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Food prices drive Canada's inflation rate higher than expected as the price of lettuce skyrockets – Financial Post

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The Canadian dollar gave back some of its earlier gains after the data, trading up 0.1 per cent at 1.3089 to the greenback, or 76.40 U.S. cents.

Headline inflation remains less than half of what it was before the coronavirus pandemic and well below the Bank of Canada’s 2 per cent target, economists noted. Still, two of the three core measures the central bank uses increased.

The common measure, which the Bank says is the best gauge of the economy’s underperformance, gained slightly to 1.6 per cent from 1.5 per cent in September. The CPI trim measure also increased to 1.8 per cent from 1.7 per cent, and the median remained at 1.9 per cent.

“The Bank of Canada has told us they’re not going to hike rates until inflation gets sustainably above their target, and we’re still below their target,” said Doug Porter, chief economists at BMO Capital Markets.

“But in the medium term, the resiliency of core does suggest that the bank may be forced to make a decision earlier than perhaps they thought.”

The Bank of Canada has said it expects interest rates to remain at current record lows into 2023.

© Thomson Reuters 2020

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Canada says U.S. ties could be undermined if Michigan shuts pipeline

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A day before Michigan’s deadline to close down a key crude oil pipeline, Canada on Tuesday issued its strongest remarks so far, saying the move could undermine relations with the United States, its closest ally and trading partner.

Enbridge Inc is preparing for a legal battle with Michigan and courting protests from environmental groups, betting it can ignore the state’s Wednesday deadline to shut down Line 5, which runs under the Straits of Mackinac.

The Canadian government said in a U.S. federal court filing that Michigan had no right to act unilaterally since a 1977 Canada-U.S. pipeline treaty guarantees the free flow of oil between the two nations.

“This case raises concerns regarding the efficacy of the historic framework upon which the U.S.-Canada relationship has been successfully managed for generations,” Ottawa said.

Michigan’s move “threatens to undermine important aspects of that cooperative international relationship”, it added.

The brief said Canada would suffer “massive and

potentially permanent disruption” from a shutdown. Line 5 brings 540,000 barrel-per-day of oil from western Canada to refineries and airports in Ontario, Quebec, Michigan, Ohio and Indiana.

In November, Michigan Governor Gretchen Whitmer gave Enbridge six months to shut down the pipeline that runs four miles (6.4 km) along the bottom of Lake Michigan-Huron, citing fears it could rupture.

The order needs a confirmatory order from a judge to enforce it, and Enbridge and Michigan are disputing whether the issue should be heard in state or U.S. federal court.

The sides are in court-ordered mediation, with the next session scheduled for May 18.

“We will not stop operating the pipeline unless we are ordered by a court or our regulator, which we view as highly unlikely,” Enbridge spokeswoman Tracie Kenyon said in a statement this week.

Joe Comartin, Canada‘s consul general in Detroit who is arguing on behalf of Ottawa, said litigation could drag on until at least 2024.

“I don’t see a court jumping the gun and ordering it closed … until the litigation and constitutional issues are resolved,” he said by phone.

Canada has been lobbying https://www.reuters.com/business/energy/frustrated-canada-presses-white-house-keep-great-lakes-oil-pipeline-open-2021-04-26 Washington officials to keep the pipeline open in what is likely to be an election year in Canada, but the White House has so far not weighed in.

Ontario estimates the city of Sarnia, across the border from Michigan, could lose 5,000 refinery and chemical plant jobs. Industry lobbyists say thousands of U.S. jobs are in danger.

Environmentalists and indigenous groups opposed to Line 5 say the potential job losses are exaggerated. They plan “Evict Enbridge” rallies in Mackinaw City, Michigan, on Wednesday and Thursday.

“We are very hopeful to hear from the governor that there will be accountability measures for operating that pipeline,” said Beth Wallace of the National Wildlife Federation.

Michigan is reviewing what it could do if Enbridge keeps operating past the deadline, said a spokeswoman for the Michigan Attorney General.

