CANADA ECONOMICS

BRAZIL

The Globe and Mail. 15 Dec 2017. CPPIB enters Brazilian renewables sector
JACQUELINE NELSON

What was higher-cost, and more being done to be environmentally conscious, is now mainstream and cost competitive, which is, frankly, very attractive from a climatechange point of view, but also from an investment point of view.

BRUCE HOGG HEAD OF CPPIB’S NEW POWER AND RENEWABLES GROUP

Canada Pension Plan Investment Board is creating a renewable-energy and power group, jump-starting its investment strategy with a deal for Brazilian wind assets.

The country’s largest pension fund says it will contribute an initial $272-million to buy two operational wind parks in northeastern Brazil through a jointventure with an energy subsidiary of industrial conglomerate Votorantim Group.

The partnership comes after years of CPPIB scouting from its Sao Paulo office for investment opportunities in Brazil’s established renewable-energy sector. The country has been looking to diversify away from its traditional strength of building hydroelectric dams toward sources such as wind power, which has become more affordable. CPPIB’s new partner, Votorantim Energia, is already among the largest hydro-power generators in the local market and, together, the investors will seek out other power generation deals in the country.

The deal also signifies the pension fund’s increased focus on profiting from the global transition to an economy based on lower-carbon energy. CPPIB forecasts this shift could take as long as 20 years, but sees significant need for capital to build new sources of power generation now, particularly in the renewables area.

“What was higher-cost, and more being done to be environmentally conscious, is now mainstream and cost competitive, which is, frankly, very attractive from a climate-change point of view, but also from an investment point of view,” said Bruce Hogg, who will head the new power and renewables group at CPPIB. He was head of infrastructure for the Americas. “We thought that, as a fund, it was important to [have] a dedicated team and portfolio focused on this space, given how important it’s going to be in the future.”

Other pension funds have increased their attentiveness to climate change and how environmental factors might shape their portfolios. Earlier this year, the Caisse de dépôt et placement du Québec said it would reduce the carbon footprint of the overall portfolio by 25 per cent by the year 2025. Other organizations are also promoting a move away from oil and gas. Earlier this month, the World Bank said it will drastically cut back on such financing in the developing world after 2019.

CPPIB stresses that it is making no sudden moves away from fossil fuels. The fund’s naturalresources group invests directly in oil-and-gas assets, as well as some metals and mining, and was valued at $4.3-billion at the end of its 2017 fiscal year. The new power-and-renewables team is already working closely with both CPPIB’s naturalresources and infrastructure groups.

“I think, globally, right now, 40 per cent of the world’s power supply still comes from coal,” Mr. Hogg said. “So there will be an evolution … from coal, to more gas, towards renewable. Ultimately, you look at a combined system that meets people’s energy needs in the context of growing energy demand in emerging markets.” He added that he would expect the fund’s overall investment in the energy space will increase over time, reflecting the demand for power development, generation and technology improvements from rising middle-class populations in places such as Brazil and India.

In its latest partnership, CPPIB is accessing a growing population that is consuming more energy, creating a need for new capacity. The assets are in a consistently windy area of Brazil, giving them more efficiency than can be achieved in some other parts of the world. Combined, the two sites can generate up to 565 megawatts of power.

CPPIB expects to put more than $1-billion to work through the partnership with Votorantim, and will pursue powergeneration investments and acquisitions across Brazil.

“We are very enthusiastic to partner with CPPIB, a reputable investor that shares our longterm vision for the sector and the prospects for the joint venture,” Joao Miranda, CEO of Votorantim, said in a statement. “This reinforces our commitment to the power sector in Brazil, where we have been investors for almost 100 years.”

REUTERS. DECEMBER 15, 2017. Votorantim Energia, Canada pension board form JV to invest in power

(Reuters) - Canada Pension Plan Investment Board (CPPIB) and Brazil’s Votorantim Group’s energy unit Votorantim Energia have formed a joint venture that will buy two operational wind parks in northeastern Brazil, they said.

The wind parks will have a combined generation capacity of 565 megawatts, they said in a joint statement.

Canada’s biggest public pension plan will be initially contributing C$272 million ($213 million) in equity, according to the statement.

The joint venture sees an investment of more 3 billion reals ($897.72 million) in Brazil’s power generation sector and will pursue further acquisitions in Brazil.

Reuters reported in October Votorantim SA’s energy unit was in talks with global pension and sovereign wealth funds to create an integrated wind, solar and small-scale hydropower electricity joint venture in Brazil.

Votorantim Energia had earlier discussed about plans of a joint venture with Singapore’s GIC Pte Ltd [GIC.UL] and several North American pension funds.

The Votorantim conglomerate has doubled down on energy for diversification from core metals, cement, pulp and steel making. Clean energy projects often provide stable revenue and cash flow streams - generally a goal pursued by pension and sovereign wealth firms alike.

Brazil’s power grid is highly dependent on renewable energy with the role of solar energy growing in recent times.

Years of harsher-than-expected droughts are pushing the government and investors to rethink the country’s dependence on hydropower while accelerating a replacement of fossil fuels.

Reporting by Kanishka Singh in Bengaluru; Editing by Gopakumar Warrier

REUTERS. DECEMBER 15, 2017. Brazil's Embraer eyes 2024 commercial launch for Uber partnership: CEO

SAO PAULO (Reuters) - A partnership that Brazilian planemaker Embraer SA has struck with U.S. ride-hailing application Uber Technologies Inc will launch its first test flight in 2020, and aims to start commercial service in 2024, an executive said on Friday.

Speaking to journalists in Sao Paulo, Embraer Chief Executive Paulo Cesar de Souza said the business model and financial commitments of the partnership are yet to be defined. Embraer and Uber have previously said they are developing electric vehicles with vertical takeoff and landing to serve as an urban taxi service.

Reporting by Brad Haynes; Writing by Gram Slattery; Editing by Meredith Mazzilli

REUTERS. DECEMBER 14, 2017. Exclusive: Chevron nears Schlumberger deal to drill wells in Brazil: sources
Alexandra Alper

RIO DE JANEIRO (Reuters) - Chevron Corp has reached preliminary agreement with oil services firm Schlumberger NV to drill six wells in a Brazilian offshore field, two sources said this week, in a bid to lift its output in the South American country after a 2011 oil spill there cut production.

Six wells would be drilled in the Frade field in Brazil’s offshore Campos basin, and work should begin in early 2019, the sources said. Drilling for the contract, worth about $20 million would be spread over 18 to 24 months, one of the people familiar with the matter said.

One of the sources spoke on Thursday and the other on Wednesday. Both declined to be named since the agreement was not public or final.

The proposed price tag does not include well completion or drilling fluids needed for the project, the sources said. The agreement, which awaits approval by Chevron’s board, covers drilling, drill bits, cementing and well data collection, they said.

Chevron spokeswoman Isabel Ordonez declined to comment. Schlumberger spokesman Joao Felix also declined to comment.

If approved, the project would mark a much-anticipated expansion of exploration for Chevron in Latin America’s top oil producing nation, where its output has slumped to 12,500 barrels per day (bpd) from 36,400 bpd before the 2011 accident.

The spill, which released 2,400 barrels into the ocean some 107 kilometers (73 miles) off the coast of Rio de Janeiro state, did not reach the shore and was smaller than several previous spills in Brazil by state-controlled oil firm Petroleo Brasileiro SA.

But coming on the heels of BP Plc’s 4.9 million-barrel U.S. Gulf of Mexico spill, the accident drew widespread attention and led prosecutors to bring criminal charges against the company and 11 employees, as well as to seek $10.7 billion in damages through a civil lawsuit.

According to a 2013 filing, Chevron settled the civil charges by promising to spend $43 million on social and environmental programs. The criminal charges were dismissed in 2015, but prosecutors have sought to reinstate the case by appealing the decision, Chevron has said.

Chevron did not take part in October auctions of blocks in Brazil’s choice offshore pre-salt layer, even as rivals Royal Dutch Shell, BP and Exxon Mobil Corp bet big.

Petrobras owns 30 percent of Frade. Chevron owns 52 percent and is responsible for field management. The rest is owned by Frade Japao, a unit of Japan’s Inpex.

Additional Reporting by Ernest Schneyder and Marta Nogueira in Rio de Janeiro; Editing by Gary McWilliams and Matthew Lewis

G-7

PM. Prime Minister unveils themes for Canada’s 2018 G7 PresidencyThe 2018 G7 logo, which evokes Charlevoix's rich natural landscape Ottawa, Ontario

December 14, 2017

The Prime Minister, Justin Trudeau, today announced during a Facebook Live event the themes that will guide Canada’s 2018 G7 Presidency.

Canada’s 2018 G7 Presidency is an important opportunity for Canada to speak with a strong voice on the international stage, engage G7 counterparts on pressing global challenges, and make real progress on goals we all share.

This coming year, Canada will advance domestic and international priorities framed by the following five key themes:

• Investing in growth that works for everyone;
• Preparing for jobs of the future;
• Advancing gender equality and women’s empowerment;
• Working together on climate change, oceans and clean energy; and
• Building a more peaceful and secure world.

In the months leading up to the Leaders’ Summit, Canada will host a series of G7 ministerial meetings that address these themes. Each of these meetings will also integrate a gender-based analysis and will include a focus on gender equality and women’s empowerment.

During today’s event, the Prime Minister also unveiled the 2018 G7 logo, which evokes Charlevoix's rich natural landscape.

Quote

“Canada is proud to put forward a progressive agenda for the 2018 G7. The themes we have chosen for the year will help focus our discussions on finding real, concrete solutions to promote gender equality, women’s empowerment, clean energy, and economic growth that works for everyone. As G7 partners, we share a responsibility to ensure that all citizens benefit from our global economy, and that we leave a healthier, more peaceful, and more secure world for our children and grandchildren.”

— Rt. Hon. Justin Trudeau, Prime Minister of Canada

Quick Facts

• Canada will assume the Presidency of the G7 on January 1, 2018, and will host the G7 Leaders' Summit in the Charlevoix region of Quebec from June 8-9, 2018.
• The country that holds the G7 Presidency sets the agenda for the year, and is responsible for hosting and organizing the Leaders' Summit, ministerial meetings, and other associated events.
• This will be the sixth Leaders’ Summit hosted by Canada, and the first in Quebec since 1981.
• To coincide with the official start of Canada’s G7 Presidency, a social media campaign and website will be launched in early 2018 to engage Canadians. This will help us better understand people’s views on various aspects of the G7 themes and encourage youth participation on important issues that affect us all.
• The previous Canadian-hosted Leaders’ Summits were held in Muskoka, Ontario (2010); Kananaskis, Alberta (2002); Halifax, Nova Scotia (1995); Toronto, Ontario (1988); and Ottawa-Montebello, Ontario and Quebec (1981).
• The G7 is an informal grouping of seven of the world’s advanced economies consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. The European Union was first invited to attend the G7 in 1977, but is not part of the hosting rotation.

Road to the 2018 G7 Summit in Charlevoix: http://www.international.gc.ca/g7/index.aspx?lang=eng

Canada to host 2018 G7 Summit in Charlevoix, Quebec: https://pm.gc.ca/eng/news/2017/05/27/canada-host-2018-g7-summit-charlevoix-quebec

PM. ​Itinerary for Thursday, December 14, 2017 Ottawa, Ontario

December 13, 2017

Itinerary for the Prime Minister, Justin Trudeau, for Thursday, December 14, 2017:

Ottawa, Ontario

4 p.m. The Prime Minister will participate in a live discussion on the G7 Canada Facebook page.

7 p.m. The Prime Minister will attend a dinner being held in honour of the Right Honourable Beverley McLachlin, Chief Justice of Canada. He will also deliver remarks.

Shaw Centre

55 Colonel By Drive

Notes for media:

Media should arrive no later than 6 p.m. at the main entrance of the Shaw Centre

Open coverage

NAFTA

EDC. DECEMBER 14, 2017. Trade Confidence Holding its Ground
By Peter G Hall, Vice President and Chief Economist

2017 has not been international trade’s best year. Oh, growth is having a good run alright; the problem is political. Election after election in Western Europe had significantly negative trade overtones, and at one point it looked like globalization’s number could be up. Thankfully, those elections went the other way. However, last year, America’s didn’t, and this year has put the NAFTA deal at great risk. Canadian exporters have every reason to doubt the future. Just how is trade confidence doing?

All things considered, it’s holding its own. In our Fall 2017 survey, conducted between October 2 and 25, EDC’s Trade Confidence Index is down marginally, extending a softening trend that began three years ago. The drop in the Index was a barely-noticeable 0.4 points, to 73.5, a level that’s just a hair below the series average. Given what might have happened, the result is a relief. Juxtaposed with actual export performance, though, things could easily have been better. It seems that these two factors sort of offset each other, producing the bland shift.

