An emerging trade irritant between Canada and the United States that had been quietly simmering for months has now bubbled into the open.
The Canadian government sent a letter to nearly a dozen senior U.S. officials Friday expressing dismay over an idea being considered in a key American budget bill.
As reported last week by CBC News, Canadian officials have been concerned about a Buy American-type proposal they fear might disrupt the auto sector.
Now Ottawa has put those views in writing to the congressional leadership from both parties, other key members of Congress and two cabinet-level officials.
Minister of International Trade Mary Ng, seen at a conference last year, sent a letter outlining concerns about an idea being considered in a key American budget bill to nearly a dozen senior U.S. officials. (Justin Tang/CP)
‘Very serious concerns’
The letter from Canada’s International Trade Minister Mary Ng expressed several worries — of a historic decline in Canada-U.S. auto co-operation; tens of thousands of lost Canadian jobs; and collateral damage to those U.S. auto workers involved in the cross-border auto trade.
“I am writing to convey Canada’s very serious concerns,” said Ng in the letter.
“This proposal would undermine decades of United States-Canada co-operation to foster a mutually beneficial integrated automotive production and supply chain. …
“If passed into law, these credits would have a major adverse impact on the future of [electric vehicle] and automotive production in Canada, resulting in the risk of severe economic harm and tens of thousands of job losses in one of Canada’s largest manufacturing sectors. U.S. companies and workers would not be isolated from these impacts.”
At issue is the massive budget bill that forms the heart of U.S. President Joe Biden’s domestic agenda.
U.S. Senator Debbie Stabenow, seen here last month, is one of the Michigan Democrats pushing the tax plan. (Elizabeth Frantz/Reuters)
Electric vehicle credits worry Ottawa
Democrats are hoping to hammer out a deal among themselves to pass a bill with around $2 trillion in initiatives on climate change, child care, parental leave and health care.
They want an agreement soon — before Biden heads to the Glasgow climate summit that’s set to start on Oct. 31 — and they want to have legislative progress they can show voters before a batch of state-level elections on Nov. 2.
One of the major climate provisions being contemplated involves incentives for the purchase of electric vehicles.
Under different proposals in the House of Representatives and the Senate, the Democrats would offer $12,500 in tax credits for people who buy an electric vehicle.
What has irked Ottawa and Canada’s auto sector are provisions that would reserve parts of that credit strictly for vehicles assembled in the U.S.
In five years, the entire $12,500 credit would apply only to U.S.-assembled cars.
What worries Ottawa most is the timing: Companies are now making investment decisions about where to build electric vehicles and they fear this tax credit might steer investors out of Canada.
Canada recently saw a gusher of investment in the construction of electric vehicles, including some announced by Prime Minister Justin Trudeau at a Ford facility in Ontario last year. Some observers say those investments could dry up if the U.S. tax plans pass. (Sean Kilpatrick/CP)
Possibility of trade retaliation
Ng’s letter hints at the possibility of trade retaliation. It says the proposal violates U.S. commitments under the new North American trade agreement and under World Trade Organization rules.
She also says it runs counter to U.S. commitments to work with Canada to develop electric vehicles and the mining of critical minerals used to build them.
The reason so much of the president’s agenda is riding on this one bill is that budget legislation has the best chance of passing Congress.
Budget bills can get through the Senate on a simple majority vote through a process known as reconciliation and this omnibus package could become law once all Democrats vote for it.
Ng’s letter was sent to the leaders of the House of Representatives and Senate, Nancy Pelosi and Chuck Schumer, as well as the top Republicans in both chambers, the heads of key committees, and Biden’s trade and commerce secretaries.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