Canadian crude market forward prices suggest most traders do not expect Line 5 to shut in coming months, but the lack of certainty is concerning, said one Calgary-based market source.

(Reporting by David Ljunggren and Nia Williams; Editing by David Gregorio and Marguerita Choy)

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Enbridge vows to keep pipeline open, girds for legal fight with Michigan

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Canadian pipeline company Enbridge Inc is squaring off for a legal battle with Michigan and courting protests from environmental groups, betting it can ignore the U.S. state‘s Wednesday deadline to shut its oil pipeline that runs under the Straits of Mackinac.

“We will not stop operating the pipeline unless we are ordered by a court or our regulator, which we view as highly unlikely,” Enbridge spokeswoman Tracie Kenyon said in a statement this week, ahead of Michigan’s deadline for shutting the line.

Line 5 is a link in Enbridge’s network to bring oil exports from western Canada to refineries and airports in Ontario, Quebec, Michigan, Ohio and Indiana. In November, Michigan Governor Gretchen Whitmer gave Enbridge six months to shut down the 540,000 barrel-per-day pipeline that runs four miles along the bottom of Lake Michigan-Huron, citing fears it could rupture and spill.

The state’s order still needs a confirmatory order from a judge to enforce it, and Enbridge and Michigan are disputing whether the issue should be heard in state or U.S. federal court.

The sides are in court-ordered mediation, with the next session scheduled for May 18.

Joe Comartin, Canada‘s consul general in Detroit who is arguing on behalf of the country’s federal government, said litigation could drag on until at least 2024.

“I don’t see a court jumping the gun and ordering it closed … until the litigation and constitutional issues are resolved,” he said in an interview.

The Canadian government has been lobbying officials in Washington to keep the pipeline open in what is likely to be an election year in Canada, but the White House has so far not weighed in on the matter.

The Ontario government estimates that the city of Sarnia, just across the border from Michigan, could lose 5,000 refinery and chemical plant jobs. Industry lobbyists say thousands of jobs are also at risk in the United States.

Environmentalists and indigenous groups opposed to Line 5 say the potential job losses are exaggerated, and are planning “Evict Enbridge” rallies in Mackinaw City, Michigan, on Wednesday and Thursday.

“Past May 12, Enbridge will be operating illegally as per state laws. We are very hopeful to hear from the governor that there will be accountability measures for operating that pipeline,” said Beth Wallace of the National Wildlife Federation.

Michigan is reviewing what remedies would be available to the state if Enbridge keeps operating past the deadline, said Lynsey Mukomel, a spokeswoman for the Michigan Attorney General.

Canadian crude market forward prices suggest most traders do not expect Line 5 to shut in coming months, but the lack of certainty is concerning, said one Calgary-based market source.

“We are looking at all our options and we will leave no stone unturned in defending Canada‘s energy security,” Natural Resources Minister Seamus O’Regan told an emergency parliamentary debate on the pipeline last Thursday.

“We will be ready to intervene strategically at precisely the right moment,” he continued, without giving details.

 

(Reporting by David Ljunggren and Nia Williams; Editing by David Gregorio)

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U.S. State Dept approves potential sale of AEGIS Combat System to Canada

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The U.S. State Department has approved the potential sale to Canada of 4 AEGIS Combat Systems made by Lockheed Martin in a deal valued at up to $1.7 billion, the Pentagon said on Monday.

The Pentagon said the sale of the powerful missile and radar systems to the NATO ally would “significantly improve” network-centric warfare capabilities for U.S. forces operating globally alongside Canada‘s.

AEGIS systems are primarily used aboard ships though they have been adapted for land use.

The package would include four shipsets worth of the AEGIS Combat System and three shipsets of the MK 41 Vertical Launch System as well as support equipment, spares and technical support, the Pentagon said.

The Pentagon’s Defense Security Cooperation Agency notified Congress of the possible sale on Monday.

Despite approval by the State Department, the notification does not indicate that a contract has been signed or that negotiations have concluded.

 

(Reporting by Mike Stone in Washington; editing by Grant McCool)

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