Good morning once again. Shari Kulha here, hosting this morning’s presentation of the top business news to go with your first coffee. It seems there are resolutions required for the problems in all these cases below. I hope your cup o’ caffeine, at least, needs no fixing.
Alicia Siekierska reports that experts say the Uber self-driving car fatality in Arizona won’t slow long-term development. Uber stopped its autonomous vehicle operations in Toronto and three U.S. cities after the accident Monday. Prof. Bryant Walker Smith, who studies the legalities of self-driving vehicles, said “the lawfulness of the victim’s actions is only marginally relevant to the technical performance of Uber’s testing system.”
Quote: “In situations where there is no safety driver to be interviewed, how are they going to deal with this and are they really ready to call a vehicle safe?” asked Michael Ramsey, an autonomous vehicle analyst at U.S. technology research firm Gartner. “How are they going to determine that? It reaffirms that this is a real concern, not just something theoretical.”
A review of sales practices at Canada’s Big Six banks found risks of “mis-selling” to customers. The Financial Consumer Agency of Canada watchdog warned that the banks’ sales-focused culture elevates the risk that employees may flout consumer protection rules, Geoff Zochodne reports. But Neil Parmenter, CEO of the Canadian Bankers Association, said that “banks get this right the vast majority of the time.”
Quote: The FCAC said “We’re asking (banks) to create or improve the governance frameworks they have to monitor and assess their sales practice risk and their market conduct risk so they’re as robust as the other governance frameworks they have in place.”
Geoffrey Morgan consolidates some analysts’ notes for us on the effect of DBRS’s comments on pipeline outlook in the wake of U.S. policy changes. Last week, the FERC said tax-friendly master limited partnerships could no longer recover an income tax allowance in certain pipeline service contracts. Shares at both Enbridge and TransCanada slid further again.
Bottom line: In one example, RBC Capital Markets analyst TJ Schultz called Enbridge Energy Partners “a broken tool” and lowered his price target to US$12 a share from US$17. He also slashed his target on TransCanada’s TC Pipelines LP by US$21 a share to US$45 because half its agreements will be affected by the FERC’s new tax rules.
Joe Chidley provides an entertaining read on the escalating tariff tumult between the U.S. and China. He says U.S. President Donald Trump erroneously looks at global trade as a zero-sum game, in which the score is kept by trade balances and imbalances, and which he thinks he can win by shouting loudly and punishing “offenders” — but American consumers and businesses will be hurt the most over the long run.
Bottom line: Recently, the nonpartisan Information Technology and Innovation Foundation estimated that a 10-per-cent levy on Chinese IT imports alone would “slow the growth of U.S. output by US$163 billion over the next 10 years, and a 25 per cent tariff would slow output by US$332 billion.”
Canada recognizes the disruption major technology companies could have on government revenue and will study whether a new tax regime is required for the industry. The EU is considering imposing a levy on online companies. U.S. Treasury Secretary Steven Mnuchin said last week the Trump administration “firmly opposes” the measure.
Quote: “We are looking at it carefully because we need to understand what, if anything, happens to our tax base based on a changing of the economy towards a different business model,” Finance Minister Bill Morneau said. Ottawa is “studying the issue with an intent to have a point of view.”