What do the details say? Of the five Index elements, the domestic questions were clearly down. The balance of opinion on near-term prospects for domestic sales showed the largest movement, dropping 9 percentage points to 34 per cent. Perceptions of near-term domestic economic conditions also slid, but not by as much – the balance of opinion was even in the spring survey, but has since slid by 2 percentage points.

Shifting to the external questions, export sales once again posted the most positive balance-of-opinion scores, but between surveys the result weakened, from 54 to 50 per cent. The rest of the trade-related scores were up. Feelings are still net negative about world economic conditions, but less so this time: the balance of opinion score improved from -9 per cent to just -1 per cent. On balance, feelings about trade are showing much greater progress than the domestic economy metrics. This squares with the fundamental weakness of Canada’s current domestic economy (that is, high consumer indebtedness and a housing bubble) versus resurgent global demand and its effects on trade.

Drilling further into the results, the majority of respondents still believes that export sales will increase over the next six months. Of these, 13 per cent attribute this to new business, 12 per cent cite growing demand and 11 per cent say expansion into new markets will boost their activity. This is in line with the recent upswing in global demand.

Feelings about world conditions are less upbeat, although there is less pessimism than in the Spring survey. Of the 20 per cent feeling gloomy, over one-third fear global recession and instability. Fallout from the US election still troubles 30 per cent of exporters polled, and uncertainty surrounding free trade agreements was mentioned by 17 per cent as a negative factor – up from just 3 per cent in the spring.

In contrast, respondents are less pessimistic about international business opportunities. Those expecting improvement on this front rose slightly, to 35 per cent of the sample group. Of these, 16 per cent credit free trade agreements for their optimism, strange in light of NAFTA renegotiation. We can only conclude that they are referring to the CETA agreement with Europe, and possible new free trade agreements with other countries and regions, although this is not specified in survey results. Demand again appears to be a factor in this enthusiasm – 10 per cent point to growth in foreign markets, and 9 per cent cite stability of the global economy and markets in general.

Talk about mixed! This survey’s results are obviously going off in different directions. But this is a direct reflection of the clash of conditions we now see in the global economy: at the very moment we seem to be emerging from the post-recession abyss, significant threats face the very architecture of the global economy. Results show that businesses are at least considering a re-jig of their investment plans. If there is a soft silver lining, though, it’s that the word diversification is again creeping into international trade street-speak – partly because of policy turmoil, but more a result of improving market conditions.

The bottom line? Trade confidence is holding steady, pulled in both directions by opposing forces. We can only imagine what it would look like without the NAFTA uncertainty.

THE GLOBE AND MAIL. THE CANADIAN PRESS. REUTERS. DECEMBER 15, 2017. Some Canadian firms could move to U.S. amid NAFTA worries: EDC survey
DAVID LJUNGGREN

OTTAWA - More a quarter of Canadian firms could move part of their operations to the United States amid uncertainty over the future of the NAFTA trade pact, the nation's export credit agency said on Friday.

The semi-annual forecast by Export Development Canada underlines the challenges posed by the more isolationist approach to trade of U.S. President Donald Trump's administration.

Canada sends 75 per cent of all goods exports to the United States and could be badly hit if Washington walks away from the North American Free Trade Agreement. One way to cushion the potential blow is to set up shop in the United States.

EDC said 26 per cent of the 1,002 firms surveyed "indicated that they are moving – or are considering moving – part of their operations inside the U.S. border in response to the elevated uncertainty regarding U.S. trade policy."

Talks to modernize the treaty have so far failed to resolve major differences between the United States on one hand and Canada and Mexico on the other.

The survey of 1,000 firms from Oct. 2 to Oct. 25 found 23 per cent of respondents said the NAFTA talks were hitting their Canadian operations. The same percentage said they were trying to diversity their exports to new markets, with the focus on the European Union and China.

Despite the tensions, the vast majority of exporters expected overall conditions to remain the same or improve over the next six months, with little change in new orders from U.S. customers.

"Trade confidence is holding steady ... we can only imagine what it would look like without the NAFTA uncertainty," EDC chief economist Peter Hall said in a commentary.

BLOOMBERG. 15 December 2017. Nafta May Be on Track for an Unhappy New Year
By Andrew Mayeda , Josh Wingrove , and Eric Martin

• Talks in Washington poised to end with no new chapters closed
• Next round in January looming as key moment for trade deal

The U.S., Mexico and Canada are heading into 2018 with no clear plan for saving the North American Free Trade Agreement.

Negotiators are poised to wrap up their latest round of talks Friday in Washington without closing any new chapters of a revamped accord. While officials made headway on issues such as telecommunications and e-commerce this week, according to people familiar with the talks, the parties haven’t finalized agreements on even minor issues since October. The lack of progress makes the goal of reaching a deal by March seem increasingly unrealistic.

“People have to be planning for what they do in a worst-case scenario,” said Robert Holleyman, a partner at Crowell & Moring who served as deputy U.S. Trade Representative under Barack Obama. “At the same time, I’ve never seen industry more involved across all sectors in making the case that the U.S. needs to come out with a Nafta that allows all three countries to declare victory.”

Only two chapters are completed out of a new deal that’s expected to include nearly 30. The three nations had already punted discussion of tough issues such as regional-content requirements for cars to qualify for Nafta’s benefits and investor-state dispute systems, where U.S. proposals have been described as unworkable by Canada and Mexico.

With a general election in Mexico and a U.S. congressional vote next year, time is running out to salvage the 23-year-old accord, which governs more than $1 trillion in trade. President Donald Trump has threatened to pull out of the deal if a new pact doesn’t favor the U.S. The next round of talks in Montreal from Jan. 23-28 is looming as a key moment.



Expectations for major breakthroughs at the past two rounds of talks were dampened by the lack of political involvement. The ministers responsible for Nafta are expected to directly participate in the discussions again at the meetings next month in Canada.

The slow pace of talks that began in August, and Trump’s brinkmanship, have fueled speculation about what would happen if the U.S. issues a six-month withdrawal notice under the agreement. Trade lawyers and economists in Washington are debating whether Congress has the authority to block the president from raising tariffs on Mexico and Canada.

“Trump can tweet that he’s withdrawn, but the tariff preferences could remain in place,” said Caroline Freund, a senior fellow at the Peterson Institute for International Economics. “It would be withdrawal on paper but not in substance.”

Withdrawal Warning
Republican lawmakers, including Senators John Cornyn and Ted Cruz, have warned Trump not to withdraw. Still, some experts doubt whether Congress could stand in Trump’s way. “History suggests it would be very challenging for Congress to muster the will and the energy to forcefully counter that,” said Holleyman.

Meanwhile, left-wing lawmakers such as Vermont Senator Bernie Sanders are pushing Trump to stick to his promise to deliver a better deal for workers.

A breakthrough next month may require a shift in the dynamic between the three nations. Mexico and Canada are reticent to put forward counter-proposals on what they see as provocative U.S. proposals. Meanwhile, U.S. negotiators are frustrated with the lack of back-and-forth exchanges on their core demands. At the last round, in Mexico City, U.S. Trade Representative Robert Lighthizer made it clear the U.S. wants changes that will “rebalance” trade on the continent, and he urged Mexico and Canada to engage in a “serious way.”

“The negotiating round in January will be the moment of truth,” said Lori Wallach, director of the Global Trade Watch program at Public Citizen, a nonprofit group that says Nafta has hurt workers.

BLOOMBERG. 14 December 2017. New Nafta Pits Silicon Valley Against Hollywood Over Copyright
By Andrew Mayeda

• U.S. proposal waters down safeguards for online firms: sources
• Film and music industries say creators deserve to be rewarded

Online giants such as Alphabet Inc.’s Google and Facebook Inc. are facing off against Hollywood studios and record labels over how to update the North American Free Trade Agreement to protect copyright in the digital age.

Silicon Valley is pushing for exceptions to copyright rules for online platforms and Internet service providers it says are needed to keep content flowing on the web. Meanwhile, the U.S. government seems to be taking positions favored by companies such as Walt Disney Co. and Time Warner Inc., which are lobbying for stronger protections for copyright owners.

So far, neither side is declaring victory. Industry insiders say haggling over copyright could go down to the wire. While Nafta negotiators meeting this week in Washington are scheduled to discuss digital trade issues, intellectual property isn’t on the agenda, according to a copy seen by Bloomberg News. Negotiators are punting decisions on harder issues into 2018.

The U.S. wants to limit allowances for online use of copyrighted material in Nafta, according to two people familiar with the U.S. proposal. That could upset companies like Google and Facebook, which would see that as less supportive of online platforms than existing U.S. law.

Those so-called fair-use exceptions are seen to shield Google when it posts book excerpts in search results, for example. The U.S. Nafta proposal doesn’t spell out as many exceptions as the Trans-Pacific Partnership, which included the U.S., Canada and Mexico, said the people, who spoke on condition of anonymity because the talks aren’t public. But an entertainment-industry representative said TPP shouldn’t be the benchmark, since it made exceptions for online companies that weren’t included in previous U.S. trade deals.

Safe Harbor
The U.S. proposal also doesn’t offer ISPs the same level of protection they’ve received in past trade deals for unintentionally carrying pirated work over their networks, said two of the people. So-called safe-harbor clauses in U.S. law shelter ISPs from liability as long as they make “good faith” efforts to take down unauthorized work.

Tougher copyright rules would be a win for Hollywood and the music industry, which say their businesses are being ravaged by online piracy. But Internet companies are warning the U.S. position could undermine America’s advantage in digital trade, which accounts for a large part of the nation’s exports in services.

The U.S. Trade Representative’s office declined to comment.

Aggressive Proposals

The copyright debate has flown under the radar as Mexico, Canada and business groups such as the U.S. Chamber of Commerce push back against aggressive proposals by the U.S. aimed at reducing the nation’s trade deficit and rebuilding its manufacturing sector. The talks that began in August have failed to yield a breakthrough on the toughest issues. President Donald Trump has threatened to pull out of the deal if the U.S. doesn’t get what it wants.

Tech industry groups were pleased with the copyright provisions in TPP, a deal with 11 Asia-Pacific nations from which the U.S. withdrew in January. The agreement had committed the nations to striking “balance” in enforcing copyright, and providing safe harbor to ISPs.

America’s leadership in the digital economy and the nation’s digital-trade surplus depends “on policies that put American digital exporters in the best position to succeed,” said Ari Giovenco, director of trade and international policy at the Internet Association, whose members include Google, Facebook, Amazon.com Inc., Microsoft Corp. and Netflix Inc.

Appropriate Limits
In a submission to the U.S. government in June, the Motion Picture Association of America called copyright the “lifeblood” of the film and TV industry and said Nafta, which came into effect in 1994, isn’t equipped to deal with the growth of online commerce. The association cautioned U.S. negotiators against mimicking safe-harbor language in U.S. law, which it said has been erroneously interpreted by American courts. Instead, the U.S. should promote “high-level language” with “appropriate” limits on liability, the group said.

“Creators and innovators should be fairly rewarded for their work,” said Brian Pomper, executive director of Action for Trade, a coalition of trade associations representing companies including movie studios, music labels and pharmaceutical firms that want strong intellectual-property protections in Nafta.

“Canada’s longstanding approach on IP has been to ensure a proper balance between the interests of creators and users of copyright material, with due consideration to a broad range of objectives, including the need to account for the role of Internet third parties,” said Adam Austen, a spokesman for Foreign Minister Chrystia Freeland. The Mexican government declined to comment.

— With assistance by Josh Wingrove, and Eric Martin

WTO

Global Affairs Canada. December 14, 2017. Canada leads the way on progressive trade at Eleventh WTO Ministerial Conference in Argentina

Ottawa, Ontario - The Eleventh World Trade Organization (WTO) Ministerial Conference, held in Buenos Aires, Argentina, from December 10 to 13, 2017, was an opportunity for WTO members to discuss ways of moving the organization forward. Canada played a central role in advancing progressive trade initiatives that aim to make trade work for people and protect the interests of Canadians and citizens worldwide.

The Honourable François-Philippe Champagne, Minister of International Trade, led the Canadian delegation at the WTO conference, at which Canada endorsed and signed a number of joint statements and declarations that support the government’s progressive trade agenda. These initiatives aim to level the playing field and advance women’s economic empowerment, increase opportunities for micro-, small and medium-sized enterprises, and improve the rules for global e-commerce.

By pursuing these key priorities, Canada is taking concrete action to ensure that everyone, particularly women and small and medium-sized enterprises, can reach their full potential and take advantage of the opportunities that flow from trade.

While in Argentina, Minister Champagne met with Argentinian ministers and stakeholders. He also participated in a youth round table to build on Prime Minister Justin Trudeau’s visit to Argentina in November 2016. These meetings reaffirmed the two countries’ commitment to explore new areas of cooperation and deepen their commercial relationship.

