U.S. President Joe Biden has announced a massive infrastructure plan intended to accelerate the transition to clean technology in a sprawling eight-year program that costs $2 trillion.
The plan also touches roads, bridges and broadband access; social policy, like public housing and funding for day care spots; and it raises and rearranges corporate taxes to pay for it.
But at its core, it’s a climate plan.
With the U.S. increasingly unlikely to impose a nationwide carbon tax or cap-and-trade system, Biden’s focus has shifted to spending record sums of public money on next-generation green technology — from 500,000 vehicle charging stations to a zero-carbon power grid to consumer incentives for electric cars and home retrofits.
“It’s not a plan that tinkers around the edges,” Biden said in a Pittsburgh speech Wednesday to promote what he’s calling the American Jobs Plan.
“It’s a once-in-a-generation investment in America — unlike anything we’ve seen or done since we built the Interstate Highway System, and the space race decades ago. In fact, it’s the largest American investment in jobs since World War Two.”
An effort this size will inevitably have effects beyond the U.S., and this one has a number of implications for Canada — some good, some bad and some to be determined.
First comes a caveat typical for any legislation proposed by an American president, and it’s that there’s no guarantee this will ever become law.
A bill hasn’t even been introduced in Congress yet and it already faces stiff Republican opposition, leaving one likely path to success, and it’s the narrowest one imaginable: if Democrats bypass the Senate’s normal 60-vote rule, they could try passing it through a budget process known as reconciliation, and that would require all 51 Democrats in the Senate, progressives and centrists, to unite around the bill.
This process will likely take months. In the meantime, here are some potential effects of the bill.
Economic stimulus hits the neighbourhood
When someone plows $2 trillion into your neighbourhood, the economic effects tend to spill onto your property.
For the neighbourhood of North America, there’s a general rule of thumb, according to Brett House, vice-president and deputy chief economist at Scotiabank: one percentage point of growth in the U.S. economy causes a half per cent increase in Canada.
In other words, enjoy the stimulus, Canada.
“Biden’s stimulus plan will not only benefit the U.S. economy but will also make Canada’s economy great again,” said Derek Holt, vice-president and head of Capital Markets Economics at Scotiabank.
“There will be significant leakage of U.S. stimulus into Canada as [U.S.] businesses and consumers buy more from America’s trading partners regardless of [Buy American rules],” said Holt.
Now, a word about Buy American.
Buy American: reality and rhetoric
There’s bad news for Canadian companies hoping to land some of these big U.S. government contracts.
Buy American provisions are inevitable in this bill.
Biden promised during the election campaign that public contracts under his infrastructure plan would go to U.S. companies — and he doubled down on that Wednesday.
“Not a contract will go out that I control … to a company that is [not] an American company — with American products all the way down the line, and American workers,” he said.
Let’s see the fine print first.
The actual bill hasn’t been introduced yet, and only when we see those details will it become clear whether the reality matches the rhetoric.
For example: Will the bill address existing trade agreements? Under the World Trade Organization agreement on procurement, free trade is guaranteed for some types of public contracts.
There are other question marks.
What about the WTO’s anti-discrimination rules? A skeptical former U.S. trade official suggested it would be a flagrant violation of those provisions for the U.S. government to hand out subsidies for buying only American-made cars.
Then there’s the challenge of disentangling what even counts as an American car, for example, versus a Canadian and Mexican one. Vehicles are built in cross-border supply chains, with pieces regularly moving back and forth.
But make no mistake that Buy American provisions are coming.
Canada’s chief trade negotiator, Steve Verheul, all but conceded this the other day when he said Canada is simply hoping for exemptions for some sectors, like clean energy.
Energy and climate: Good news, bad news
In the meantime, his plan would establish a clean-energy standard for power utilities to meet. This could mean new sales for Canadian hydro and alternative-energy companies.
For the oil sector, the news is less positive.
On the heels of cancelling the Keystone XL pipeline, Biden would scrap an existing credit in the tax code for U.S. companies that produce oil abroad.
