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What Tiff Macklem's own words can tell us about the Bank of Canada's incoming governor – Financial Post



In the summer of 2002, the Bank of Canada published an article that described how the institution decides where to set interest rates.

“The key to a successful monetary policy,” wrote Tiff Macklem, then the central bank’s impressive young research chief, “is looking ahead to the most likely outcome and reacting promptly and appropriately to surprises, so that inflation is kept on target or brought back to target over a year or two.”

Macklem, now a distinguished veteran of global finance, will soon have the power to put those words into action, after being tapped by Prime Minister Justin Trudeau to take over as Bank of Canada governor when Stephen Poloz retires early next month.

He will be well prepared for the post. Macklem spent most of a three-decade career in Ottawa at the central bank, climbing to the post of senior deputy governor before departing in 2014 to run the University of Toronto’s Rotman School of Management.

The challenge will be one that no other governor has ever seen, however: Macklem is being tasked with crafting a response to the COVID-19 pandemic and the associated economic fallout. A good indication of how the new governor will steer Canada through one of its greatest crises may be his own words.

Macklem has experience with crises, having served as an associate deputy finance minister during the Great Recession a decade ago.

In an October 2010 speech in Montreal, Macklem’s first after returning to the central bank as senior deputy governor, he noted that the Bank of Canada had successfully calmed investors by offering forward guidance on the path for its key rate, something that has not taken place yet under Poloz.

It is, however, one of the unconventional tools the central bank could still use, in addition to its current large-scale bond-buying program.

“As Canada heads into a period where it will have to deal with an especially weak currency, high levels of debt and the overhang of an economic crisis, some Carney-era-type guidance might be just what the doctor ordered,” said Frances Donald, chief economist at Manulife Investment Management, referring to Mark Carney, Macklem’s former boss at the Bank of Canada.

About four years after he left the bank, the federal government also created the Expert Panel on Sustainable Finance, chaired by Macklem, and which last year turned in a final report with recommendations regarding the Bank of Canada.

The report suggested the central bank help lead efforts to incorporate climate risks in the federal supervision of financial institutions and in encouraging Canadian asset managers to review their “internal climate change competency.”

“We will be looking at climate change, along with a host of other major economic forces acting on the economy, to the extent that they affect inflation,” Macklem told reporters on Friday.

Macklem is well acquainted with the Bank of Canada’s inflation-control target of two per cent, as he contributed to the research that went into the decision to adopt the policy in 1991.

The early reviews of Macklem’s appointment suggest he will not shake up the central-bank’s policy too much, something he reinforced during his introductory press conference.

For example: the prospect of negative interest rates has been floated during the current crisis, but Macklem said he was comfortable with the effective 0.25 per cent floor that the Bank of Canada has settled on.

“There are some disruptive effects of going negative,” Macklem told reporters. “It’s hard to explain to depositors why their deposits are shrinking in their account when they’re not taking any money out. And when you’ve already got a disrupted financial system, you might want to be hesitant about introducing a new source of disruption.”

-with files from Kevin Carmichael

• Email: | Twitter: GeoffZochodne

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Strong medical pot sales help Canopy Growth beat Q1 expectations – Article – BNN – BNN



Canopy Growth Corp. reported fiscal first-quarter results that beat analyst expectations, despite suffering a decline in recreational cannabis sales in Canada due to COVID-19 and increased competition. 

Canopy, the world’s largest cannabis company by market valuation, said that its medical cannabis business outperformed in its three-month period ending June 30, while also seeing revenue gains from its German pharmaceutical subsidiary and its topical cream products.  

Meanwhile, the company’s recreational cannabis business saw an 11-per-cent decline in revenue to $44.2 million as COVID-19 impacted Canopy’s retail operations across the country. Meanwhile, increased competition led to a decline in dried flower market share, the company said. 

The Smiths Falls, Ont.-based company reported first-quarter revenue of $110.4 million, up 22 per cent from the same quarter a year earlier, while posting a loss of $128.3 million, a 34 per cent improvement from last year. 

Analysts expected Canopy to report $98.1 million in revenue in the quarter while posting a loss of $151.3 million, according to Bloomberg.

In a phone interview with BNN Bloomberg, David Klein, Canopy’s chief executive officer, described the past year as being rife with change as the company pursued profitability. 

“We’re going through a process where we’re re-thinking everything,” Klein said. “We’re thinking how we interact with the consumer, how our products leave our facilities and the kinds of products we produce.” 

Canopy’s better-than-expected results end a recent streak of disappointing quarters that were overshadowed by the company’s recent moves to restructure its operations under the guidance of Klein, who formally took on the CEO role in January. Since then, the company shed hundreds of staff over the past several months while announcing it would shut down cultivation operations in Canada and the U.S. to contain spiraling costs. 

Canopy said Monday it reduced its staff count by about 18 per cent from the beginning of the year. The company said it had 4,434 total employees at the end of March, according to recent filings. 

Initial reports from Ontario’s cannabis wholesaler showed Canopy’s share of the recreational pot market has faced pressure from its peers such as Aphria Inc. and Aurora Cannabis Inc. Analysts estimate Canopy has about 15 per cent of the Canadian recreational pot market, down from about 20 per cent from the beginning of the year. 

Canopy executives also shared their plans during a presentation to investors in June to trim the number of products it sells to the recreational market by one-third in order to avoid confusing consumers with too many offerings. They also said that sales were hurt from early April to late May by the COVID-19 pandemic preventing customers from shopping in retail stores as well as lower purchase orders from provincial wholesalers. 