Minister Champagne will travel to Montevideo, Uruguay, today to meet with stakeholders and open doors for Canadian companies wanting to do business in Uruguay.

Quotes

“I’m proud of the work accomplished at the WTO. Now is the time for Canada to play a leading role by taking its progressive trade agenda to the world. We will continue to work with all WTO member states to ensure that the WTO addresses new economic realities and issues while producing positive outcomes for middle-class Canadians and citizens of other countries around the world.”

- François-Philippe Champagne, Minister of International Trade

Quick facts

• The WTO, which has 164 member countries, was created on January 1, 1995.
• The ministerial conferences are the WTO’s highest decision-making events. Conferences are held at least once every two years and are attended by trade ministers from WTO member countries.

Eleventh WTO Ministerial Conference: http://www.international.gc.ca/world-monde/international_relations-relations_internationales/wto-omc/wto_ministerial-ministerielle_omc.aspx?lang=eng
Canada plays leadership role on Trade and Women’s Economic Empowerment at WTO: https://www.canada.ca/en/global-affairs/news/2017/12/canada_plays_leadershiproleontradeandwomenseconomicempowermentat.html
Canada supports agricultural trade at WTO: https://www.canada.ca/en/global-affairs/news/2017/12/canada_supports_agriculturaltradeatwto.html

Global Affairs Canada. December 11, 2017. Address by the Honourable François-Philippe Champagne, Minister of International Trade at the World Trade Organization 11th Ministerial Conference. Speech

Buenos Aires, Argentina - Check against delivery. This speech has been translated in accordance with the Government of Canada’s official languages policy and edited for posting and distribution in accordance with its communications policy.

Friends and colleagues,

It’s a pleasure to be here.

Let me begin my remarks by extending my appreciation to our colleagues in Argentina for their great work in hosting this conference – the very first time that a South American country has done so.

Congratulations for a great job!  Our Conference Chair, Susan Malcorra’s leadership has helped us focus our efforts.

This Ministerial Conference marks the culmination of a busy period since MC10.

Together, we’ve brought into force the Agreement on Trade Facilitation. We’ve agreed to implement an Amendment to the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement. Also since MC10, we have seen new accessions to the organization and an expansion of members in WTO plurilateral agreements.

These accomplishments must be followed by  clear and credible next steps as we move forward.

The time is now to make trade more inclusive – we need to remind ourselves that trade and investment are first and foremost about making people’s lives better. This is the raison-d’être of e the WTO – to provide a predictable rules-based platform for regulating trade between members.  This is how  economic actors such as  micro, small- and medium-sized entrepreneurs (MSMEs), women and minority-owned businesses will be able to take advantage in  a fair trading environment.

When the latest round of WTO negotiations was launched in 2001, the first I-phone would be still six years away , no one had ever heard of Facebook or Twitter and e-commerce was  still fledgling. Today, it’s hard to imagine any part of commerce that isn’t in some way affected by the digital economy.

Despite the promise of e-commerce as an enabler for MSMEs, women and other minority-owned businesses, supply chains and international markets, we cannot even agree to talk about this issue multilaterally in the WTO.

Leadership by WTO members is required to harness the incredible power of e-commerce along with innovation that MSMEs bring to bear into today’s global trading system. 

 It is time to formally acknowledge the important relationship between trade and gender, a theme that is at the forefront of Canada’s progressive trade agenda. This includes the positive economic and social benefits we could all reap if women were able to fully participate in global commerce.

Canada is proud to support the Declaration on Trade and Women’s Economic Empowerment and I call on all other WTO members to do the same.

Our citizens  expect the WTO to deliver outcomes in these areas.

They also expect us to deliver outcomes on long-outstanding issues like disciplines on harmful fisheries subsidies and domestic support for agriculture

Businesses and industry are looking for a commitment from us to eliminate unjustified non-tariff barriers to trade.  In recent years, our industries have faced an increasing number of non-tariff measures, often in the agricultural sector, implemented and enforced by Members without scientific justification.

This unpredictability which results from the proliferation of these measures inhibits trade for all WTO Members, discourages innovation, and increases costs to consumers.  This is why Canada believes it is crucial to work collaboratively to reduce and eliminate these unjustified non-tariffs measures and reaffirm our commitment towards science-based and evidence-based decision making.

To this effect, Canada continues to encourage Members to base their measures on scientific evidence, and to take into account the advice of the international standards setting bodies.

Let us also have an honest and open conversation about the ways we could work together to improve the operation and functioning of the WTO.

Canada continues to work with all WTO Members on constructive reforms to the organization – and will not engage in discussions on proposals that would be divisive or reduce the ambition or member obligations.

We need to take advantage of the hard work and efforts over the past year and continue the make progress.

Canada will do its part in support of these efforts – we call on all other Members to do the same.

So in conclusion, I look forward to working with you over the coming days as we advance issues in our common interest.

Thank you.

THE GLOBE AND MAIL. DECEMBER 15, 2017. OPINION. Two down, one to go: After trashing NAFTA and TPP, Trump targets WTO
BARRIE MCKENNA, Columnist

OTTAWA - First, he punted the Trans-Pacific Partnership. Then, he dropped a poison pill into the renegotiation of the North American free-trade deal.

Now, Donald Trump is taking aim at the 164-country World Trade Organization, the body that sets the rules for the global trading system.

The U.S. President's legislative accomplishments to date on the home front could fit on a sticky note, but he's making good progress on his "America First" trade agenda.

This week, U.S. Trade Representative Robert Lighthizer delivered a blistering indictment of the WTO at a twice-yearly ministerial meeting in Buenos Aires. He accused unnamed countries of chronically flouting WTO rules and trying to win through lawsuits concessions that they couldn't "get at the negotiating table." And he denounced a clutch of rich countries, including Qatar and Singapore, for masquerading as developing countries to gain a trade edge.

Behind the scenes, the United States is trying to undermine the WTO's fragile consensus-making efforts. It vetoed key wording in a statement issued at the meeting that would have endorsed the "centrality" of the global trading system and the WTO's commitment to supporting development.

The United States is also blocking the naming of new judges to the organization's seven-member appeals body, a move that could hobble the dispute-settlement proceedings.

None of this should surprise anyone. Mr. Trump has threatened to pull the United States out of the WTO and other multilateral trade agreements so it can do one-on-one deals with other countries. His inaugural address last January was an ode to protectionism.

"We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs," Mr. Trump complained. "Protection will lead to great prosperity and strength."

The Trump administration's disdain for the WTO reflects its protectionist instincts. Unfortunately, its reasoning is intellectually inconsistent and risks backfiring.

Take Mr. Lighthizer's complaints about the dispute-settlement regime. It is true that the WTO has become a more litigious place, but that's only by default because the Doha round of global trade talks failed – an outcome the United States had a hand in. If WTO members had succeeded in upgrading and modernizing the deal, there would be fewer disputes.

And the United States is not just a bystander in the litigation parade. It is the most frequent WTO complainant, filing 115 cases since 1995 (and winning 90 per cent of them). It's also been sued more than any other country (132 times), losing 90 per cent of them. That's partly because it has a track record of ignoring rulings, which often results in multiple decisions in the same case.

Mr. Lighthizer insists he just wants a level playing field for the United States, the world's largest economy and biggest importer. Fair enough, but the U.S. and other developed countries generally didn't abide by that lofty principle when they were on the way up, points out Dan Ciuriak, former deputy chief economist at Canada's Department of Foreign Affairs and International Trade and now a fellow at the C.D. Howe Institute. Now that the United States is firmly at the top of the economic heap, Mr. Lighthizer is essentially "kicking the ladder away" from others, Mr. Ciuriak argues.

Both Mr. Lighthizer and Mr. Trump equate "getting a better deal" to a trade surplus for the United States. But a trade surplus is an ephemeral thing in a world of floating exchange rates. Rival countries can quickly counter an unfavourable trade deal, and tariffs, by devaluing their currencies.

"We just print more bills, devalue our currency and drive up the U.S. dollar, making them uncompetitive, and their 'better deal' evaporates," Mr. Ciuriak points out.

Most economists will tell you that the Trump theory of trade balances is nonsense in a multicountry world. Consider this example cited recently by Yale University economist William Nordhaus: Suppose the United States exports $100-billion of computers to Australia, which exports $100-billion of wheat to China, which exports $100-billion of clothing to the United States. That leaves the U.S. with a large trade deficit with China, but a zero overall trade balance for all three countries.

The rules-based system created by NAFTA and the WTO allow countries, and companies, to do what they do best, where they want. These deals enhance economic certainty for countries and help hedge against bullying and politicized trade attacks.

There was a time the United States saw it that way, too.

BOMBARDIER

THE GLOBE AND MAIL. THE CANADIAN PRESS. DECEMBER 15, 2017. Bombardier, Boeing prepare for final arguments in C Series trade dispute
RYAN REMIORZ

OTTAWA - The bitter dispute between Bombardier and Boeing will enter a critical phase next week, when the two aerospace rivals appear before an all-important trade tribunal – whose ruling will ultimately decide the fight.

The U.S. International Trade Commission will hold hearings Monday in which Boeing will explain why it believes it was hurt – or could be hurt – by Bombardier's landmark deal to sell C Series passenger jets to a U.S. airline.

Bombardier will have its own chance to fire back by arguing that the multi-billion-dollar deal involving up to 125 planes had no impact on Boeing's economic well-being.

Canada's ambassador to the U.S., David MacNaughton, along with his British counterpart, are also expected to attend on behalf of their governments, which support Bombardier.

The hearings mark the last chance for all sides to try to sway the commission before it issues a final ruling, likely in February, which will determine whether every C-Series jet entering the U.S. is hit with a hefty duty.

The U.S. Department of Commerce proposed a 300-per-cent duty after finding that Bombardier broke trade rules, but the penalty will only apply if the trade commission sides with Boeing.

US - CANADA

Global Affairs Canada. December 15, 2017. Canada to welcome U.S. Secretary of State

Ottawa, Ontario - The close partnership between Canada and the United States is built on shared geography, values and economic interests. It allows the two countries to collaborate on important issues, including trade and investment, energy, the environment, border management, defence and security, and global cooperation.

The Honourable Chrystia Freeland, Minister of Foreign Affairs, today announced that she will welcome Rex Tillerson, U.S. Secretary of State, to Ottawa on Tuesday, December 19, 2017.

The visit will be an opportunity for the Minister and Secretary to discuss Canada-United States cooperation on important bilateral, regional and global issues that impact people in both countries.

While in Ottawa, Secretary Tillerson will also meet with the Cabinet Committee on Canada-United States Relations to discuss the two countries’ important security, trade and economic relationship.

Information for media

Media representatives wishing to cover those portions of the visit that are open to the media will be required to show their Canadian Parliamentary Press Gallery credentials. Those who are not members of the Parliamentary Press Gallery or previously accredited for this visit should email marc.fortier@parl.gc.ca for accreditation. A full program will be available and shared via a media advisory on Monday, December 18, 2017.

Quotes

“I look forward to welcoming Secretary Tillerson to Ottawa next week for his first official visit to Canada as secretary of state. His visit is an opportunity to discuss issues of importance to Canadians and Americans and to strengthen our collaboration in addressing regional and global issues.”

- Hon. Chrystia Freeland, P.C., M.P., Minister of Foreign Affairs

Quick facts

• Canada and the United States share values and interests on a range of international issues, including human rights, democracy, development, defence, nuclear non-proliferation and counterterrorism.
• The two countries share the longest secure border in the world, over which approximately 400,000 people, and goods and services worth $2.4 billion, cross daily.
• Canada and the United States share one of the largest trading relationships in the world. Canada is the largest market for the U.S.
• Canada is the number one export destination for most American states, and cross-border trade and investment support nearly 9 million jobs in the United States.

Canada and United States relations: http://international.gc.ca/world-monde/united_states-etats_unis/relations.aspx?lang=eng

CANADA - CHINA

The Globe and Mail. 15 Dec 2017. Two senators’ business venture linked to China 
ROBERT FIFE
STEVEN CHASE

OTTAWA - Two Conservative senators – one with close ties to Beijing – set up a private consulting business this year with partners who are involved in attracting investment from China to Newfoundland and Labrador, corporate records show.

Senator Victor Oh, who recently said he has not conducted any “personal business” in Canada or China since his appointment to the Red Chamber in 2013, formed a St. John’s-based company in April with Senator David Wells.

Mr. Wells would not say whether Signal Hill Management is pursuing business deals with China-based entities.

The two senators’ business partners in Signal Hill Management are Frank Xiaofeng Huang, who once worked for Beijing’s state-owned China Development Bank, and Jack Jun Tan. Little is known about Mr. Tan.