One oil industry analyst in Canada, Rory Johnston, expects that to have, at most, a minor impact in the Alberta oilpatch. Not only has American investment there already dropped, but the sums involved in the credit are small.
The U.S. Environmental and Energy Study Institute cites one federal estimate that says ending the policy would be worth $12.7 billion, over 10 years, to all American oil companies operating around the world.
“[That’s a] very, very small amount in the overall scheme of things,” said Johnston, managing director at Toronto-based investment firm Price Street Inc.
But he said it’s yet another symbolic blow to the sector, revealing the political winds shifting against it.
A tilt in tax competitiveness
Could Canadian companies soon find themselves more competitive against their American peers, in terms of tax burdens?
Biden’s plan would raise U.S. corporate taxes seven percentage points, to 28 per cent, undoing some of the Trump-era cuts.
This would bring the U.S. back to its former international ranking: with higher marginal rates than Canada and almost every other developed country.
Jack Mintz, a tax expert and president’s fellow at the University of Calgary, said this is a long-term threat to U.S. companies.
He said they would be hit with a double whammy — first with a tax hike, then with the post-2023 phaseout of writeoffs built into the 2017 law signed by Donald Trump.
“There’s going to be almost a 50 per cent hike on the overall effective tax rate on capital in the United States between those two items,” Mintz said. “It’ll certainly make the U.S. less competitive.”
It’s not clear yet whether this helps investment in Canada, Mintz said. Because there’s another stick built into Biden’s plan — one designed to whack American companies that shift operations abroad.
Biden wants to end some tax exemptions for American companies drawing foreign profits and impose a new minimum international rate of 21 per cent.
Mintz called it a “Trump-like, America First-type strategy.”
Whether or not a U.S. company winds up facing a higher tax burden in Canada than back home will depend on other specifics of the tax code, and we’ll know more once we see the bill.
As for his general economic takeaway on Biden’s proposal, and its effect on Canada, Mintz said: “It’s hard to say whether it will be positive for Canada or not.”
Wall Street’s plant-based love wilts
By Siddharth Cavale and Uday Sampath Kumar
(Reuters) – A cooling of the U.S. stock market’s taste for plant-based meat makers has raised doubts among some investors and analysts about Impossible Foods’ plans to achieve a $10 billion flotation.
Impossible is seeking to go public through an initial public offering or via a merger with a blank-check company within the next 12 months, sources told Reuters this month.
The market value of larger competitor Beyond Meat, however, has sunk from a peak of $14 billion to closer to $8.5 billion and is predicted by several brokerages to fall further.
Both firms carry expectations of being big players in a so-called faux meat market which some predict could be worth $85 billion a year by 2030 as dietary habits shift.
But with retail sales of some products sliding, four sectoral investors told Reuters that Beyond’s 420% rise in value since listing in September 2019 was now seen as overcooked.
“It’s pretty shocking when you see some of these valuations come out,” said Patrick Morris, whose Eat Beyond vehicle has invested in three Canada-listed plant-based ventures.
“The $10 billion for Impossible Foods, with Beyond Meat at $8 or $8.5 billion? The first reaction is that these valuations are coming from outer space,” added Morris, who said he is looking at investing in Impossible if it opens its books.
Some existing investors have told Impossible that it should aim to go public at a valuation below where Beyond is trading, a person familiar with the discussions told Reuters.
Impossible declined to comment.
While the signs remain positive for plant-based food, COVID-19 has halted restaurant sales, and sector studies suggest that the industry has yet to convincingly win over shoppers.
Nevertheless, both Beyond and Impossible have signed deals with major restaurant and grocery chains and the U.S. industry as a whole grew by 44% last year during the pandemic.
Revenues at Beyond and some other producers are growing, but the rate of volume sales growth of fresh and fully cooked plant-based meat alternatives has been declining steadily at U.S. retail stores since July last year, NielsenIQ data shows.
Unit sales growth eased from 32.6% in the July to September period last year to 1% in January to March quarter of 2021, when compared to the same period a year ago, the data showed.
