year that is based around true stories related to Tim Hortons.

Early advertising will include stories about a hearing-impaired girl who had to write her order on the company’s fogged up glass display until a Tim Hortons employee learned sign language to communicate with her, as well as an unlikely Kenyan hockey team that has embraced the brand and is coming to Canada to play with NHL stars.

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U.S. judge orders Keystone XL pipeline review in setback for Trump

U.S. judge orders Keystone XL pipeline review in setback for Trump

A federal judge in Montana on Wednesday ordered the U.S. State Department to do a full environmental review of a revised route for the Keystone XL crude oil pipeline, a move that could delay the project and prove a setback for the Trump administration.

For more than a decade, environmentalists, tribal groups, and ranchers have fought the $8-billion US, 1,900-km pipeline to carry heavy crude to Steele City in Nebraska from Canada’s oilsands in Alberta.

U.S. District Court Judge Brian Morris ruled for the Indigenous Environmental Network and other plaintiffs, ordering the review of a revised pipeline route through Nebraska to supplement one the department did on the original path in 2014.

In his ruling, Morris said the State Department was obligated to “analyze new information relevant to the environmental impacts of its decision” to issue a permit for the pipeline last year.

No comments

Supporting the project are Canadian oil producers, who face price discounts over transport bottlenecks, and U.S. oil interests and pipeline builders.

TransCanada Corp, which wants to build Keystone XL, did not immediately respond to a request for comment on the ruling. It hopes to start preliminary work in Montana in coming months and begin construction in the second quarter of 2019.

The White House did not immediately respond to a request for comment, nor did the State Department.

The ruling was “a rejection of the Trump administration’s attempt to flout the law and force Keystone XL on the American people,” said Jackie Prange, a lawyer for the Natural Resources Defence Council, an environmental group.

Pipeline politics

In 2015, then-president Barack Obama, a Democrat, rejected the pipeline, saying it would add to emissions that cause climate change and would mostly benefit Canadians.

President Donald Trump, a Republican, pushed to approve the pipeline soon after he took office. A State Department official signed a so-called presidential permit in 2017 allowing the line to move forward.

However, Morris declined the plaintiff’s request to vacate that permit, which was based on the 2014 review.

Last year, Nebraska regulators approved an alternative route for the pipeline which will cost TransCanada millions of dollars more than the original path.

In a draft environmental assessment last month, the State Department said Keystone XL would cause no major harm to water supplies or wildlife. That review is less wide-ranging than the full environmental impact statement Morris ordered. 

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Vice Media signs long term content deal with Bell

Vice Media signs long term content deal with Bell

Bell Media has signed a new long-term agreement that will see it become the exclusive Canadian broadcaster for new programming from Vice Media network Viceland.

Financial terms of the deal were not immediately available.

The companies say the shows will debut on multiple Bell Media platforms, including CraveTV, in the fall.

They say new Vice shows will exclusively air on television on Bell Media channels, while it has also acquired the rights to more than 650 hours of Vice library programming.

Bell Media and Vice will also explore co-production opportunities.

The deal follows the end of a deal between Rogers Media Inc. and Vice earlier this year.

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Turkey boosts tariffs on some U.S. products, more than doubling them on cars and alcohol

Turkey boosts tariffs on some U.S. products, more than doubling them on cars and alcohol

Turkey is boosting tariffs on imports of certain U.S. products, including rice, cars, alcohol, coal and cosmetics — escalating a feud with the United States that has helped trigger a currency crisis.

Tariffs are more than doubling for American cars and alcohol, for instance, to 120 per cent and 140 per cent, respectively. 

“Turkey does not favour an economic war, but it cannot remain unresponsive when it is attacked,” said Ibrahim Kalin, a spokesperson for President Recep Tayyip Erdogan.

Tariffs have been imposed on 22 types of produce and goods imported from the United States, amounting to $533 million US of extra duties, according to a report in the state-run Anadolu Agency, quoting Rushar Pekcan, the country’s trade minister.

Pekcan said, according to the report, “the United States is an important trading partner, but it is not our only partner. We have other partners and alternative markets.”

She said Turkey would continue to “protect the rights of Turkish companies and retaliate” against unjust actions by the United States.

