Additional rate cut may be necessary if US-China trade war persists - Canadanewsmedia
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Additional rate cut may be necessary if US-China trade war persists

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An additional interest rate cut may be necessary if the ongoing trade war between the U.S. and China persists, former top Federal Reserve official Donald Kohn told CNBC on Thursday.

The rate cut would act as a sort-of “cushion” for the U.S. economy as the trade dispute weighs on business and consumer confidence, the former vice chairman of the Federal Reserve Board said in a interview with “Closing Bell. ”

U.S. stocks closed sharply lower Thursday after President Donald Trump said the U.S. would impose 10% tariff on another $300 billion worth of Chinese goods, effective Sept. 1. Trump’s announcement, made via Twitter, ratcheted up a trade fight that has carried on for more than year and a half.

A day before, the Fed, as expected, cut rates for the first time in more than a decade. Fed Chairman Jerome Powell later suggested that trade tensions influenced the decision on rates.

Kohn, who was vice chairman between 2006 and 2010, agreed with the Fed’s decision to cut rates. Kohn said Thursday that as a central bank official, he believed part of his responsibility was to provide the U.S. economy “some cushion and offsets” to “shocks that came from other places.”

“In a situation like this, it seemed to me there was very little cost to lowering interest rates,” said Kohn, who is now a senior fellow at the Brookings Institution.

As of Thursday evening, the market sees an 81% probability that there will be a rate cut at the Fed’s September meeting, according to the CME FedWatch tool.

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Trade mission seeks to calm concerns about forestry downturn

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Forests Minister Doug Donaldson says he’s in Asia trying to calm investor concerns about reduced supplies of British Columbia timber for major residential developments and tourism-resort projects in China and Japan.

Donaldson, in a teleconference from Tokyo, says he and 35 senior executives from B.C. forest companies and associations are on a five-day trade mission to Asia that concludes Friday.

He says the Chinese and Japanese are keenly aware of the toll pine beetle infestations and massive wildfires have taken on B.C.’s forests, but business leaders and forests ministry officials are reassuring potential customers the province has abundant supplies of timber.

The Opposition Liberals recently released a document detailing ongoing forest industry struggles, listing almost 60 examples where companies have implemented cost-cutting measures that range from harvest reductions to permanent mill closures.

The detention of top Huawei executive Meng Wanzhou in Canada prompted the minister to postpone his planned participation on a forestry trade mission to China last December.

Donaldson says this week’s trade talks in Japan and China focused only on business.

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Union representing SkyTrain workers considers possible strike action

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SkyTrain in Vancouver/Shutterstock

CUPE Local 7000, the union representing 900 SkyTrain workers, says negotiations with the BC Rapid Transit Company (SkyTrain) have reached a deadlock.

CUPE Local 7000 says that there have been more than 40 sessions at the bargaining table since the beginning of May, and that talks broke down Tuesday, Nov. 12. It says that both sides were unable to reach an agreement on several key issues.

“The Company has failed to offer fair wages or address the sick plan, inadequate staffing levels, forced overtime, and other issues important to our members,” said CUPE 7000 President Tony Rebelo.

“We have been more than proactive and flexible in trying to reach solutions to improve the service, but the employer’s latest package failed to address the key issues. They are simply not interested in bargaining seriously, so we’re left with little choice but to go to our members and seek direction for next steps.”

CUPE 7000 represents approximately 900 SkyTrain workers who provide service as SkyTrain attendants and control operators as well as administration, maintenance, and technical staff.

Vancouver Is Awesome reached out to TransLink for comment and will update the story when they have provided comment.

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U of T names Michael Sabia director of the Munk School of Global Affairs & Public Policy

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Michael Sabia, one of the country’s most accomplished leaders in business, investment and public policy, has been named the new director of the University of Toronto’s Munk School of Global Affairs & Public Policy.

The university’s Agenda Committee of Academic Board recently approved the appointment of Sabia, who is currently CEO of pension fund Caisse de dépôt et placement du Québec (CDPQ), which has more than $325 billion of assets invested globally, for a five-year term beginning Feb. 1, 2020.

A U of T alumnus, Sabia will draw on his considerable experience in both the public and private sectors – he once ran Canada’s biggest telecom and helped privatize its largest railway – to help realize the Munk School’s growing ambitions in Canada and on the global stage.

“CDPQ is now a global financial institution with investments around the world. Over the last decade, we have had to navigate through an increasingly complex and turbulent geopolitical scene,” Sabia said.

“With the lessons learned and the global relationships built, I am looking forward to working with the scholars, students and staff at the Munk School to continue building an institution engaged in the world and widely admired around the globe for the quality of its ideas and its practical solutions to the issues facing us all.”

The Munk School, created through a merger last year of the Munk School of Global Affairs and the School of Public Policy & Governance, is a leading hub for interdisciplinary research, teaching and public engagement that houses world-class researchers and more than 50 academic centres, labs and programs.

It’s also home to 20 teaching programs, including Munk One – a first-year foundational program that focuses on global problem-solving.

Sabia will take over the role of director of the Munk School from Professor Randall Hansen, who is currently serving as interim director.

“I’m delighted to welcome Michael Sabia back to the university as the Munk School’s new director,” said President Meric Gertler. “Throughout his career, he has made significant contributions to public policy, to business and to the world of investment. I know he will bring the same kind of engaged thought leadership to the school.

“I would also like to thank Professor Hansen for his excellent leadership and guidance at the school. His work has helped set the stage for future success.”

Sabia, who earned a bachelor’s degree in political economy from U of T before completing two graduate degrees at Yale University, took over the role of chief executive at CDPQ in 2009 and proceeded to build the organization into a global financial institution with more than $325 billion in assets under management.

He also oversaw the implementation of a new investment strategy that made CDPQ an internationally recognized leader among investors working to address climate change, develop urban infrastructure and forge global industry partnerships.

Before that, Sabia held several senior positions at Bell Canada parent BCE Inc., including the role of CEO from 2002 to 2008 when he led a strategic transformation of the telecommunications giant. He also served as chief financial officer at Canadian National Railway, where he worked with then-CEO Paul Tellier to successfully launch CN as a publicly traded corporation through what was then the largest-ever initial public offering in Canadian history.

Sabia spent several years in the public service prior to entering the corporate world. He was director general of tax policy in the federal department of finance, where he was one of the architects of a comprehensive reform of Canada’s tax system, and served as deputy secretary in the Privy Council Office.

More recently, Sabia served on Finance Minister Bill Morneau’s advisory council on economic growth. He is currently co-chair of the G7 Investor Leadership Network on Climate Change, Diversity and Infrastructure Development, as well as co-chair of long-term investment, infrastructure and development for the World Economic Forum.

In addition, Sabia is a trustee of the Foreign Policy Association of New York and a member of the Asia-Pacific Foundation of Canada’s Asia Business Leaders Advisory Council. He was named an Officer of the Order of Canada two years ago, and has received an award from the non-profit Public Policy Forum for his many contributions to public policy in Canada.

President Gertler said Faculty of Arts & Science Dean Melanie Woodin, Vice-President and Provost Cheryl Regehr and he have asked Sabia “to lead a consultative process within the university to determine whether establishing the Munk School as a free-standing faculty would be a constructive step forward.”

“I’m immensely proud of everything that has been accomplished at the Munk School so far,” President Gertler said.

“With the invaluable financial and ongoing commitment of the Munk family and other generous donors, and with the dedication of the school’s first-class faculty and staff, I am confident of our continued success.”

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