In February, 2017, Mr. Wells helped found the China-Newfoundland and Labrador Business Association (CNLBA), along Mr. Huang and Mr. Tan, according to corporate filings.

Mr. Oh is an unpaid “honorary patron” of this new group, his office said. Mr. Oh, a Toronto businessman appointed to the Senate by Stephen Harper, is a frequent traveller to China and a prominent person at banquets and events in Canada where Chinese diplomats and Communist Party officials are invited guests. He has accepted trips paid for by the governments of Jilin, Hainan and Hubei provinces, as well as business groups and Chinese airlines.

Mr. Oh and two other senators are being investigated by the Office of the Senate Ethics Officer over an all-expenses-paid trip to China in April.

In a Dec. 1 e-mail to fellow senators defending his Chinese travel record, Mr. Oh wrote that “I have never conducted any personal business in China or here in Canada since my appointment to the Red Chamber in 2013.”

The Globe and Mail has reported that since 2006, Canadian MPs and senators have taken 36 trips to China sponsored by arms of the Chinese government or business groups seeking closer ties and trade with the world’s second-biggest economy.

Mr. Oh walked past a Globe reporter on Wednesday and refused to answer any questions about his business activities in Newfoundland. Late on Wednesday evening, Mr. Oh’s assistant e-mailed The Globe to say the senator resigned his directorship in Signal Hill Management, but did not specify what date this took place.

The Senate ethics office would not say when the two senators disclosed their directorships in Signal Hill Management. Senate rules require senators to update their disclosure statements within 30 day of any material change.

“We cannot comment further on the matter at this time, as we are bound by confidentiality under the [Conflict of Interest] Code,” the Senate ethics office said in an e-mail to The Globe.

Senate rules do not bar senators from operating businesses outside their parliamentary duties provided they declare the activities to the ethics office.

Mr. Wells is the former deputy CEO of the Canada-Newfoundland Labrador Offshore Petroleum Board, which manages offshore oil and gas reserves on behalf of Ottawa and the province.

Mr. Wells also would not say whether another company, LH Signal Hill Corp., is doing business with China. Mr. Wells is listed as a director of this company, along with Mr. Huang and Mr. Tan.

Those filings show that Signal Hill Management, LH Signal Hill and CNLBA are located at the same address as Mr. Huang’s home in a suburb of St. John’s – as is Sino-Can Consulting Ltd., which lists Mr. Huang as a director.

Mr. Huang works full time as the business manager for Kvaerner, a Norwegian engineering and construction firm with offices in St. John’s. Before he joined Kvaerner, he worked as loan officer at China Development Bank and at Beijing-based CRC Pinnacle, a consulting firm whose clients included state-owned China Mobile and China Telecom. He did not respond to phone calls or e-mails.

Mr. Huang’s direct supervisor at Kvaerner, Bill Fanning, said he was unaware of Mr. Huang’s business ties with the two Conservative senators. He recalled that he met Mr. Wells and Mr. Oh two years ago when “they were talking to the local Chinese community about opportunities to collaborate.”

The Senate ethics watchdog is investigating an all-expensespaid trip to China by Mr. Oh and Conservative senators Don Plett and Leo Housakos and their spouses to determine whether it should have been declared as a gift or sponsored travel.

Chinese media have reported that Mr. Oh and his Senate colleagues travelled to China in April, 2017, at the invitation of a Beijing-based wealth-management firm that recently opened up an office in Vancouver.

The two-week trip to Beijing and Fujian province was not disclosed to the Senate ethics office as either sponsored travel or a gift. Mr. Housakos gave conflicting accounts of who paid for the trip.

But Mr. Oh later told The Globe and the Senate ethics office that he did not believe the senators had to declare the trip because his “family” picked up the tab for airline tickets, hotels, meals and transportation. The purpose of the trip, he said, was to visit his ancestral home in Fujian province.

FINANCE

BANK OF CANADA. December 14, 2017. BALANCE-2017. Economy making solid progress, but more work to be done, Bank of Canada Governor Poloz says

Toronto, Ontario - The Canadian economy has made excellent progress during 2017, but there is still important work to be done on several longer-term issues, Bank of Canada Governor Stephen S. Poloz said today.

In a speech to the Canadian Club Toronto, Governor Poloz noted that the Canadian economy was the fastest-growing among the Group of Seven economies. Still, issues such as the threat of a cyber attack, high house prices and elevated household debt, and the tough labour market for young Canadians continue to be a preoccupation, he said.

An important role for the central bank is to help promote understanding of economic issues. “Issues that appear daunting often become less so when we understand them better,” the Governor said. “A better understanding of the issues helps everyone—from the various government authorities to the public at large—determine what should be done to resolve them.”

The high degree of connectivity among financial institutions means the financial system can be vulnerable to a cyber attack, the Governor noted. Fortunately, all major participants in the financial system are taking this threat seriously, and the Bank is working to ensure that the system can recover quickly if an attack occurs, he said.

While high house prices and elevated household debt remain a vulnerability, new mortgage guidelines, including the mortgage interest rate stress test, are a positive development. “Testing yourself to make sure you could handle your mortgage payments if interest rates were higher at renewal is a good idea, whether it is a rule or not,” Governor Poloz said.

In terms of employment for young people, the Governor spoke of the importance or reversing a long decline in their labour force participation. While unemployment is a concern across all age groups, “I want to concentrate on young people, for whom a long period of unemployment can leave a scar that could last a lifetime,” Governor Poloz said. Bringing youth back into the labour force will help build economic capacity, he added.

“These are all long-term issues that will continue to be major preoccupations for myself personally, and for the Bank of Canada,” Governor Poloz concluded. “The Bank will continue to work on these issues while doing our part to help bring about a strong and stable economy. This has been the Bank of Canada’s role since our beginning. And it will remain our role for years to come.”

FULL DOCUMENT: http://www.bankofcanada.ca/wp-content/uploads/2017/12/press_141217.pdf

BANK OF CANADA. December 14, 2017. BALANCE-2017. Three Things Keeping Me Awake at Night. Remarks. Stephen S. Poloz - Governor. Canadian Club Toronto. Toronto, Ontario

Introduction

The holiday season is traditionally a time to reflect on the events of the past year, and to look ahead at what may be in store for next year. Speaking from an economic perspective, I think we can look back at 2017 with considerable satisfaction. And 2018 is looking positive, too.

The Canadian economy is on pace for about 3 per cent growth in 2017, which would be the strongest among the Group of Seven economies. Most sectors and regions are now participating. Over 350,000 full-time jobs have been created so far this year, and wages have recently shown signs of picking up. This is supporting robust consumer spending.

Exports and business investment have long been the laggards in our recovery story. Encouragingly, though, business investment has grown for the past three quarters in a row. As well, the government’s infrastructure program is becoming increasingly evident in the data. In contrast, exports have not been stellar. They started the year strong, but faltered during the summer. Nevertheless, the most recent data show a broad-based upturn, supporting our forecast that—after looking through all the noise—exports will continue to be pulled along by rising foreign demand.

That brings me to inflation, our policy anchor. Inflation spent the year within our
1 to 3 per cent target band, although it has tended to fall a little short of the 2 per cent midpoint. We did a lot of work this year to satisfy ourselves that our fundamental understanding of inflation remains valid. It does, once you take account of short-term effects in the data.

I have talked before about the process of bringing the economy back home—at the intersection of full capacity and 2 per cent inflation. Our return home was made even longer by the detour we took when oil prices collapsed back in 2014. But, today, we find ourselves quite close to home, and getting closer, with the economy now running close to full output and inflation expected to be around 2 per cent later in 2018.

That is all good. But as an economist, and as a central banker, I find myself preoccupied with a number of slower-moving, nagging issues that I expect will be with us for a long time. They keep me awake at night because I wonder if we have done all we can to address them. I have chosen three of these things to talk about today.

These personal preoccupations are a little different from the more pressing, immediate risks to the economy that economists usually think about. I can assure you that the Bank is fully engaged on a wide range of such issues, from the effects of technology on inflation to uncertainty over the future of the North American Free Trade Agreement (NAFTA) and the response of housing demand to mortgage rule changes, to cite just a few.

I am not trying to spoil everyone’s holiday cheer with my topic today. Rather, I have found over the years that issues that appear daunting often become less so when we understand them better. What is more, a better understanding of the issues helps everyone—from the various government authorities to the public at large—determine what should be done to resolve them.

So, with that, let me share with you three things that are keeping me awake at night, and bring you up to date on developments surrounding them.

Cyber Threats

The first issue I want to touch on is the potential for a cyber attack that leads to a major disruption of our financial system.

People take for granted the efficiency and convenience of today’s financial system, as they should. It was not all that long ago that your choices for making a retail purchase were a personal cheque, a credit card or cash—and cash was an option only if you remembered to get to your bank branch before it closed. Today, e-commerce is pervasive. People can have electronic access to their accounts instantly, almost anywhere. The infrastructure that underpins our financial system is a public good, every bit as important to the health of Canada’s economy as our roads, bridges and airports.

I am not exaggerating. Every day, Canada’s major payments systems process millions of transactions, large and small, and billions of dollars change hands. These transactions happen so routinely and with such accuracy that it is easy to overlook how critical these systems are. The process looks completely risk-free, but it is not. And to be without these systems for any length of time could have a significant impact on the economy.

Our financial system is as good as it is today because of major advances in communications and financial technology, and a high degree of connectivity between institutions. However, this connectivity also creates a vulnerability. It means that a problem in one institution may spread to others and be amplified. As such, a successful cyber attack on one institution can become a successful attack on many. These attacks can be launched from anywhere and spread across global networks.

The good news is that all the major participants in the financial system are taking this threat very seriously. They are collaborating with each other by sharing information and best practices. As for the key payments systems that connect everyone together, the Bank of Canada has the legislative authority to oversee them and to ensure that they follow strong risk-management practices, including those aimed at preventing cyber attacks. We are also collaborating with partners in the federal government who are working to ensure that Canada is resilient to cyber threats.

However, we cannot assume that our financial system is immune, despite best-in-class cyber defences. We need to be prepared to recover our systems should a cyber attack succeed. The Bank is working closely with our financial institutions and payments systems to ensure that we have robust joint recovery plans in place. Further, the Bank is making significant investments in its own operational redundancies, increasing the resilience of our systems and our people. It is vital that we be able to “fail over” quickly so our key functions will be maintained in the event of a major disruption, be it a cyber attack, natural disaster or some other crisis. This is a matter not just of operational continuity, but of maintaining confidence in our financial system in stressed situations.

The bottom line is that I am confident that we are doing everything we can on this issue. Still, the system may be only as robust as its weakest link, and that keeps me thinking.

High House Prices and Household Debt

My second preoccupation is the state of Canada’s housing markets and the associated level of household debt. The Bank said in last month’s Financial System Review that these vulnerabilities are showing early signs of prospective easing, which is good. However, these vulnerabilities are elevated, and are likely to remain so for a long time. Remember, it took years for these vulnerabilities to build up in the first place.

It is not just the amount of debt; it is also its composition and distribution. More than 80 per cent of household debt is composed of mortgages and home equity lines of credit (HELOCs). Increasingly, mortgages are being combined with HELOCs, to the point where about 40 per cent of all housing-backed loans are blended with a HELOC component.

HELOCs have been a very convenient tool for many households. They give borrowers flexibility to finance renovation projects or handle emergencies—such as when your furnace dies on a cold February night. Their popularity shows how useful these lending arrangements are. However, there are some potential risks that borrowers need to manage.

HELOCs usually allow the borrower to pay only the interest on the loan each month, leaving the principal amount unchanged. Indeed, about 40 per cent of HELOC borrowers are not regularly paying down their principal, which means that debt loads may persist longer than in the past. Furthermore, some may be using their HELOC to speculate—for example, to fund a down payment on a second house with the intention of flipping it. Given the potential for volatility in house prices and for higher interest rates, such activity may be adding to the overall vulnerability of the system.

We have seen several rounds of macroprudential measures to tighten mortgage finance rules. These include measures last year that were aimed at high-ratio mortgages—those where the down payment is less than 20 per cent of the value of the home. Since then, there has been a sharp drop in the number of highly indebted Canadians obtaining these mortgages—and by highly-indebted we have in mind people with a ratio of debt to income that is more than 450 per cent. But we have also seen an increase in low-ratio mortgages with risky characteristics, such as extended amortization periods. New lending guidelines for low-ratio mortgages, which will come into effect next year, should work to limit the number of low-ratio mortgages going to highly indebted households.

These mortgage rule changes will help build up the resilience of the financial system over time, as each new mortgage will be stress-tested to ensure that the borrower can manage a higher interest rate at renewal time. It is important to remember that the purpose of these rule changes is not to control house prices. Ultimately, the laws of supply and demand will determine the direction of house prices.

