Howdy, Calgary-based correspondent Geoffrey Morgan bringing you up to speed on the day’s top business stories. First, the appetizer: The Canadian dollar – on a wild ride since U.S. President Donald Trump first threatened tariffs on imported steel and aluminum – fell roughly 1 per cent to 77 cents US, while West Texas Intermediate oil prices also fell by 1 per cent to US$60.91 per barrel and S&P/TSX Composite Index inched upward a quarter of a per cent. Now, the main dish…
A fight could break out between farmers and a coalition of seven business associations, which are demanding the government not intervene in the rail industry by forcing the railways to move a glut of grain stored on the Prairies. Jesse Snyder reports on a letter sent to Transportation Minister Marc Garneau saying that if Ottawa forces the railways to move grain, shipments of lumber, fertilizer and mined commodities will suffer.
Quote: “A singular emphasis on grain has the unintended but inevitable consequence of exacerbating rail service issues for other commodity sectors, skewing the railways’ allocation of scarce capacity resources toward the movement of grain,” the letter said.
Falling in Love
Alberta learned a harsh lesson that investments in carbon capture and storage technology is a highly expensive way to reduce emissions. Geoffrey Morgan, yours truly, finds that hasn’t prevented other jurisdictions from repeating the province’s mistakes and major oil producers like Shell and BP are falling in love with the technology once again.
Quote: “Using CCS to delay the shut down of coal is ultimately not going to be cost-effective in the long run,” said Pembina Institute policy analyst Jason Switzer. “I would think the answer is that solutions are coming on the generation side (like renewables) and in power storage.”
Costco is exploring ways to deliver fresh groceries directly to Canadians after finding early success with its online food delivery service in the U.S., Hollie Shaw reports. The move follows a strong year of bricks-and-mortar expansion for Costco in Canada.
Quote: “This shows how Amazon is affecting the entire system, including Costco,” said Sylvain Charlerbois, agriculture expert and Dean of management at Dalhousie University in Halifax.
Ex-Secretary of State Rex Tillerson will not likely be returning to the oil and gas industry because if he takes a job with a competitor to Exxon Mobil Corp., where he was CEO, he could lose US$180 million in deferred compensation. Tillerson agreed to a payout plan after leaving Exxon that will compensate him through an independently managed trust for his 2 million unvested shares and stock units, accumulated over his years at the company.
Bottom line: Tillerson’s ethics agreements also helped him avoid an immediate federal income tax bill of US$72 million, according to tax specialists who reviewed his compensation plan.
Women, youth and long-term unemployed people are set to re-enter the labour market as a result of increasing investment in Canada, according to Bank of Canada Governer Stephen Poloz. During a speech Tuesday, Poloz said there was untapped potential in the labour market that would allow the economy to continue expanding without inflation.
Bottom line: The Bank of Canada has taken a cautious stance on raising interest rates further, after increasing borrowing costs three times since July to tackle inflation.