Canada's central bank chief worries about trade deal

   Canada column for Sunday, Sept. 30/18

   THE CANADIAN REPORT

   (c) By Jim Fox

   Should the U.S. follow through with punishing tariffs on Canadian-built vehicles and auto parts, there would be turmoil in the economy.

   Bank of Canada Governor Stephen Poloz made the comment while saying that uncertainty over the fate of the North American Free Trade Agreement has already resulted in a drop in business investment.

   In another bout of unflattering remarks about Prime Minister Justin Trudeau and Canadian NAFTA negotiators, President Donald Trump said if Canada isn’t in the new deal he will slap tariffs on autos.

   Such a move would hurt Canadian workers as well as Americans since the major auto companies in Canada are owned by the Detroit-based companies.

   Negotiators continue working to find an agreement but punitive measures such as tariffs could spike inflation and slow the economy, Poloz said.

   BULLETIN: A revised NAFTA deal including Canada was reached. Go to: https://www.theglobeandmail.com/politics/article-canada-us-reach-outline-of-nafta-deal-pending-approval-of-trump/

   The central bank held off raising its trendsetting interest rate this month but an increase is expected at the next announcement on Oct. 24.

   ---

   Work has begun on a second bridge that will also join the existing tunnel at Canada’s largest border crossing with Detroit.

   The six-lane, 1.5-mile cable-stayed bridge to connect with Windsor, Ontario is to cost $5.7 billion and take six years to build.

   To be called the Gordie Howe International Bridge to honor the hockey legend, the bridge will rely on tolls to pay back Canada’s investment in its construction.

   In order to end the stalemate over who would pay for what, the Canadian government stepped in to cover the costs and decided not to partner with a private-sector consortium.

   Along with passenger traffic, about 25 percent of all goods between Canada and the U.S. passes through the Detroit-Windsor corridor.

   ---

   News in brief:

   - Empire Co., operator of the Sobeys grocery chain, has reached a deal to acquire food retailer Farm Boy. The acquisition of the Ontario-based chain of specialty grocery stores puts its value at $800 million. It includes 26 Farm Boy locations in Ontario and will allow the company to increase its growth in booming markets such as Toronto and southwestern Ontario. It will also include converting some existing Sobeys’ stores.

   - Canada’s economy expanded more than expected last month as the gross domestic product grew by 0.2 percent after little change in June. The annual inflation rate was 2.8 percent, down from 3.0 percent in July. The growth was credited to increased strength in the manufacturing sector, Statistics Canada reported.

   ---

   Facts and figures:

   Canada’s dollar is higher at 77.49 cents U.S. while the U.S. dollar returns $1.29 Canadian before bank exchange fees.

   The Bank of Canada’s key interest rate is steady at 1.5 percent while the prime-lending rate is 3.7 percent.

   Stock markets are lower, with the Toronto exchange index at 16,073 points while the TSX Venture index is 709 points.

   The average price for gas in Canada is lower at $1.279 a liter or $4.86 (Canadian) for a U.S. gallon.

   Lotto 6/49: (Sept. 26) 5, 7, 9, 35, 42 and 45; bonus 31. (Sept. 22) 19, 34, 36, 39, 40 and 49; bonus 2. Lotto Max: (Sept. 21) 3, 9, 15, 16, 19, 45 and 48; bonus 42.

   ---

   Regional briefs:

   - Ontario’s new Conservative government has decided the “Drive Clean” program has run out of gas. Premier Doug Ford said the government will end the mandatory emissions test for passenger vehicles as of next April. The target instead will be heavy trucks, that he called the “biggest polluters on the road.” The program was started in 1999 to curb polluting vehicles that had to pass a test to renew their licenses.

   - New Brunswick’s incumbent Liberal Premier Brian Gallant has refused to give up even though his party failed to win a majority in last week’s election. Gallant was given time to try to form a coalition with the Green Party for a minority government. The deadlocked election result gave the Conservatives 22 members while the Liberals elected21 and there were three each for the Greens and the People’s Alliance in the 49-seat house.

-30-

Jim Fox can be reached at canadareport@hotmail.com