At the same time, there is little doubt that these rule changes will mean less growth in our housing sector. In the wake of the global financial crisis, ultra-low interest rates have helped our economies weather the storm, but an important by-product has been exceptional growth in housing. For some time now we have been expecting a rotation away from housing and toward other engines of growth, such as exports and investment. We are seeing signs of that fundamental rotation now.

A key issue for the Bank, then, is understanding how people will react when they are told that, under the new rules, they do not qualify for the mortgage they would like. Staff examined data from new mortgages issued last year by federally regulated lenders. They found that about 10 per cent of low-ratio mortgages—around 36,000 loans, representing about $15 billion worth of borrowing—would not have qualified last year under the new stress test.

Of course, there is more than one way for people to respond. The most likely response is for people to look for a less-expensive house with a smaller mortgage so they qualify under the new rules. Others might try to boost their down payment, or delay the purchase until they can do so.

But people might also look for a lender that is not bound by these new mortgage rules so they can avoid facing the stress test. No doubt, certain non-federally regulated lenders will step up to compete for that business, although other regulators may choose to impose the same guidelines. In any event, to those people who hope to avoid the rules, I offer this advice: testing yourself to make sure you could handle your mortgage payments if interest rates were higher at renewal is a very good idea, whether it is a rule or not.

One final issue related to indebtedness—we expect that high levels of debt will make the economy as a whole more sensitive to higher interest rates today than in the past. This issue has obvious implications for monetary policy, so we have done a lot of work this year to enhance our models to capture it. As we said in our October Monetary Policy Report and in our interest rate announcement last week, this is one of the key issues we will be monitoring in real time as we consider the appropriate path for interest rates.

The Tough Job Market for Young People

My third long-term preoccupation is the state of our labour market; specifically, how hard it has been for so many young people to find work. I mentioned earlier that more than 350,000 full-time jobs had been created this year. However, only about 50,000 of those have gone to young workers.

A decade ago, the proportion of people aged 15 to 24 participating in the workforce peaked at almost 68 per cent. That figure hit a trough earlier this year at nearly five percentage points lower—the lowest in almost 20 years. If we could return the youth participation rate to its level before the global financial crisis, more than 100,000 additional young Canadians would have jobs.

Of course, this is not only a problem for youth. We know of people in all age groups who are working part-time when they would prefer a full-time job. We also know people who cannot find jobs that match their skill set and are underemployed. And we know there are people who have lost the job they held for years when their factory closed, and have faced extreme difficulty in finding new work in a similar field. These are all serious concerns. But I want to concentrate on young people, for whom a long period of unemployment can leave a scar that could last a lifetime.

I know there are legitimate explanations for why more young Canadians are staying out of the labour force. Enrolment in post-secondary schooling has increased in recent years, and we expect some of this rise will be permanent. Some of these youth are looking to gain the skills that will match what employers are demanding. There are more than 250,000 job vacancies in the economy today, the highest on record. Canadian business leaders say that most of these vacancies are unfilled because they cannot find workers with the right skills.

Let me suggest that responsibility for addressing this skill mismatch rests with all of us, not just the students and the education system. There surely is room for more ambitious on-the-job training programs in this picture.

This issue is taking on greater urgency because the economy is reaching the stage where more-efficient job matching and increased workforce engagement will be our main means of building economic capacity. With more economic capacity comes the opportunity for more non-inflationary growth and a permanently higher level of Canadian GDP, and more income for everyone. Clearly, that is something worth having.

Let me elaborate. Right now, we are at a point in the economic cycle that I think of as the “sweet spot.” We know that a majority of Canadian companies are running flat out. They may have been hesitating to invest in new capacity until now, perhaps because of lingering economic uncertainty, or concerns over the future of NAFTA, for example. But, despite these uncertainties, companies are moving to expand their capacity now, which augurs well for the future.

Most expansions of capacity have two elements—more capital equipment, and more people. Attracting the right people to new jobs may require higher wages, and this in turn can cause people to re-enter the workforce. We may be seeing early signs of this happening. I mentioned earlier that measures of wages have turned higher over the past couple of months and, in November, the participation rate for young people jumped back to more than 64 per cent. These are encouraging signs, but it will take awhile before they become trends.

The Bank is watching these indicators very carefully at the moment, for they will help us manage the risks that monetary policy faces at this point in the business cycle. Our current policy setting clearly remains quite stimulative. With the economy operating near potential, a mechanical approach to policy would suggest that monetary policy should already be less stimulative. However, as we said in last week’s interest rate announcement, we still see signs of ongoing, albeit diminishing, slack in the labour market.

Fundamentally, this is an exercise in risk management. The facts that the economy is operating near its capacity, and that growth is forecast to continue to run above potential, together pose an upside risk to our inflation forecast. At the same time, our belief that there remains some slack in the labour market poses a downside risk to our inflation forecast. Given the unusual factors at play, the Bank is monitoring these risks in real time—the term we use for this is “data dependent”—rather than taking a mechanical approach to policy setting.

And One More Thing…

So there we have it, three preoccupations that are keeping me awake at night. I could give you even more, but these are my top three, and you do not have all afternoon.

Actually, there is one more thing keeping me awake at night, which perhaps I should mention, and that is all the noise I keep hearing about cryptocurrencies, especially Bitcoin. There is a lot of hype around Bitcoin, and markets are evolving quickly to allow wider access, including to retail investors. So perhaps you will allow me to make a couple of points.

To begin with basics, the term “cryptocurrency” is a misnomer—“crypto,” yes, but “currency,” no. For something to be considered a currency, it must act as a reliable store of value, and you should be able to spend it easily. These instruments possess neither of these characteristics, so they do not constitute “money.”

So, what are cryptocurrencies, exactly? Characteristics vary widely but, generally speaking, they can be thought of as securities. The Canada Revenue Agency agrees. That means, if you buy and sell them at a profit, you have income that needs to be reported for tax purposes. What their true value is may be anyone’s guess—perhaps the most one can say is that buying these things means buying risk, which makes it closer to gambling than investing.

To be absolutely clear, I am not giving investment advice. I never do. All I will say to people intending to buy a so-called cryptocurrency is that you should read the fine print and make sure you know what you are getting into. The Bank of Canada does not regulate these instruments and their markets, just as we do not regulate traditional securities and their markets.

But one question that does preoccupy me is, what does the arrival of cryptocurrencies mean for the cash in your pocket? Supplying the Canadian dollars you need to carry out your business is one of the Bank’s most important mandates.

It is often forgotten that the cash provided by a central bank is the only truly risk-free means of payment. With cash, buyers and sellers can be certain that payment is final. This is an absolutely vital public good, which has always been provided by the central bank. All other payment types, from debit cards to credit cards to cheques, work through intermediaries in the financial system. Yes, of course, they are safe. But, fundamentally, they can never be quite as risk-free as cash. Just ask yourself—if you were concerned that an imminent cyber attack was about to hit the financial system, would you not want to carry some extra cash until everything was back to normal?

Nonetheless, it is natural that transactions using electronic payments, such as debit and credit cards, continue to grow in volume and value relative to cash. It is certainly possible that the demand for digital cash could grow over time. If so, there could be very strong arguments for the central bank to provide it, given its obligation to fulfill the public good function. Bank staff are exploring the circumstances under which it might be appropriate for the central bank to issue its own digital currency for retail transactions. All central banks are researching this. We will have more to say about the subject in the months ahead.

Conclusion

Now I am ready to conclude. Cyber threats, elevated household debt, youth underemployment—these are all long-term issues that will continue to be major preoccupations for myself personally, and for the Bank of Canada.

I hope I have not spoiled your festive, pre-holiday mood by talking about my preoccupations. In case I have, let me repeat that the economy has made tremendous progress over the past year, and it is close to reaching its full potential. We are very encouraged by this, and we are growing increasingly confident that the economy will need less monetary stimulus over time.

Nevertheless, a number of uncertainties remain around our outlook, many of which I have touched on today. As Senior Deputy Governor Carolyn Wilkins said in an important speech last month, it is critical that we take these uncertainties on board in our policy-making. So, allow me to repeat what we said in our interest rate announcement last week: We will continue to be cautious in our upcoming policy decisions, guided by incoming data in assessing the economy’s sensitivity to interest rates, the evolution of economic capacity, and the dynamics of both wage growth and inflation.

By sharing my preoccupations with you today, I hope that I have also raised your understanding of them, so that they appear somewhat less daunting. The Bank will continue to work on these issues while doing our part to help bring about a strong and stable economy. This has been the Bank of Canada’s role since our beginning. And it will remain our role for years to come.

Let me wish you all the best for the holidays, and for a prosperous 2018.

FULL DOCUMENT: http://www.bankofcanada.ca/wp-content/uploads/2017/12/remarks-141217.pdf

The Globe and Mail. 15 Dec 2017. Poloz warns on record household debt levels. Poloz: Governor expresses concern over use of HELOCs to stretch borrowing
BARRIE McKENNA
DAVID PARKINSON

BoC Governor cites concerns as Statscan reports mortgage debt behind borrowing increase, despite rising interest rates

Bank of Canada Governor Stephen Poloz says soaring home prices and record levels of household debt are keeping him awake at night.

In a speech in Toronto on Thursday that was largely upbeat about Canada’s economy, Mr. Poloz nevertheless said he worries the risks associated with record debt levels related to high housing prices “are elevated and are likely to remain so for a long time.” The speech highlighted household debt – along with cyberthreats and lagging youth employment – as the key issues that are stealing his sleep.

His remarks came as Statistics Canada reported that the ratio of household credit-market debt to disposable income – the key gauge for measuring Canadians’ debt loads – rose to a record 171.1 per cent in the third quarter, up from a revised 170.1 per cent in the second quarter (originally reported as 167.8 per cent). Meanwhile on Thursday, the Canadian Real Estate Association (CREA) predicted home sales and prices will fall in 2018 for the first time since the financial crisis.

“Today’s household debt numbers told a familiar story as borrowing once again outpaced disposable income growth,” Royal Bank of Canada economist Josh Nye said in a research report.

Statscan said the main contributor to the increase was mortgage debt, which grew by 1.5 per cent in the third quarter, to $1.38-trillion. Borrowing continued to climb despite rising interest rates on mortgages as the Bank of Canada raised its key rate twice during the quarter, by a total of half a percentage point.

The central bank has long considered the country’s high household debt levels to be the biggest source of vulnerability for country’s economic outlook and financial-system stability. After the debt-to-income ratio flattened a couple of years ago, it surged again last year and has hit record highs the past two quarters.

Mr. Poloz said the central bank is particularly concerned that Canadians are using home-equity lines of credit (HELOCs) to stretch their borrowing dangerously. Mr. Poloz pointed out that 40 per cent of all housingbacked loans are now blended with home-equity lines of credit, on which borrowers can choose to pay only interest and no principle. He added that 40 per cent of HELOC borrowers are not regularly paying down their principal, delaying debt repayment.

“Furthermore, some may be using their HELOC to speculate – for example, to fund a down payment on a second house with the intention of flipping it,” he said.

The warning comes as regulators prepare in January to impose new stress tests that will make it harder for borrowers to qualify for new uninsured mortgages. The bank estimates that about 36,000 loans, or $15-billion worth of borrowing in the past year, would not have been granted under the new restrictions. The rule change is one of the reasons CREA said it expects home sales to fall more than 5 per cent next year while forecasting a 1.4-per-cent drop in prices.

Mr. Poloz maintained that the central bank will take a “cautious” approach to future rate hikes, despite the economy having reached what he described as a point of nearperfect balance, with most companies running at full capacity and inflation nearing the central bank’s elusive 2-percent target.

“We are at a point in the economic cycle that I think of as the “sweet spot,” Mr. Poloz said. “We know that a majority of Canadian companies are running flat out.”

Mr. Poloz has often referred to this economic juncture as “home” and for the first time since becoming Governor in mid-2013, he says Canada is nearly there.

“We find ourselves quite close to home, and getting closer, with the economy now running close to full output and inflation expected to be around 2 per cent later in 2018,” Mr. Poloz said.

The Bank of Canada has raised its benchmark interest rate twice so far this year, lifting it to 1 per cent from 0.5 per cent. At that level, Mr. Poloz said, rates remain “quite stimulative.”

He vigorously defended the bank’s decision not to move faster to get its rate back to neutral, particularly with the economy at or near full capacity. The bank considers 3 per cent to be the point at which its key rate is neither speeding nor slowing economic activity.

“We still see signs of ongoing, albeit diminishing, slack in the labour market,” he said. “Fundamentally, this is an exercise in risk management.”

But at a news conference after his speech, he said the use of the word “cautious” in recent Bank of Canada interestrate announcements “is not a code” indicating the bank would not raise rates again in the foreseeable future. Financial markets have largely interpreted the use of the word as meaning just that – and assuming that as long as the bank is saying “cautious” in the rate announcements, it is not pondering another rate hike.

