Skip to main content

The United States made official its demand that the binational panels used to settle trade disputes under Chapter 19 be done away with.Judi Bottoni/The Associated Press

TOP STORIES

U.S. demands end of NAFTA trade-dispute panels

The U.S. has formally demanded that the Chapter 19 dispute resolution panels favoured by Canada be scrapped from the North American free-trade agreement, broaching the thorny subject of government procurement and contracting in the first round of trade talks, The Globe and Mail has learned. One source with knowledge of the talks said American and Canadian negotiators each have presented vastly different texts for a revamped Chapter 19. Ottawa has vowed to walk away from the talks before it accepts a NAFTA without the panels. The Chapter 19 tribunals allow NAFTA countries to appeal each others' decisions to impose punitive import duties. (for subscribers)

This is the daily Morning Update newsletter. If you're reading this on the web, or if someone forwarded this e-mail to you, you can sign up for Morning Update and all Globe newsletters here.

If you like this newsletter, you might want to subscribe to our brand new
Evening Update newsletter. It's a roundup of the important stories of the day that will be delivered to your inbox every weekday around 5 p.m.

Liberal-named consul-general given nearly double official salary rate

Rana Sarkar, a well-connected former Liberal candidate who was appointed by Prime Minister Justin Trudeau to a plum diplomatic posting in San Francisco, is being paid nearly twice as much as the job's official salary rate. The government trumpeted the appointment as a move to beef up its U.S. diplomatic team ahead of NAFTA talks. But the Liberal cabinet set a salary range for Mr. Sarkar between $221,300 and $260,300, far more than the official pay scale for the consul-general of San Francisco, ranging from $119,600 to $140,700.

Inconsistent rules for marijuana stock listings sow confusion

CannTrust Holdings is slated to go public on Monday amid growing concerns over the legal risks of growing and selling pot in the U.S., where marijuana is illegal under federal law. CannTrust, which generates some revenue in the U.S., will list its shares on the Canadian Securities Exchange. Competitor TSX has been turning cannabis firms with U.S. exposure away as it conducts an internal regulatory review. TSX owner TMX operates the only platform that is used in Canada to finalize stock trades. That platform is also reviewing the legal risks of handling trades in these stocks, with one alternative being banning them. Such a move could disrupt trading in the shares of all pot companies with U.S. assets that are listed on any exchange in Canada. (for subscribers)

Aid blocked from North Korea as sanctions frighten shippers

The containers, filled with 137 tonnes of soybeans, were already midway across the Pacific when Susan Ritchie got the bad news. It was no longer possible to deliver them to their destination, North Korea. The contents were clearly humanitarian goods, and Ms. Ritchie, through Vancouver-based First Steps, has a long history of sending such materials to the isolated regime. But amid increasingly strict new sanctions, North Korea has become an even greater pariah state. The sanctions specifically allow for the continued movement of humanitarian goods to North Korea. But the unwillingness of shipping companies to touch any goods bound there comes amid a new international effort to coerce change among Pyongyang's recalcitrant leadership. (for subscribers)

Survey finds 'dramatic shift' in Canadian perception of U.S. approach to human rights

For the first time in 13 years, Canadians think they have more in common with Britain and Germany's approach to human rights than that of the United States, a new survey suggests. The finding is the latest in a 13-year tracking of Canadian and American perceptions of the bi-national relationship by Nanos Research and the State University of New York at Buffalo. Survey participants on both sides of the border were asked which countries are closest to theirs on human rights. Forty-four per cent of Canadian respondents said Canada most closely aligns with Britain on human rights, followed by Germany at 25 per cent and the U.S. at 16 per cent.

Canada-EU trade deal spurs launch of new shipping routes

As the Canada-Europe free-trade deal comes into force, container-ship company Maersk Line is adding new service between Montreal and ports on the Mediterranean Sea in a bid to tap new flows of goods. The Comprehensive Economic and Trade Agreement (CETA) will eliminate European tariffs on key Canadian exports while phasing in free-market access on other products. Jack Mahoney, president of Maersk Line Canada, said his company has seen its Canadian volumes grow by 15 per cent this year. The bilateral trade deal between Canada and the massive 28-member European region should spur even greater growth, he said. (for subscribers)

MORNING MARKETS

Global stocks struggled at a 5-1/2-week low on Monday, though metals dazzled with zinc at its highest in a decade, copper hitting a nearly three-year high and iron ore's gains in the last two sessions stretching to 5 per cent.  Traders were digesting the latest departure from Donald Trump's White House team, watching tensions around North Korea and waiting to see what the world's top central bankers would signal at the annual Jackson Hole gathering later in the week. Tokyo's Nikkei was down 0.4 per cent at 5:45 a.m. ET, while Hong Kong's Hang Seng and the Shanghai composite were both about 0.5 per cent higher. In Europe, the FTSE 100 was down slightly while Germany's Dax and the Paris CAC were both down about 0.4 per cent. New York futures were down. The Canadian dollar was trading at 79.38 cents (U.S.).