Beyond’s sales overall were still just $407 million last year, and its stock trades at nearly 21 times sales per share, according to Refinitiv data, versus 1.6 times and 1.9 times for Kellogg Co and Kraft Heinz, which last year had sales of $13.78 billion and $26.19 billion respectively.
“Food companies need to trade in a multiple that has some logic to it,” said Christopher Kerr, Chief Investment Officer at Unovis Asset Management, an early investor in Beyond Meat who cashed out and now holds stakes in Oatly and Zero Egg.
“The question is can they get to something that represents market valuation tied to revenues … right now we’re seeing some pretty premium valuations out there,” Kerr added.
Graphic: Beyond Meat market cap – https://fingfx.thomsonreuters.com/gfx/buzz/jznpnandjvl/Beyond%20market%20cap.PNG
One reason for the valuation floated for Impossible is the boom in special-purpose acquisition deals and initial offerings that has seen big jumps for a range of start-ups at launch.
Brian Schaeffer, managing director of private equity trading platform InvestX, which allows investors to trade in pre-IPO companies, said Impossible had been one of the top five traded stocks on the platform since introducing it this year.
“The SPAC trend is super aggressive right now …so those kind of public valuations are being translated into interest on the private platforms,” Schaeffer added.
Some market debuts, however, have not gone as well.
British-based food delivery service Deliveroo flopped on its debut last month.
While Impossible does not publish sales numbers, some industry estimates give it a less than 4% share of the U.S. imitation meat industry, compared with Beyond Meat’s 25%.
Beyond has signed deals with McDonald’s, PepsiCo and KFC and Taco Bell owner Yum Brands while Impossible last year gave up on McDonald’s, citing its inability to supply on the required scale.
Impossible’s burgers and sausages are available at only 20,000 stores globally, versus Beyond’s 122,000 and it is still seeking regulatory approval in Europe and mainland China, where the genetically modified yeast it uses is banned.
“There is so much money (from SPACs) looking for so few places to go, because the space is so new,” Curt Albright, managing member of alternative protein investment firm Clear Current Capital said.
“Whether the valuations are too much or too little, that the market will figure out eventually.”
(Reporting by Siddharth Cavale and Uday Sampath Kumar in Bengaluru; Editing by Patrick Graham and Alexander Smith)
The Art of Finding Work
By Nick Kossovan
Interviews Are Modern Greek Tragedies
Odds are the person interviewing you has a similar story as mine—they developed their interviewing skills “on the job.” Executives and managers are thrust into the recruiting part of their job without first developing skills to evaluate talent.
Outside of human resources, those whose job requires them to assess and interview candidates get little to no training. I never received any formal training regarding how to interview and evaluate a candidate. Yet, I’ve interviewed 1,000’s throughout my career.
I admit I stumbled through my first 150 – 200 interviews. I developed my interviewing skills, a skill I knew would serve me well, on job candidates, which I now admit was unfair to them.
Hiring the right people who’ll fit with the position, team and company can’t be overstated. I keep British-American author Simon Sinek’s words top of mind, “If you hire people just because they can do a job, they’ll work for the money. But if you hire people who believe what you believe, they’ll work for you with blood and sweat and tears.”
Since finding work is seeking approval, I often think of interviews as conduits to modern Greek tragedies.
We spend much of our youth and adulthood seeking approval, trying to “fit in” with the right clothes, car, house, job, etc. We’re constantly aware we’re being judged—a cause of much of why we second-guess ourselves and the stress this causes.
- Am I good enough?
- Do I fit in?
You desperately want to hear, “We want you.”
WARNING: Three interview truths coming.
- When interviewing, everything goes into “the mix”—past hiring mistakes, bias, prejudices, commonalities.
- At the core of every hiring decision is gut feel.
- Likability is the most valuable currency a job seeker has, trumping education, skills, and experience.
When a candidate is sitting in front of me, I’m asking myself:
- Will this person fit in with the current team members and the company’s culture?
- Will this person be seen as a good hire by my boss and peers, and the team? (A bad hire = bad judgment, which is an X against my reputation.)
Acing an interview is extremely hard. Much of your success depends on whom you’re speaking to, and humans are the ultimate moving target. The best you can hope for is to stack the odds in your favour and hope your interviewer is in a good mood.
Keep top of mind: An interview is a sales meeting, and hiring is a business arrangement.
When interviewing, your job is to establish rapport (READ: connection), build trust and achieve the following goals of making the interviewer:
- Believe in you.
- See you as a fit.
You achieve these goals by:
- Clearly demonstrating what value you can bring to the employer. Connect how yourtrack record, which needs to be quantified; otherwise, it’s just your opinion, would be an asset to the employer.
- Presenting yourself as a problem solver. If you look at work holistically, you’ll realize every position within an organization exists to solve a problem(s). How can your experience and skills solve the problem(s) the position you applied to exists to solve?
- Asking good questions. By asking good questions, your interviewer will talk about their pain points. You can then explain (sell yourself) how you’d go about solving their pain point.
Three things worth noting and using as guidance when interviewing:
- An employer will hire you if they’re convinced you’ll bring more value than you cost, therefore offer as much value as possible.
- Problem solvers, those with a proven track record of solving their employer’s pain points, will always be in demand.
- People don’t have short attention spans. They have short interest spans. Make your interviewer interested in you!
There’s no blueprint to guarantee interview success. All you can do is stack the odds in your favour as much as possible. However, there’s one universal interview rule that’ll tip the odds in your favour: Always tell the person sitting across from you what they want to hear. When you develop the ability to read your interviewer and comfortably offer solutions to their pain points, you’ll have developed solid interviewing skills. Such skills will mitigate the number of Greek tragedies you’ll experience while job searching.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers advice on searching for a job. You can send him your questions at email@example.com.
Judge Rules to delay Huawei CFO’s extradition hearings
By Moira Warburton
VANCOUVER (Reuters) – A Canada judge has agreed to delay Huawei Chief Financial Officer Meng Wanzhou’s U.S. extradition hearings for three months, according to a ruling read in court on Wednesday, handing her defense team a win.
Meng, 49, was arrested at Vancouver International Airport on charges of bank fraud in the United States for allegedly misleading HSBC about Huawei’s business dealings in Iran, causing the bank to break U.S. sanctions.
Meng’s team had asked for more time to review additional documents that became available after HSBC and Huawei reached a settlement in Hong Kong. Extradition hearings were originally set to wrap up in May.
Defense attorney Richard Peck argued in court on Monday that they were requesting “a modest frame of time” to be able to read the documents and potentially file them as evidence in the British Columbia Supreme Court.
Lawyers representing the attorney general of Canada had fought the adjournment of hearings set to start on Monday, arguing that Meng’s team had been given more time than was usual in an extradition to make their case, and the contents of the documents were too redacted to be relied upon as significant to the case.
“The outstanding feature of this application is that it’s based on speculation,” prosecutor Robert Frater said on Monday.
But Associate Chief Justice Heather Holmes disagreed, siding with the defense in granting an adjournment.
Her reasons will be read out on in court on April 28.
(Reporting by Moira Warburton in Vancouver; Editing by Chris Reese and Marguerita Choy)
Bank of Canada signals rate hike in 2022, tapers bond purchases
Wall Street’s plant-based love wilts
Movie theaters face uncertain future
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Europe kicks off vaccination programs | All media content | DW | 27.12.2020 – Deutsche Welle
Economy8 hours ago
Pandemic fears send stocks, oil, yields lower
Politics6 hours ago
Biden offers tax credits for COVID-19 vaccination and paid time off
Health8 hours ago
Toronto close some workplaces amid COVID-19 surge
Sports7 hours ago
Ice hockey-Women’s world championships cancelled due to COVID-19
Economy9 hours ago
Canadian dollar sees biggest drop in nearly two months as oil falls
News9 hours ago
Canada-U.S. land border restrictions, hotel quarantine extended
Sports6 hours ago
Rafael Nadal rallies from set down to advance in Barcelona
News8 hours ago
U.S. to set aside 6,000 guest worker visas for Central Americans