“My interpretation of the word ‘cautious’ is like it is in the English language: You’re careful, you watch for signs you’re making a mistake,” he said.

Mr. Poloz also issued a warning to people who may be piling into high-flying bitcoin and other so-called cryptocurrencies, insisting they are not currencies at all.

“The term ‘cryptocurrency’ is a misnomer – ‘crypto,’ yes, but ‘currency,’ no,” he said in his speech. “For something to be considered a currency, it must act as a reliable store of value and you should be able to spend it easily. These instruments possess neither of these characteristics, so they do not constitute ‘money.’ ”

The central bank has said it is exploring the possibility of eventually issuing its own digital currency for retail transactions.

Additionally, Mr. Poloz expressed concern about the falling participation of people of ages 15 to 24 in the labour force. The rate has dropped five percentage points, to about 63 per cent, in the past decade, and is now at the lowest level in 20 years.

“If we could return the youth participation rate to its level before the global financial crisis, more than 100,000 additional young Canadians would have jobs,” he said.

REUTERS. DECEMBER 7, 2017. Bank of Canada's Poloz boosts expectations for hike in first quarter
Fergal Smith

TORONTO (Reuters) - The Bank of Canada is increasingly confident the economy will need less stimulus over time, Governor Stephen Poloz said on Thursday in an end-of-year speech that boosted the Canadian dollar and raised expectations of another rate hike early in 2018.

Poloz said the economy was in a sweet spot after making “tremendous” progress over the last year, with early signs that a long-awaited rotation to higher exports and business investment is happening as the housing boom cools.

The economy “is close to reaching its full potential. We are very encouraged by this, and we are growing increasingly confident that the economy will need less monetary stimulus over time,” Poloz said, addressing the Canadian Club in Toronto.

While the central bank held rates steady last week, Poloz acknowledged that current monetary policy “clearly remains quite stimulative” despite rate hikes in July and September, fueling market bets the next hike will come in the first quarter of 2018. The next policy meeting is Jan. 17.

“He was a bit all over the place, but the slight tilt is that he is not as concerned as we thought previously, so yields are quite significantly higher, the loonie is up, January is almost a 35 percent probability right now,” said Fred Demers, chief Canada macro strategist at TD Securities.

“So definitely, the next rate hike is not very far away - whether it is January or March,” Demers added.

The Canadian dollar, known as the loonie, rallied more than one percent on the remarks.

While a mechanical approach to setting policy would suggest rates should already be higher, the bank still sees signs of ongoing but diminishing slack in the labor market, Poloz said.

Canada’s economy is near capacity and growth is forecast to continue above potential, posing an upside risk to the inflation forecast, he said.

At the same time, labor market slack poses a downside risk, Poloz said, reiterating the bank’s oft-repeated concern that the job market is not as strong as employment growth and a steadily declining unemployment rate would suggest.

“Wages, despite the fact that they have upticked, are still well below their typical level at this stage of the business cycle, so we know there is slack underneath there,” he said at a news conference after the speech.

Additional reporting by Andrea Hopkins and David Ljunggren in Ottawa; Editing by Bernadette Baum

REUTERS. DECEMBER 14, 2017. Bank of Canada wants economy to run hot, Poloz says
Reuters Staff

OTTAWA (Reuters) - Bank of Canada Governor Stephen Poloz said on Thursday the central bank continues to see excess capacity in the labor market and would like to see the economy run hot until that slack is absorbed.

“What we want is for the economy to grow hotter for a while, so that it uses up that excess capacity that is still in the labor market. And the way that will happen is companies will invest more, create new capacity, with more people, and raise our level of GDP,” Poloz said in an interview with CBC Television.

Reporting by Andrea HopkinsEditing by Chizu Nomiyama

REUTERS. DECEMBER 14, 2017. Bank of Canada increasingly sure economy will need less stimulus

TORONTO, (Reuters) - The Bank of Canada is growing increasingly confident that the economy will need less stimulus over time, Governor Stephen Poloz said on Thursday, adding that the economy is in a sweet spot after making “tremendous” progress over the last year.

In a year-end speech, Poloz said current monetary policy “clearly remains quite stimulative” despite two interest rate hikes earlier in the year, adding that the economy is close to reaching its full potential.

“We are very encouraged by this, and we are growing increasingly confident that the economy will need less monetary stimulus over time,” Poloz said in prepared notes for a speech to the Canadian Club in Toronto.

While a mechanical approach to setting policy would suggest rates should already be higher, the bank still sees signs of ongoing but diminishing slack in the labor market, Poloz said.

Canada’s economy is near capacity and growth is forecast to continue above potential, posing an upside risk to the inflation forecast, he said. At the same time, labor market slack poses a downside risk.

“Given the unusual factors at play, the bank is monitoring these risks in real time - the term we use for this is ‘data dependent’ - rather than taking a mechanical approach to policy setting,” Poloz said.

Reporting by Fergal Smith; writing by Andrea Hopkins and David Ljunggren

MINING

The Globe and Mail. 15 Dec 2017. Ore exports lift Seaway freight volumes. Demand from China and high commodity prices are among the factors leading to boost in iron shipments
ERIC ATKINS

Asian demand for U.S. iron ore is driving up freight volumes on the St. Lawrence Seaway.

Overall cargo tonnage, including mining products and grain, rose by 8.5 per cent to 33 million tonnes on the water route as of the end of November, from the same period a year ago, the Chamber of Marine Commerce said on Thursday.

Shipments of iron ore pellets, which are used to make steel, rose by 34 per cent to 7.4 million tonnes as China secured raw materials to feed its manufacturing facilities. Demand was also aided by higher commodity prices, Canadian demand for domestic ore and U.S. tariffs that have spurred sales to U.S. mills on the lower Great Lakes.

The Port of Duluth-Superior at the western tip of Lake Superior is one of the main ore hubs on the Great Lakes. Most of the U.S. bulk ships that sail the Great Lakes are too big to traverse the Welland Canal that connects Lake Erie with Lake Ontario, said Adele Yorde, a spokeswoman for Duluth Seaway Port Authority in Minnesota. Instead, smaller ships owned by Canada’s Algoma Central Corp. and CSL Group carry much of the Minnesota ore destined for Quebec City, where it is transferred to ocean-going ships for foreign buyers.

“We’ve seen an increase in the number of Canadian lakers coming in to pick up those pellets this year,” Ms. Yorde said by phone.

A CSL spokeswoman said the company’s ore-export trade is up this year, but below the recent high in 2014.

Iron ore is the third biggest commodity by weight on the Great Lakes-St. Lawrence Seaway, a water route that links North America’s industrial and agriculture centres with overseas markets.

Combined U.S. and Canadian grain volumes declined by 10 per cent to 8.5 million tonnes, according to the St. Lawrence Seaway Management Corp. General cargo, including machinery and project equipment, rose by 28 per cent.

Shipments of such dry bulk commodities as road salt, gypsum and stone climbed by 9 per cent to 9 million tonnes.

The port of Windsor, Ont., posted overall volumes gains of 10 per cent. David Cree, chief executive of the Windsor Port Authority, said salt, general cargo and Ontario grain posted higher tonnages. “We’re also expecting a fair amount of stone to come in December for some additional work scheduled on the truck plaza for the Gordie Howe International Bridge” connecting Windsor and Detroit, Mr. Cree said.

At the Port of Thunder Bay, potash shipments are the strongest in 10 years owing to demand for the fertilizer component from Brazil, Tim Heney, chief executive officer of Thunder Bay Port Authority, said in an interview.

The port on Lake Superior has seen grain shipments rise by 25 per cent since the dismantling of the Canadian Wheat Board’s monopoly in 2012. But 2017 grain volumes are expected to be down slightly by the time the port closes for the season in January, Mr. Heney says, which means overall cargo volumes are expected to little changed from last year.

Mr. Heney said grain shipments have declined in December.

Wade Sobkowich, executive director of the Western Grain Elevator Association, said this is because last year was such a strong year for grain shipments on the Great Lakes. In an interview, he also said service from Canadian National Railway Co. has deteriorated amid a sharp rise in the railway’s container shipment business.

“That could be why we’re seeing a drop at Thunder Bay,” said Mr. Sobkowich, who represents the major grain handling companies, including Viterra Inc. and Cargill Ltd.

About 20 per cent of western Canadian grain is shipped by rail to Thunder Bay, while 70 per cent of it goes to the West Coast.

CN said in November it is hiring crews and making other investments to handle the congestion on its rails caused by higher freight volumes.

The St. Lawrence Seaway closes for the season on Dec. 31 and reopens in March. Ice cover permitting, shipping continues in the lower Great Lakes – Superior, Huron, Erie and Michigan – until mid-January when the Soo Locks close.

MANUFACTURING

StatCan. 2017-12-15. Monthly Survey of Manufacturing, October 2017

• Manufacturing sales: $53.5 billion, October 2017, -0.4% decrease (monthly change)
• Inventories: $74.8 billion, October 2017, 1.6% increase (monthly change)
• Inventory-to-sales ratio: 1.40, October 2017, 0.03 pts increase (monthly change)
• Unfilled orders: $87.3 billion, October 2017, 2.4% increase (monthly change)
• Source(s): CANSIM table 304-0014: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=3040014&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=

Manufacturing sales declined 0.4% to $53.5 billion in October, following two consecutive monthly increases.

Sales fell in 8 of 21 industries, representing 56.0% of the manufacturing sector. Sales of motor vehicles and other transportation equipment accounted for most of the decline in October. Excluding these two industries, manufacturing sales increased 0.5%.

Chart 1: Manufacturing sales decline

In constant dollars, sales decreased 1.5% in October, reflecting a lower volume of goods sold.

Transportation equipment posts the largest decline

Transportation equipment sales declined 5.0% to $9.7 billion in October, mostly due to lower sales of motor vehicle and other transportation equipment.

Sales in the motor vehicle industry fell 6.7% to $4.6 billion, the second consecutive monthly decrease. The decline partly reflected lower volumes generated by decreased production after shutdowns of some assembly plants in October. In constant dollars, sales volumes in the motor vehicle industry fell 7.6%.

Other transportation equipment sales were down 37.2% to $248 million in October. Sales in this industry are volatile compared with sales in the transportation equipment industry as a whole. In constant dollars, sales volume fell 37.9%.

Sales were also down in the chemical (-1.1%) and machinery (-1.4%) industries in October. The declines were widespread and reflected lower volumes of goods sold.

Lower sales in current dollars were partially offset by increases in petroleum and coal (+2.2%) and wood product (+3.4%) industries. After removing the effect of price changes, the volume of sales rose 1.1% and 1.9% respectively in these industries.

Sales down in Ontario

Sales decreased in six provinces in October, led by Ontario.

Sales in Ontario fell 2.2% to $24.0 billion, mainly attributable to declines in the motor vehicle (-7.7%), machinery (-3.6%) and food (-1.4%) industries.

Following three consecutive monthly increases, sales in Quebec declined 0.4% to $13.2 billion, mainly due to the petroleum and coal product and transportation equipment industries. These declines were partly offset by higher sales in the wood product and furniture and related product industries.

In Alberta, sales rose 4.2% to $6.0 billion, following a 1.4% decline in September. Sales were up in 10 of 21 industries, largely driven by higher sales in the petroleum and coal product (+14.7%) and, to a lesser extent, food and fabricated metal product industries.

In British Columbia, sales rose 2.1% to $4.3 billion in October, the third straight monthly increase. Gains were observed in 17 of 21 industries, mainly driven by a 7.0% sales increase in the primary metals industry. Sales were also higher in the paper, wood product and petroleum and coal product industries.

Inventory levels rise

Inventory levels increased 1.6% to $74.8 billion in October, following two consecutive monthly declines. Inventories rose in 16 of 21 industries, with the largest gains in the transportation equipment (+2.8%), primary metals (+2.9%) and machinery (+2.1%) industries.

Chart 2: Inventory levels increase

The inventory-to-sales ratio increased from 1.37 in September to 1.40 in October. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Chart 3: The inventory-to-sales ratio increases

Unfilled orders increase

Unfilled orders rose 2.4% in October to $87.3 billion, following a 1.1% decline in September. The growth in October was mainly attributable to more unfilled orders in the aerospace product and parts industry (+3.1%), which was partially due to the depreciation of the Canadian dollar relative to the US dollar during the month.

Chart 4: Unfilled orders increase 

Unfilled orders also increased in the fabricated metal products, primary metals and machinery industries.

New orders rose 5.3% in October to $55.5 billion, as the aerospace product and parts, primary metals and fabricated metal products industries saw an increase in new orders. This advance was partially offset by a decrease in new orders in the motor vehicle industry.