Klein said he’s focused on recovering lost market share by ensuring the company’s products aren’t out of stock and are of high quality, while not overproducing more cannabis in a market already swamped with existing inventories. 

“We’re doing a good job on those things but it didn’t manifest itself in this quarter,” he said. 

Canopy also appears to be in the early days of a broad-based U.S. strategy aimed at securing a top spot in the burgeoning CBD market. The company recently signed NFL all-star Patrick Mahomes to an endorsement deal for its Biosteel sports nutrition subsidiary, launched an online sales portal for its U.S. CBD brand, and restructured its deal to acquire U.S. pot producer Acreage Holdings Inc. once it is federally permissible to do so. 

Klein said the company is moving “as quickly as we can” to expand its U.S. operations under the limitations of only being able to compete in the CBD space. The launch of Canopy’s CBD partnership with lifestyle icon Martha Stewart is expected to happen next month, he added.  

Despite its various woes, Canopy continues to cast an influential shadow over the cannabis sector. The company maintains the largest cash position in the sector with about $2 billion on its balance sheet, unchanged from the prior quarter. 

“While we are concerned with the estimates for Canopy, we do believe the company’s balance sheet strength warrants a premium in the current environment, especially if further Canadian [licensed producers] go bankrupt,” said RBC Capital Markets analyst Douglas Miehm, in a report to clients last month. 

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35 new COVID-19 cases announced in Manitoba Sunday – CTV News Winnipeg



Provincial health officials have identified 35 new cases of COVID-19 in Manitoba.

Dr. Brent Roussin, the province’s chief public health officer, made the announcement on Sunday afternoon.

This brings the province’s total number of lab-confirmed and probable positive cases to 542 since early March.

The current test positivity rate is 1.45 per cent.

The cases are from the following regions:

  • 20 new cases in the Prairie Mountain Health region;
  • 10 new cases in the Southern Health – Santé Sud health region;
  • four new cases in the Winnipeg health region; and
  • one new case in the Interlake-Eastern heath region.

Roussin said seven of the new cases are related to a business in Brandon and most of the cases are related to known clusters. 

“The cases are currently self-isolating and contact tracing is underway,” said Roussin. “At this time there continues to be no evidence of workplace transmission, however, the case investigations are continuing.”

He also noted that some cases are from an unknown source in that area.

“While many of today’s cases appear to be linked to known clusters in Southern Health Region and Western Manitoba, notably Brandon, or are close contacts of previously known cases, preliminary information suggests that there may be a small number of cases with unknown acquisition in these areas and this is what we term as community-based transmission,” Roussin said. 

Six people are in hospital right now due to the virus, three of them in intensive care.

The province has 182 active cases and 352 people have recovered from the virus.

The number of deaths in the province related to COVID-19 remains at eight.

On Saturday, 756 laboratory tests were performed, bringing the total to 100,830 since early February.

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Barrick Gold reports 14% rise in dividend amid soaring gold prices, on track to achieve 2020 production guidance – Kitco NEWS



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(Kitco News) Barrick Gold Corp. (NYSE:GOLD, TSX:GOLD.TO) said on Monday that it increased its Q2 dividend to shareholders by 14% to 8 cents per share, citing robust performance and strong balance sheets amid record-high gold prices. 

The company also noted that its dividend more than doubled since the Barrick-Randgold merger announcement in September 2018. 

“The Board believes that the dividend increase is sustainable and is reflective of the ongoing robust performance of our operations and continued improvement in the strength of our balance sheet, with total liquidity of $6.7 billion, including a cash balance of $3.7 billion as of the end of the second quarter, and no material debt repayments due before 2033,” said Senior executive vice-president and chief financial officer Graham Shuttleworth.

On top of that, Q2 earnings revealed that Barrick is currently on track to achieve its annual production guidance despite the COVID-19 impact. 

Q2 numbers showed year-to-date gold production of 2.4 million ounces, which is right around the mid-point of its 4.6 million to 5 million ounce 2020 guidance, the company said in a press release. That target was lowered back in May, when the company cited a conflict with the Papua New Guinea’s government over the Porgera mine.

The production activity is being largely driven by the Nevada Gold Mines (NGM) in the U.S., Loulo-Gounkoto in Mali, and Kibali in the Democratic Republic of Congo. 

“The operating cash flow exceeded $1 billion for the quarter and free cash flow was $522 million. Net earnings per share was 20 cents. Adjusted net earnings per share was 23 cents, up 44% from Q1 and well ahead of the market consensus, [and] debt net of cash was reduced by almost 25% to $1.4 billion from the end of Q1,” the company said.  

Barrick Gold’s president and chief executive Mark Bristow highlighted strong cash generation, higher gold prices, management’s success, and the company’s skillful handling of the COVID-19 pandemic. 

“Our flattened and decentralized management structure was a major factor in contending with Covid-19 while at the same time continuing to meet short-term targets and making significant progress towards our strategic objectives. Our major projects, including the expansion of Pueblo Viejo, the Goldrush development and the Turquoise Ridge shaft, remain on track. The only exception was Veladero, where the heap leach and cross-border Chilean power line projects were impacted by the Argentine government’s pandemic quarantine restrictions,” Bristow said.

The all-in sustaining costs were up 8.1% to $1,031 an ounce in Q2 from the previous quarter.

Spot gold is up more than 30% since the start of the year as prices breached $2,000 an ounce level and kept hitting new all-time highs last week before retreating on some healthy profit-taking on Friday. 

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