THE LOOKAHEAD

Strong Canadian economy expected to boost bank earnings

A robust Canadian economy is expected to carry the country's big banks to solid second-half results, but the first tentative steps out of an era of ultralow interest rates and a surging loonie could prove a mixed blessing for profits. The Big Six banks will report fiscal third-quarter earnings this week and next, and though two familiar themes still dominate the conversation – rising rates and an uneasy housing market – neither is expected to noticeably move the needle on earnings for now.

WHAT EVERYONE'S TALKING ABOUT

Will Couillard survive the wrath of Quebec's anglophones?

"With barely a year to go before the next provincial election, Philippe Couillard is looking vulnerable, in part because of anglo antipathy. A much-improved economy notwithstanding, poll after poll shows the opposition Coalition Avenir Québec moving into first place in the polls among francophone voters, while non-francophone voters are increasingly defecting from the Liberals. With the Parti Québécois in the dumps and no independence referendums on the horizon, anglophone voters no longer feel hostage to the Liberals and may even seek to punish them in the 2018 election." – Konrad Yakabuski

How we can build resilience against hatred in Canada

"Canadians watched in dismay as the hate-inspired violence unfolded south of the border, perhaps naïve to assume that such divisive ideologies do not – and cannot – exist in our multicultural nation. The truth of the matter is that Canada is not immune to violence inspired by bigotry and hatred." – Ryan Scrivens

I was a neo-Nazi. I know the cure for hate

"I watched the violence unfold in Charlottesville with a deep sense of shame about who I was decades ago. In the 1990s, similar street violence would exhilarate me – like the rallies I used to organize for the White Aryan Resistance, a white-supremacist group. Today, with deep sadness, I remember the murder of Nirmal Singh Gill in 1998; the 65-year-old Sikh caretaker kicked to death by five skinheads in Surrey, B.C. Canada does have a history of white-supremacist-driven murder. This hate-fuelled ideology inevitably ends in murder. Charlottesville was a massive wake-up call for Americans who had swept this problem under the rug, and it should be the same for Canada." – Tony McAleer

Unemployment is falling, but the ECB and U.S. Fed's inflation framework isn't working

"Confronting an economy in which falling unemployment is failing to kindle inflation, as the supposed laws of economics say it should, the European Central Bank counsels 'patience, persistence and prudence.' Investors may need to add 'suspension of disbelief' to that. The data, both in the euro zone and in the United States, are not supportive of the old verities embodied in the Phillips curve, which holds that as unemployment falls, inflation will rise." – James Saft

Let judges do the job their title implies

News item: The federal Justice Department has hired a pollster to sound out Canadians on their appetite for criminal sentencing reform – a political 'testing of the waters,' as it were. It's all well and good to get a feel for voter sentiment, but the water is fine, thank you. Ottawa should just go ahead and dive in. The former Conservative government had a fondness for mandatory minimum sentences for an unnecessarily broad range of crimes. There should be no hesitation to repeal many of the legislative decisions that followed from that preference. - Globe editorial

HEALTH PRIMER

Parabens in cosmetics, soaps tied to poor semen quality

Men who have been exposed to common chemicals known as parabens have lower testosterone levels and more sperm that are abnormally shaped and slow moving, according to a study that suggests these ingredients may contribute to infertility.

MOMENT IN TIME

Election elicits charges of 'fake news'

Aug. 21, 1867:
In late August, 1867, the first federal election after Confederation was well under way, with polling taking place, depending on the riding, from early August through to late September. Newspaper coverage was comprehensive and highly partisan. The Globe – which supported the Reform Party and the candidacy of publisher (and Reform's unofficial leader) George Brown – accused a rival Toronto paper of concocting stories. The Leader, which backed the Conservative party, was "fabricating speeches for Mr. Brown which he never delivered, and articles attributed to The Globe which never appeared in its columns," The Globe reported. It cited a letter in The Leader that quoted from an old Globe story, noting that "a reference to our files shows that these extracts are sheer fabrications!" The Leader, according to The Globe, was resorting to "the grossest fraud and forgery" in its election coverage. – Richard Blackwell

Morning Update is written by Steven Proceviat.

If you'd like to receive this newsletter by e-mail every weekday morning, go here to sign up. If you have any feedback, send us a note.

Andrew Willis of Report on Business tells investors why they should be wary of buying into private pot businesses going public

The Globe and Mail

Interact with The Globe