Chart 5: Evolution of Canadian aerospace industry from 1981 to 2016

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/171215/dq171215a-eng.pdf

REUTERS. DECEMBER 15, 2017. Canada October manufacturing sales unexpectedly fell on weak autos

OTTAWA (Reuters) - Canadian manufacturing sales unexpectedly fell 0.4 percent in October, pulled down by weak sales of autos and other transportation equipment, data from Statistics Canada indicated on Friday.

Analysts in a Reuters poll had forecast a 0.8 percent increase from September. Sales fell in eight of 21 industries, representing 56 percent of the manufacturing sector, while volumes dropped by 1.5 percent.

Motor vehicle sales slumped by 6.7 percent, thanks partly to shutdowns of some assembly plants that cut production of autos. Sales in the other transportation equipment category, which includes bicycles, all-terrain vehicles and tanks, plummeted by 37.2 percent.

In a more promising sign for the economy, new orders rose by 5.3 percent, the most since an 8.0 percent boost in April 2016, on increased demand for aerospace products and parts as well as primary and fabricated metal products.

Inventories rose by 1.6 percent to a record C$74.8 billion ($58.4 billion), with the largest gains in the transportation equipment, primary metals and machinery industries.

Reporting by David Ljunggren; Editing by Steve Orlofsky

The Globe and Mail. 15 Dec 2017. OPINION. The West’s trade Wall

It’s an ugly dispute between old friends who share an undefended border and a free-trade agreement, launched by a pro-business leader known for his pugnacious style and his distaste for anything he considers to be socialism.

Wait. You thought we were talking about Canada, the United States and President Donald Trump? Sorry. Not this time.

This dispute is set in Saskatchewan and is the handiwork of Premier Brad Wall. He announced last week that vehicles with Alberta licence plates would be banned from new provincial government road and infrastructure projects. The move forces Alberta companies that successfully bid on Saskatchewan government contracts to register their vehicles in Mr. Wall’s province.

The Premier says he is retaliating against a move by the Alberta government to keep Saskatchewan companies from bidding on projects in that province, although he has provided little evidence of that happening. He also says Alberta is subsidizing its craft-beer industry at the expense of brewers elsewhere.

Mr. Wall announced earlier this year that he will retire in January, after the Saskatchewan Party elects a new leader. The dust-up he has started will be remembered, badly, as his last act in office.

He insists that he is “a strong supporter of free trade.” But strong supporters of free trade don’t unilaterally start unnecessary spats that catch their partners off-guard, as Mr. Wall appears to have done.

Alberta’s NDP government says Mr. Wall made no effort to contact it before launching his retaliatory strike. Alberta has responded by filing a complaint under the New West Partnership, the free-trade agreement that governs the four western provinces.

This is all so petty. Canada as a whole needs to eliminate provincial trade barriers that can make it more difficult for Canadian companies to do business in this country than in a foreign one. The sight of a premier grandstanding over relatively minor disputes is a reminder of the truism that shortsighted populists are the biggest barriers to free trade.

AVIATION

The Globe and Mail. ASSOCIATED PRESS. 15 Dec 2017. Delta shuns Boeing, orders 100 Airbus jets
DAVID KOENIG

Delta Air Lines Inc. has picked Europe’s Airbus SE over Boeing Co. for a huge order of new jets.

Delta said on Thursday that it will order 100 Airbus A321neo jets with a sticker price of $12.7billion (U.S.) and take an option to buy another 100 jets, a deal that Chicago-based Boeing had hoped to land.

Financial terms of the order were not disclosed so it isn’t known how much Delta will actually pay Airbus. Airlines typically get huge discounts off the sticker price of new planes.

Delta announced the order just before beginning its annual meeting with investors.

Chief executive Ed Bastian told investors that travel demand remains strong both on international and U.S. routes. He said Delta expects fourthquarter revenue for every seat flown one mile – a measure of ticket demand and average fares – to rise about 4 per cent from a year ago, up from Delta’s previous forecast of between 2 per cent and 4 per cent.

Mr. Bastian said Delta’s fourth-quarter operating margin will be around 11 per cent, at the low end of the company’s previous prediction.

Delta’s selection of Airbus jets comes after Boeing challenged a smaller Delta order of planes from Canada’s Bombardier Inc. Boeing charged that the sale price was artificially low and amounted to dumping. The U.S. Commerce Department sided with Boeing and proposed stiff duties on Bombardier jets.

Airbus CEO Tom Enders said the win strengthens a relationship with Delta that his company has built over many years. He said most of the planes would be assembled in Mobile, Ala.

Boeing said it made a “strong but disciplined offer” to Delta. “Delta remains a valued customer, and we’ll continue exploring ways to best meet their needs in the future,” Boeing spokesman Doug Alder said in an e-mail.

Delta said it will begin receiving the 197-seat jets in early 2020 to replace smaller planes.

Boeing’s bid was hurt by the trade fight and a perception that the A321neo could be better than the comparably sized planes in Boeing’s Max lineup, said Richard Aboulafia, an analyst with aviation consulting firm Teal Group.

ENERGY

National Energy Board. December 14, 2017. NEB approves the purchase of the Albersun Pipeline

Calgary – The National Energy Board (NEB) is recommending that NOVA Gas Transmission Ltd. (NGTL) be granted a Certificate of Public Convenience and Necessity to continue operating the 179-kilometre long Albersun Pipeline in Northeastern Alberta. The NEB also approved NGTL’s purchase of the pipeline. NGTL applied to the NEB in 2016 for leave to purchase the line from Suncor Energy Logistics Corporation (Suncor) and continue its operation.

The facilities to be purchased include:

• Suncor Albersun Pipeline – 141 km of 273 mm (NPS 10) pipeline;
• Suncor Mildred Lake Lateral – 5.8 km of 219 mm (NPS 8) pipeline;
• Suncor Gregoire Lateral – 23.4 km of 168 mm and 8.7 km of 89 mm (NPS 3) pipeline;
• Mildred Lake East Sales Meter Station; and,
• Associated pipe and valve facilities.

Should Governor-in-Council approve the project, NGTL will physically isolate the Albersun Pipeline from the Canadian Natural Resources Limited owned pipeline immediately south of NGTL’s Crow Lake Sales Lateral tie-in.  NGTL has no plans for further construction activities associated with the pipeline.

The NEB reviewed this project primarily through a written hearing process, which included written information requests, evidence and final argument. The NEB recognizes that Aboriginal peoples have an oral tradition for sharing information and knowledge. With this in mind, the NEB heard Oral Traditional Evidence from Bigstone Cree Nation in Wabasca, Alberta on June 14, 2017.

The National Energy Board is an independent federal regulator of several parts of Canada’s energy industry. It regulates pipelines, energy development and trade in the public interest with safety as its primary concern. For more information on the NEB and its mandate, please visit www.neb-one.gc.ca

Quick Facts

• The NEB received three applications to participate in the hearing as an Intervenor, including one late application. All applications were accepted along with one application for Commenter status.
• The NEB made up to $80,000 in funding available to support meaningful participation by Intervenors in the hearing process.

Albersun Asset Transfer Project web page: http://www.neb-one.gc.ca/pplctnflng/mjrpp/lbrsnppln/index-eng.html
GHW-001-2016 Recommendation Report [Filing A88632]: https://apps.neb-one.gc.ca/REGDOCS/Item/Filing/A88632

BUDGET

Department of Finance Canada. December 14, 2017. Next Steps of Government's Plan to Build a Stronger Middle Class Receive Royal Assent

Ottawa, Ontario – When you have an economy that works for the middle class, you have a country that works for everyone. The investments the Government of Canada has made in Canadians and their families, in communities and in the economy are working. Almost 600,000 new jobs have been created since 2015 and the unemployment rate is the lowest it has been in nearly a decade. Canada now has the fastest-growing economy in the G7, giving the Government the ability to reinvest the benefits of that growth back into the people who contributed most to that success.

Today, Finance Minister Bill Morneau welcomed the Royal Assent of Bill C-63, which builds on the Government’s commitment to the middle class and puts into place the remaining measures from Budget 2017.

Bill C-63 includes measures that discontinue unpaid internships in federally regulated sectors that are not part of an educational program, and provide labour standard protections to unpaid interns who are part of a formal educational program. The legislation also allows federally regulated workers to ask for adaptable work arrangements from their employers—providing greater flexibility for families, particularly for women, who continue to do the majority of unpaid work in the home.

Quote

“The Government’s ambitious plan to grow Canada’s economy is working, and we want all Canadians to see an impact on their everyday lives. By working together, we are making progress on our government’s plan to strengthen the middle class—the heart of Canada’s economy. Bill C-63 builds on that work by making smart and responsible investments, to ensure that all Canadians can succeed in the economy of tomorrow.”

- Bill Morneau, Minister of Finance

• Budget Implementation Act, 2017, No. 2: http://www.parl.ca/DocumentViewer/en/42-1/bill/C-63/third-reading
• Budget Plan: https://www.budget.gc.ca/2017/docs/plan/toc-tdm-en.html
• Budget Speech: https://www.budget.gc.ca/2017/docs/speech-discours/2017-03-22-en.html
• Fall Economic Statement: https://www.budget.gc.ca/fes-eea/2017/home-accueil-en.html

PROCUREMENT

Innovation, Science and Economic Development Canada. December 14, 2017. Government uses procurement to help small businesses grow and create jobs. Innovative Solutions Canada is a $100-million program to fuel innovation and create middle-class jobs

Ottawa – As the single-largest purchaser of Canadian goods and services, the Government of Canada will use procurement to help Canadian small businesses innovate and create employment opportunities for Canadians.

The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, together with the Honourable Bardish Chagger, Leader of the Government in the House of Commons and Minister of Small Business and Tourism, today announced the $100-million Innovative Solutions Canada program that invites Canadian small businesses to develop novel solutions to challenges proposed by federal departments and agencies.

Whether the challenge is developing a way to make armour more resistant to chemicals or improving wireless connectivity in connected vehicles, the federal department or agency will ask small businesses to innovate and propose a solution. The government will work with the winning business and act as its first customer, helping the companies take their idea to market and advance the next generation of solutions that can become viable commercial products.

Twenty federal departments and agencies will participate in the new program and identify problems spanning the military, economic and environmental sectors.

Innovative Solutions Canada is a key component of the Government of Canada’s Innovation and Skills Plan, a multi-year strategy to create well-paying jobs for the middle class.

Quotes

“Our government’s new Innovative Solutions Canada program is a big winner on several fronts. We’re being proactive and transforming our challenges into opportunities—opportunities for innovation, economic growth and small business success that will result in a vibrant innovation economy and more middle-class jobs for Canadians.”

– The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development

“We believe innovative Canadian small businesses are well positioned to help the government solve some of its more persistent challenges. Through Innovative Solutions Canada, we are asking entrepreneurs to develop new products and services that will help to solve these challenges, while also enabling these entrepreneurs as they work to expand to new markets and sell to new customers around the world. The benefits from this program are clear: the Government of Canada will be able to acquire new products and services that will improve our work, while hard-working small business owners will be able to grow their businesses and create more well-paying middle-class jobs.”

– The Honourable Bardish Chagger, Minister of Small Business and Tourism

“Our community of early-stage investors, incubators and accelerators provides much-needed coaching, connections and capital to Canada’s early-stage companies seeking to grow and scale up. Many times, their ‘first customer’ serves as critical validation that allows these companies to penetrate their markets locally and globally. The Innovative Solutions Canada program announced today will help Canadian companies gain early customer traction while also allowing Canadians to benefit from the adoption of homegrown innovative solutions.”

‑ Sandi Gilbert, Chair of the Board, National Angel Capital Organization (NACO Canada)

Quick Facts

• Program funding will come from the 20 departments and agencies participating in Innovative Solutions Canada. Each department will set aside 1 percent of its research and development expenditures for this initiative.
• Innovative Solutions Canada is modelled on the U.S. Small Business Innovation Research program and is an essential component of the Government of Canada’s efforts to help small businesses.
• Innovative Solutions Canada will encourage submissions from businesses owned and led by women, Indigenous peoples, youth and other traditionally under-represented groups.

CME. December 14, 2017. CME welcomes federal government announcement to encourage SME growth through procurement

OTTAWA (December 14, 2017) – Canadian Manufacturers & Exporters applauds the Innovative Solutions Canada initiative launched today by the federal government. The program dedicates $100 million to encourage entrepreneurship and innovation through government procurement.

“Canadian manufacturers face stiff global competition every day,” said Dennis Darby, President & CEO of CME. “This initiative will encourage small Canadian manufacturers to be more innovative, facilitate commercialization and create jobs across the country, so they can continue to be the heart of our economy.”