U.S. President Donald Trump and Erdogan, seen on July 11, have appeared to get on well personally, but the NATO allies have several areas of economic and political conflict. (Geert Vanden Wijngaert/Associated Press)

The tariffs come a day after Erdogan said Turkey would boycott U.S. electronic goods, singling out iPhones. He suggested Turks would buy local or Korean-made Samsung phones instead, although it was unclear how he intended to enforce the boycott.

The Turkish lira has dropped to record lows in recent weeks, having fallen some 42 per cent this year. It recovered a bit, by four per cent to around 6.12 lira per U.S. dollar Wednesday, after the government took steps to shore up the currency by reducing the daily limit in bank foreign currency swap transactions.

Looks to re-emphasize European ties

Also helping the Turkish currency were moves by Turkey to gain favour with European countries.

It decided to release two Greek soldiers from prison on Tuesday. On Wednesday, Turkey then freed Amnesty International’s honorary chairman for Turkey, Taner Kilic, from prison pending the outcome of his trial on terror charges. And Erdogan held a phone call with German Chancellor Angela Merkel and planned to speak Thursday with France’s Emmanuel Macron.

Turkey also announced Wednesday that it had received $15 billion of direct investments from Qatar, a country facing its own economic hurdles after being subjected to a blockade last year led by Saudi Arabia.

Fundamental concerns about the Turkish economy persist, however.

Investors are worried that about Erdogan’s control over the central bank and his pressure to keep it from raising interest rates. Higher rates would slow economic growth, which he wants to egg on, but are urgently needed to support the currency and tame inflation, experts say.

The currency drop is particularly painful for Turkey because it has accumulated a high debt in foreign currencies.

Attention will turn Thursday to an address by the finance minister to foreign investors for clues on any change in economic policy.

Erdogan has reacted to the financial instability by blaming foreign powers, in particularly the United States, a longtime NATO ally, which he says is waging an “economic war” as part of a plot to harm Turkey.

American pastor remains under house arrest

Washington has imposed financial sanctions on two Turkish ministers and doubled steel and aluminum tariffs on Turkey, as U.S. President Donald Trump tries to secure the release of Andrew Brunson, a 50-year-old American pastor being tried in Turkey on espionage and terrorism-related charges.

On Wednesday, a court rejected an appeal for Brunson’s release from detention and for a travel ban against him to be lifted, the state-run Anadolu Agency reported. A higher court was however, was scheduled to review the appeal, the agency said.

Andrew Craig Brunson, an evangelical pastor from Black Mountain, N.C., arrives at his house in Izmir, Turkey, on July 25. Brunson has lived in Turkey for 23 years, but his case has been taken up as a cause for the U.S. government. (Emre Tazegul/Associated Press)

Although he was released to home detention, Brunson faces a prison sentence of up to 35 years if he is convicted on both counts at the end of his ongoing trial.

The evangelical pastor, who is originally from Black Mountain, N.C., has lived in Turkey for 23 years and led the Izmir Resurrection Church.

Kalin called on the United States to respect legal process in Turkey in reference to the American pastor’s continued detention.

Trump in his first year in office expressed admiration for Erdogan and even congratulated the Turkish leader after a victory in a controversial referendum, but relations between the two countries have been increasingly fraught.

For its part, Turkey would like to see the extradition of Fethullah Gulen, who now lives in Pennsylvania. Erdogan’s government has blamed followers of the cleric Gulen for an unsuccessful 2016 coup, leading to a purge of thousands of people from Turkey’s civil service, police, military and media and educational institutions, with many of them jailed.

Turkey has also been publicly critical of criminal prosecutions in the U.S. involving state-run Halkbank official Mehmet Hakan Atilla, as well as Reza Zarrab, a Turkish-Iranian gold trader.

The two countries have also been in conflict in Syria’s war. Turkey has urged the U.S. to halt its support for Kurdish YPG fighters or risk confronting Turkish forces on the ground in Syria.

Turkey considers the group linked to the Kurdistan Workers Party (PKK) it bans at home, with the Americans using the fighters in its efforts to root out Islamic State in Iraq and Syria (ISIS) militants.

Also on the military front, Turkey’s purchase of Russia’s S-400 missile defence system has irked the U.S. and other alliance members in NATO.

With files from CBC News

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