CME has long advocated for the government to leverage Canada’s domestic procurement system to foster new product development, innovation and local production in SMEs. Through its extensive research to find solutions to double Canada’s manufacturing output by 2030, Industrie2030, CME found that Canada was lacking behind other markets in terms of its policies to boost innovation and local economic development through it’s purchasing power.

“The initiative announced today is a step toward a national strategy to take advantage of our natural expertise and resources to support domestic and international market growth opportunities,” added Darby. “It gives the signal that Canada stands behind its manufacturers and endorses its innovative new goods.”

The Innovative Solutions Canada program, in alignment with CME’s Women in Manufacturing initiative, also encourage members of under-represented groups to become innovators.

GLOBAL DEVELOPMENT - WOMEN

Global Affairs Canada. December 7, 2017. Address by Minister Bibeau to the Birdsall Conference at the Center for Global Development. Speech. Washington, D.C., United States

Introduction

Thank you for that kind introduction.

Let me begin by thanking Masood, Nancy, and the leadership and scholars of CGD [Center for Global Development] for hosting this important event at such a critical time. To bring together this level of expertise in one place to discuss the links between women’ and girls’ reproductive choices and their economic empowerment is one of the many reasons we appreciate working with the centre.

Today’s conversations are an essential opportunity to highlight the evidence base that demonstrates the importance of sexual and reproductive health and rights for economic empowerment. What is clearer to me, to Canadians, is that we now understand that this link is more than just a correlation.

We now know that SRHR [sexual and reproductive health and rights] leads to economic empowerment. We recognize this in our Feminist International Assistance Policy and our rights-based approach to international development.

I’d also like to acknowledge the advice CGD provided in the lead-up to the peacekeeping summit Canada hosted in Vancouver last month and for your thoughtful input into Canada’s consultations on the development finance institute, which will be operational in the coming months.

The CGD and think-tanks like it are invaluable partners for us as we work toward achieving the Sustainable Development Goals [SDGs], which aim to eradicate extreme poverty by 2030.

The SDGs, poverty and women’s choices

Achieving this goal will be no small feat:

• 700 million people are living on less than $1.90 a day; and
• even more women and girls are facing life choices restricted by social and cultural norms, and economic barriers.

Working together to eradicate poverty in the 21st century means taking a closer look at what we mean by poverty. It isn’t simply living on less than $1.90 a day, it means looking at and understanding poverty in terms of choice and opportunity.

Poverty is also about having unequal access to resources to achieve sustainable livelihoods. It is a lack of capacity and resources to overcome and adapt to climate change. And for far too many women and girls, it is the denial of their agency and autonomy.

With often disproportionate family and economic responsibilities and burdens, the specific needs of women and girls are also under-financed. This ranges from contraception to nutrition, education and skills development, as well as targeted support in humanitarian settings.

This means that donors need to change their approach.

In Canada, we have done this through our Feminist International Assistance Policy, which clearly establishes SDG 5 (achieve gender equality and empower all women and girls) as our entry point for Agenda 2030.

And it is critical that we address the financing gap for achieving the SDGs—something that is estimated at $2.5 trillion per year.

To do this, we need to think, work, finance and deliver development differently.

As we establish new partnerships with non-traditional donors, like private sector businesses and investors, pension funds and philanthropic foundations, we need to make sure that SDG financing is based on a clear understanding of the different needs of women and girls and the different gendered impacts of our policies.

Similarly, a gender-based analysis of development problems and solutions needs to inform our efforts to promote innovation in both developing countries and our partner organizations.

At the same time, these gender-based needs must be given due consideration in legislation, policies, and programs. This is especially important for financial inclusion as well as access to and control over resources.

In countries with a high birth rate, the distinction is significant.

Because, make no mistake: it is impossible to support sustained poverty reduction when half the population is not able to decide about everything from family finances to contraception and education.

One of the most important ways we can reduce poverty and expand economic opportunities for all is to support the sexual and reproductive health choices of women and girls.

Obstacles to empowering women

As it stands, more than 150 countries have laws that actively discriminate against women.

More than 15 million girls are married before they turn 18. And 225 million women don’t have access to the contraceptive method of their choice.

As a result, more than 25 million women and adolescent girls have unsafe abortions every year—an unacceptable and deeply avoidable outcome.

And—shockingly—one in every three women experiences physical or sexual violence.

On the other hand, we know that when legal and social barriers that discriminate against women are eliminated (often through the efforts of women themselves), remarkable change happens: women have better access to opportunities and assets, including capital.

They start businesses and get decent jobs. And they invest the profits in their families and communities.

When women are educated, they are able to make informed choices. Their lives change.

They tend to marry later, have fewer children, provide better health and nutrition for their families and earn more income than women who didn’t have the advantage of schooling.

But access to education needs to go hand in hand with access to sexual and reproductive health care services. We know this from our own experience in Canada.

We also know this through research. Studies in Indonesia demonstrated that local access to family planning helped girls stay in school for almost a full extra year. These interventions were three times as effective to keep girls in classrooms compared to investments made in the quality of their education.

We need to do everything we can to ensure that every pregnancy is wanted, every birth is safe and every girl and woman is treated with dignity and respect.

I mentioned girls for a reason: adolescent girls are often overlooked. They face multiple forms of marginalization based on both their gender and age.

When their needs are ignored, they are less able to access sexual and reproductive health services and make informed choices. This leads to devastating consequences.

If we can help reach these girls, we can begin to interrupt a vicious cycle of poverty and oppression.

Our government wants to see women and girls fully involved in decision making so they can shape the services, programs and policies that affect their lives.

Yet women and girls continue to be left behind, both economically and socially, and even more so, in areas where there is conflict.

It is not accurate to think of women’s rights in opposition to other rights. When anyone has their rights violated, regardless of their gender or any other aspect of identity, we all lose. When hundreds of millions of women are left behind economically, we all suffer. We all lose out on the promise of a more prosperous world.

Women and girls are leaders, workers, investors, innovators, entrepreneurs and peacemakers. We need to better support them as they seek social and economic opportunities.

But it’s not as simple as offering a loan or entrepreneurship training.

Unless we address the unequal distribution of family and community responsibilities, as well as the lack of real choices available to women, we cannot expect to see lasting results.

I firmly believe that a woman’s fundamental right to economic empowerment must include her fundamental right to choose in all areas of her life.

As the United Nation Population Fund, or UNFPA, demonstrated in their 2016 State of the World Population Report, if we can change a 10-year-old girl’s reality to one of choice, the future of the world will be very different indeed.

Our policy

In Canada, the desire to forge a more inclusive, prosperous reality for the world’s poorest people has forced us to rethink our approach to international assistance.

I started my job as minister of international development with a commitment to re-design Canada’s approach to international development.

Based on evidence from consultations with more than 15,000 stakeholders from 65 countries—including the CGD—we launched “Her Voice Her Choice,” Canada’s new Feminist International Assistance Policy in June of this year.

It reflects and supports Agenda 2030, to end poverty and leave no one behind.

The key objective of this new policy is to eradicate poverty and build a more peaceful, inclusive and prosperous world.

And we believe that empowering women and girls is the most effective way of doing this, grounding our efforts through SDG 5 as a means to achieve the SDGs.

For this reason, gender equality and the empowerment of women and girls is the first of six, interrelated action areas for Canadian international assistance. The others are:

• human dignity;
• growth that works for everyone;
• environment and climate action;
• inclusive governance; and
• peace and security.

Gender equality and the empowerment of women and girls is integrated into all of Canada’s programs, including humanitarian support.

Within five years, Canada will devote at least 15% of its bilateral international development assistance to initiatives that directly target gender equality and the empowerment of women and girls.

And by 2022, we will ensure that 95% of Canada’s bilateral international development assistance will either directly target or integrate gender equality and the empowerment of women and girls.

To understand the scope of this change, you need to understand what our starting point was: only 3% of our programming directly targeted gender inequality and roughly one third of all of our projects did not take into account gender equality or analysis.

And as you know, supporting women’s empowerment begins with supporting organizations that champion women’s rights.

That is why we are supporting local women’s organizations through the new $150-million Voice and Leadership initiative. Local organizations not only advocate for women’s rights and access to justice, but also for women’s participation in political and economic life.

Women and girls need a political voice, so they can raise public awareness and change the debate. Women and girls can help their governments and communities to understand the root causes of conflicts, and find solutions that protect the rights and interests of everyone.

Which brings me back to the importance of reproductive choices.

SRHR

For Canada, the link between gender equality and sexual and reproductive health and rights is fundamental. These rights are essential for the enjoyment of all other rights.

Women’s autonomy and opportunity to seize their full potential begins with the right to control their own bodies.

So, in addition to integrating gender equality and women’s empowerment across our entire policy framework, we also make an explicit link between SRHR and each of our action areas.

Sexual and reproductive rights and health are much more than simply a “health” or “women’s” issue. Canada’s Feminist International Assistance Policy recognizes these rights and opportunities as critical for economic development, progress in education, inclusive governance, effective humanitarian action, and peace and security.

As part of our feminist approach, Canada has taken concrete actions to support the full range of sexual and reproductive health services and information.

In March of this year, we committed $650 million to sexual and reproductive health and rights over three years. This support will increase women’s and girls’ access to comprehensive sexuality education, contraception, family planning, safe and legal abortions, and post-abortion care.

It will also support partners who are helping to prevent gender-based violence and harmful practices such as child, early and forced marriage, and female genital mutilation and cutting.

Our aim—just like the theme of your event today—is to address the relationship between women’s reproductive choices and women’s economic empowerment.

SRHR and women’s economic empowerment

We want women and girls everywhere to have control over their own bodies. To be able to decide if, when and with whom they have children, and how many children they want to have. And to get the education to develop their full potential and participate significantly in development in their communities.

We are also committed to addressing unpaid and undervalued work and the disproportionate burden of care shouldered by women around the world. Addressing these persistent inequalities will have a transformative impact on economic growth.

And we need to find other ways to help women who are denied their human rights or who live in situations of conflict where risks to their livelihoods threaten to undo the gains they make.

Canada is deeply committed to improving women’s and girls’ social protection and access to decent work and to helping them become more resilient.

This is especially true for the growing number of refugees and displaced people today.

Recently, I was in Bangladesh talking to Rohingya refugees. I met with them at the border with Myanmar in informal settlements and sitting side by side with their host communities.

The women I met told me about the horrors they were going through: the murders, rapes and houses on fire they had witnessed, the 10 to 12 days it took to get to the border. They were starving and traumatized, and many had been sexually assaulted along the way.

These women and girls need safe environments and psychosocial support.

In a situation like this, we must not lose sight of long-term development planning and not focus only on immediate humanitarian assistance. What is also painfully clear is that the specific SRHR needs of women and girls are often overlooked during humanitarian crises such as this.

Pregnancy and childbirth are particularly dangerous for women and girls during humanitarian crises. It is estimated that under these types of conditions, 500 women and girls die every day from complications related to pregnancy and childbirth. In line with our policy, we now ensure that our humanitarian funding includes provisions for supporting SRHR.

We also use our voice and influence within the humanitarian system to raise the importance of this targeted support with other donors and partners.

Improving our effectiveness

So in our new policy, we explicitly acknowledge the importance of doing things differently and doing things better.

As we adjust and expand our programming to better serve women and girls in developing countries, we know that we must also look inward and improve our effectiveness as a donor.

That means building feminist approaches to innovation and learning into our mechanisms and our partnerships. It means innovative financing, engaging with new partners like the private sector and adapting long-standing strategic partnerships including with research institutions.

The Canadian government is committed to supporting evidence-based decision making—and an important contribution to that process is gender-informed research.

Through partners like CGD, Canada’s International Development Research Centre and others, we want to support research that is anchored in knowledge of local needs and the cultural, social and political dynamics that affect the reality of women and girls.

To continue to make progress, it will be important to provide concrete evidence and to gather support and momentum toward transforming the social norms holding women back.

Canada’s new policy is grounded in inclusion. It is not simply a policy about women and girls.

Our policy is also an opportunity to engage men and boys. Their role is critical for our efforts to change social and cultural norms, especially in relation to power dynamics and issues of consent surrounding sexual and reproductive health and rights.

Conclusion

Colleagues, we know that women and girls already contribute to the economic well-being of their families, communities and countries. And we know the importance of girls and women being able to make reproductive choices.

Now we are purposefully linking these two realities.

The evidence that reproductive choices have an enormous impact on the life choices young women make has never been more compelling.

I want to thank the Centre for Global Development for bringing together researchers and practitioners who want to tackle this essential issue in support of advancing gender equality and empowering women and girls. These discussions are essential for shaping wider global conversations on economic development and influencing the policies that matter most to people’s lives.

I look forward to working with this community to inform Canada’s evidence-based Feminist International Assistance Policy and its implementation in the years ahead.

Thank you.

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LGCJ.: