CANADA ECONOMICS

NAFTA

The Globe and Mail. 13 Jun 2018. Canada rallies U.S. allies to battle Trump on trade. The Canadian government is leading a multipronged effort to enlist U.S. politicians and businesses in a fight against punitive import taxes U.S. President Donald Trump has slapped on steel and aluminum from Canada.
STEVEN CHASE, OTTAWA
ADRIAN MORROW, WASHINGTON
GREG KEENAN, TORONTO

Foreign Affairs Minister Chrystia Freeland will use a visit to Washington this week to meet with the U.S. Senate foreign affairs committee, chaired by Tennessee Senator Bob Corker, a staunch opponent of the steel and aluminum tariffs.

Ms. Freeland announced on Tuesday she is also trying to arrange a meeting with U.S. trade representative Robert Lighthizer, her counterpart in talks on the North American free-trade agreement, during this two-day trip to Washington. It has been two weeks since the White House stalled NAFTA renegotiations by insisting on an expiry date for any new NAFTA deal, and more than 12 days since the Trump administration imposed hefty tariffs on Canadian steel and aluminum imports in the name of national security.

Natural Resources Minister Jim Carr will meet his counterpart, U.S. Energy Secretary Rick Perry, to talk trade on the margins of the Group of 20 energy ministers’ meeting in Argentina this week.

On Wednesday, Canada’s consul-general to New York, Phyllis Yaffe, will take to the floor of Pennsylvania’s general assembly to talk up the benefits of unfettered commerce between Canada and the United States.

Infrastructure Minister Amarjeet Sohi visited North Dakota’s capital on Monday, where he warned local and state chambers of commerce of the harm the steel and aluminum tariffs would cause.

“We should be removing barriers not creating barriers,” Mr. Sohi said.

On Friday, Agriculture Minister Lawrence MacAulay will host U.S. Secretary of Agriculture Sonny Perdue in Prince Edward Island. Mr. Perdue is considered one of the biggest supporters of NAFTA in the Trump administration.

The effort to persuade the United States to relent comes even as Mr. Trump threatened on Tuesday to escalate the burgeoning trade war. At a news conference in Singapore, Mr. Trump said Canada would pay for Prime Minister Justin Trudeau’s decision to push back on U.S. steel and aluminum tariffs. After his meeting with North Korean dictator Kim Jongun, Mr. Trump said he was surprised last weekend when he watched Mr. Trudeau’s Group of Seven news conference on Air Force One and saw the Prime Minister vow to retaliate against the levies.

“He assumed I was in an airplane and I wasn’t watching. He learned,” Mr. Trump said. “That’s going to cost a lot of money for the people of Canada. He learned. You can’t do that.”

Ms. Freeland on Tuesday played down the barbs as the sort of “drama” she had expected during NAFTA talks.

“Our position really since the U.S. election and certainly since the beginning of the NAFTA talks has been very consistent,” she said in Ottawa. “From day one, we have said that we expected moments of drama and that we would remain – we would keep calm and carry on.”

Mr. Corker is a good ally for Ms. Freeland. Last week, he proposed legislation that would require Congress to approve any tariffs levied under U.S. trade law’s Section 232. That is the national security provision the President used to impose steel and aluminum tariffs on Canada, Mexico and the European Union, and to threaten further tariffs on cars and trucks.

Despite a free-trade consensus among congressional Republicans, Mr. Corker’s bill is the first concrete step the GOP has taken to try to rein in Mr. Trump. Other Republican members of Congress have been reluctant to support it and Mr. Trump has pushed Mr. Corker to withdraw the bill.

Mr. Corker on Tuesday accused other free-trade Republicans of fearing that defying Mr. Trump would cost them their re-election.

“‘We might poke the bear. My gosh, if the President gets upset with us, we might not be in the majority,’ ” Mr. Corker mocked his GOP colleagues in a speech on the Senate floor.

If the bill passes, Mr. Trump could veto it, a move that could only be overridden with a twothirds majority vote of Congress.

Mr. Corker, who invited Ms. Freeland to meet with the foreign relations committee on Wednesday, is not seeking re-election.

One Canadian chief executive in the manufacturing sector who is watching the trade battles said Canada needs to retaliate in part so U.S. consumers feel enough pain that they will rally against Mr. Trump and his administration so they will lift the duties.

Discussions between Mr. Trump and Mr. Trudeau are not going to resolve the disputes, the CEO said.

One of Mr. Trump’s trade advisers, meanwhile, apologized for saying on Sunday there was “a special place in hell” for Mr. Trudeau for opposing Mr. Trump in the trade fight.

“My job was to send a signal of strength,” Peter Navarro said at a conference in Washington on Tuesday. “The problem was that in conveying that message, I used language that was inappropriate and basically lost the power of that message. I own that. That was my mistake, my words.”

Mr. Navarro, a trade protectionist and economic nationalist, is one of the most hawkish figures in the Trump administration. His attack was part of one of the most vicious rhetorical broadsides the United States has ever fired at an ally.

The Globe and Mail. 13 Jun 2018. Donald Trump’s claim that Canada is abusing U.S. farmers doesn’t quite add up. Trump’s claim that Canada is abusing U.S. farmers ignores the full story. McKenna: U.S. farmers hurt? Not by a country mile
BARRIE McKENNA, Columnist

Even in the dairy and poultry industries, which are protected by tariffs of 150 per cent to 300 per cent, it’s hard to make the case that the United States is getting ripped off.

U.S. President Donald Trump has angrily accused Canada of abusing “U.S. farmers, workers and companies” with its steep tariffs on farm products, most notably dairy. Mr. Trump is correct that Canada’s dairy and poultry farmers are heavily protected by a steep tariff wall.

But he’s chosen to focus on a tiny sliver in what is otherwise a deeply integrated and nearly perfectly balanced $60-billion cross-border trade in agricultural and food products. And the United States is far from completely blameless when it comes to keeping certain agricultural products out of its own market, including sugar, peanuts and even dairy.

The real story of Canada-U.S. agricultural trade is that it works pretty well, for both countries.

Canada is the world’s largest customer of U.S. food and farm exports and the second-largest source of those same products imported into the United States. The United States, for example, sold Canada US$3.5-billion worth of fresh fruit and vegetables in 2017, helping to foster a worldscale industry in Florida and California during the cold winter months.

Likewise, Western Canadian grain farmers happen to be really successful at growing oats, which thrive in areas with a cold spring. Many of those same oats come back to Canada in boxes of breakfast cereal.

“That’s kind of the way things have worked out over the years,” explains Ron Bonnett, a cattle farmer from Bruce Mines, Ont., and president of the Canadian Federation of Agriculture. “Whoever can do a good job of growing a product, they get a bit of an edge. It’s mutually beneficial.”

Canada also does well exporting canola, wheat, beef, pork and potatoes to the United States.

Over all, the United States holds a narrow trade surplus with Canada in agricultural products, with exports of US$ 24billion in 2017, including packaged foods, and fresh fruits and vegetables, according to U.S. figures. Canada, in turn, exported US$22-billion of farm products to the United States, led by snack foods, beef, pork and vegetable oils.

“It’s a largely integrated market,” says agricultural economist Al Mussell, lead researcher at Agri-Food Economic Systems, in Guelph, Ont.

“Some of our big consumer brands are American, particularly in packaged foods. And it makes sense that some of those products are manufactured in the U.S. We have trouble getting the threshold scale to do some of that in Canada.”

If there is any inequity, it is that Canada doesn’t process enough of its farm products, according to Mr. Mussell. “We worry a little bit that Canadians are the hewers of wood and drawers of water.”

Even in the dairy and poultry industries, which are protected by tariffs of 150 per cent to 300 per cent, it’s hard to make the case that the United States is getting ripped off. If anyone is being abused by Canada’s supply management system, it’s Canadian consumers, who generally pay much higher prices for those goods at the grocery store than Americans.

The United States enjoys a large trade edge in both dairy and poultry – in part because large-scale Canadian exports are prohibited under World Trade Organization rules because Canadian farmers are paid artificially high prices for most of their milk.

The U.S. domestic dairy market is also “highly protected” through a combination of border tariffs and domestic price supports, according to Mr. Mussell. The United States, for example, imposes a 30-per-cent tariff on imported cheese. And while the U.S. government officially ended the practice of subsidizing farmers for low prices in 2014, Mr. Mussell said U.S. dairy farmers are still getting more than US$ 3billion a year in “price supports” through premium prices paid by the large dairy pools that buy their milk.

The main difference between the two markets is that Canada tightly regulates milk production; the United States does not. And for the past couple of years, U.S. dairy farmers have been producing far more milk than the market needs, forcing its surplus onto world markets. The resulting price collapse has left many farmers in financial trouble in key dairy states, such as Wisconsin and New York.

At the margins, U.S. dairy exporters have been hurt by the Canadian dairy industry’s creation last year of a new class of lower-priced industrial milk to encourage more processing of cheese, yogurt and other products in Canada.

The availability of this cheaper milk in the Canadian market has led to a sharp drop in imports of concentrated dairy protein from the United States. Imports of these products dropped 52 per cent to $61.6-million in 2017.

But that’s a relatively tiny speck in what is a massive twoway flow of food and farm products.

“The big picture is that supply chains in farm and food products … are so highly integrated between the U.S. and Canada,” Mr. Mussell argues. “This other stuff is way down in the weeds.”

Unfortunately for Canada, that is where Mr. Trump has chosen to do battle on trade.

The Globe and Mail. 13 Jun 2018. Canada to Trump: We have politics, too. Any Canadian Prime Minister would have to show some resolve on retaliatory tariffs
CAMPBELL CLARK, Columnist

To hear Donald Trump tell it, Justin Trudeau got too pushy in the G7 press conference he gave after the U.S. President flew away because he “probably doesn’t know Air Force One has about 20 televisions.”

But of course Mr. Trudeau knows. Not specifically, but figuratively. Every Canadian prime minister knows an American president has access to constant information and intel no matter where he is. And every Canadian PM knows U.S. presidents have enormous power to affect Canadians’ lives, even accidentally. They don’t get to forget about that, because it’s a big part of the job.

No, if Mr. Trump really was as offended as he makes out, it wasn’t caused by a Canadian failure to realize that American eyes are watching. It came from an older, more familiar problem: The U.S. President didn’t grasp or care that there’s politics in Canada, too.

It was Mr. Trump’s own Saturday press conference that forced Mr. Trudeau to talk about sunset clauses and retaliatory tariffs, and made it mandatory to express (polite) resolve. There wasn’t really another option for a Canadian politician.

As evidence of that, just look at how politicians of all stripes, including rivals such as Conservative Leader Andrew Scheer and NDP Leader Jagmeet Singh, have expressed shoulder-to-shoulder support for Mr. Trudeau’s position since. They knew voters wanted them to rally round.

The U.S. President ratcheted up the Canuck-baiting Tuesday. The head of his trade council, Peter Navarro, took back his TVtalk-show assertion that “there’s a special place in hell” for Mr. Trudeau, but Mr. Trump told reporters that Mr. Trudeau’s temerity will cost Canadians a lot of money.

He complained again about the press conference Mr. Trudeau gave after the President left the G7 summit early − suggesting the PM expected to sneak in pugnacious phrases while Mr. Trump was on a flight to Singapore.

“I think that Justin probably didn’t know that Air Force One has about 20 televisions,” Mr. Trump said Tuesday.

“I see the television and he’s giving a news conference about how he ‘will not be pushed around’ by the United States. And I say, ‘Push him around? We just shook hands!”’ Mr. Trump said.

Mr. Trump’s complaint is that Canada-U.S. discussions went well behind closed doors at the G7 meeting in La Malbaie, Que., but Mr. Trudeau made it sound different in public.

On Saturday morning, Canadian officials had also expressed a modest new feeling of optimism about talks on the North American free-trade agreement, and that that might be a way of getting an exemption to new U.S. tariffs on steel and aluminum.

There have been reports that Mr. Trump was upset because the President felt that after he had generously agreed to give in on a key Canadian sticking point – the U.S. demand for a sunset clause that would see NAFTA renegotiated after five years – Mr. Trudeau was talking tough. On Tuesday, Mr. Trudeau insisted the U.S. President didn’t take the sunset clause off the table.

Importantly, it was Mr. Trump who delivered a barn-burner press conference, hours before Mr. Trudeau’s. He forced the Canadian PM to react.

For one thing, Mr. Trump told the world that the U.S. and Canada were very close to agreement on a sunset clause – which, if true, would have been an embarrassing climb-down for Mr. Trudeau. Reporters rushed to ask Canadian officials about it. Mr. Trudeau had to unequivocally deny it. So he did.

Mr. Trump’s press conference was also filled with belligerent claims that he had laid down the law on trade, warning that other countries better not follow through with retaliation to his steel tariffs. That was pushy.

When it came time for Mr. Trudeau’s own G7 press conference, the question was always going to be about whether he’d back off retaliatory tariffs. Any Canadian PM would have to show some resolve – Stephen Harper might have chosen more cautious language, but he would have sent the same message. It’s just obvious Canadian politics.


No, it’s not that Mr. Trudeau didn’t understand that the U.S. President might get wind of something he said at a press conference beamed live around the world. It’s that Mr. Trump didn’t understand he put the Canadian PM in a position where he had to.

The Globe and Mail. JUNE 12, 2018. Canada rallying U.S. politicians, businesses to battle Trump on trade
STEVEN CHASE, OTTAWA
ADRIAN MORROW, WASHINGTON
GREG KEENAN, TORONTO, AUTO AND STEEL AND AIRLINE INDUSTRY REPORTER

Foreign Minister Chrystia Freeland at the G7 summit. YVES HERMAN/REUTERS

The Canadian government is leading a multipronged effort to enlist U.S. politicians and businesses in a fight against punitive import taxes U.S. President Donald Trump has slapped on steel and aluminum from Canada.

Foreign Affairs Minister Chrystia Freeland will use a visit to Washington this week to meet with the U.S. Senate foreign affairs committee, chaired by Tennessee Senator Bob Corker, a staunch opponent of the steel and aluminum tariffs.

Ms. Freeland announced on Tuesday she is also trying to arrange a meeting with U.S. trade representative Robert Lighthizer, her counterpart in talks on the North American free-trade agreement, during this two-day trip to Washington. It has been two weeks since the White House stalled NAFTA renegotiations by insisting on an expiry date for any new NAFTA deal, and more than 12 days since the Trump administration imposed hefty tariffs on Canadian steel and aluminum imports in the name of national security.

Natural Resources Minister Jim Carr will meet his counterpart, U.S. Energy Secretary Rick Perry, to talk trade on the margins of the Group of 20 energy ministers’ meeting in Argentina this week.

On Wednesday, Canada’s consul-general to New York, Phyllis Yaffe, will take to the floor of Pennsylvania's general assembly to talk up the benefits of unfettered commerce between Canada and the United States.

Infrastructure Minister Amarjeet Sohi visited North Dakota’s capital on Monday, where he warned local and state chambers of commerce of the harm the steel and aluminum tariffs would cause. “We should be removing barriers not creating barriers,” Mr. Sohi said.

On Friday, Agriculture Minister Lawrence MacAulay will host U.S. Secretary of Agriculture Sonny Perdue in Prince Edward Island. Mr. Perdue is considered one of the biggest supporters of NAFTA in the Trump administration.

Next week, International Trade Minister François-Philippe Champagne will meet in Detroit with the Big Three auto companies and other business leaders. A meeting with the Michigan Governor is “subject to scheduling,” a spokesman said.

Our position really since the U.S. election and certainly since the beginning of the NAFTA talks has been very consistent. From day one, we have said that we expected moments of drama and that we would remain – we would keep calm and carry on.

— Foreign Affairs Minister Chrystia Freeland

The effort to persuade the United States to relent comes even as Mr. Trump threatened on Tuesday to escalate the burgeoning trade war.

At a news conference in Singapore, Mr. Trump said Canada would pay for Prime Minister Justin Trudeau’s decision to push back on U.S. steel and aluminum tariffs. After his meeting with North Korean dictator Kim Jong-un, Mr. Trump said he was surprised last weekend when he watched Mr. Trudeau’s Group of Seven news conference on Air Force One and saw the Prime Minister vow to retaliate against the levies.

“He assumed I was in an airplane and I wasn’t watching. He learned,” Mr. Trump said. “That’s going to cost a lot of money for the people of Canada. He learned. You can’t do that.”

Ms. Freeland on Tuesday played down the barbs as the sort of “drama” she had expected during NAFTA talks.

“Our position really since the U.S. election and certainly since the beginning of the NAFTA talks has been very consistent,” she said in Ottawa. “From day one, we have said that we expected moments of drama and that we would remain – we would keep calm and carry on.”

Mr. Corker is a good ally for Ms. Freeland. Last week, he proposed legislation that would require Congress to approve any tariffs levied under U.S. trade law’s Section 232. That is the national security provision the President used to impose steel and aluminum tariffs on Canada, Mexico and the European Union, and to threaten further tariffs on cars and trucks.

Despite a free-trade consensus among congressional Republicans, Mr. Corker’s bill is the first concrete step the GOP has taken to try to rein in Mr. Trump. Other Republican members of Congress have been reluctant to support it and Mr. Trump has pushed Mr. Corker to withdraw the bill.

Mr. Corker on Tuesday accused other free-trade Republicans of fearing that defying Mr. Trump would cost them their re-election.

“’We might poke the bear. My gosh, if the President gets upset with us, we might not be in the majority,’” Mr. Corker mocked his GOP colleagues in a speech on the Senate floor.

If the bill passes, Mr. Trump could veto it, a move that could only be overridden with a two-thirds majority vote of Congress.

Mr. Corker, who invited Ms. Freeland to meet with the foreign relations committee on Wednesday, is not seeking re-election.

One Canadian chief executive in the manufacturing sector who is watching the trade battles said Canada needs to retaliate in part so U.S. consumers feel enough pain that they will rally against Mr. Trump and his administration so they will lift the duties.

Discussions between Mr. Trump and Mr. Trudeau are not going to resolve the disputes, the CEO said.

One of Mr. Trump’s trade advisers, meanwhile, apologized for saying on Sunday there was “a special place in hell” for Mr. Trudeau for opposing Mr. Trump in the trade fight.

“My job was to send a signal of strength,” Peter Navarro said at a conference in Washington on Tuesday. “The problem was that in conveying that message, I used language that was inappropriate and basically lost the power of that message. I own that. That was my mistake, my words.”

Mr. Navarro, a trade protectionist and economic nationalist, is one of the most hawkish figures in the Trump administration. His attack was part of one of the most vicious rhetorical broadsides the United States has ever fired at an ally.

G7

The Globe and Mail. 13 Jun 2018. OPINION. Why the Group of Seven is a zero
JIM O’NEILL, LONDON, Former chairman of Goldman Sachs Asset Management, former British Treasury Minister and an honorary professor of economics at Manchester University

Though U.S. President Donald Trump’s appearance at the Group of Seven (G7) summit in Quebec last week was not particularly well received, I find myself sympathizing with his skepticism toward the group. I have long doubted that the annual meeting of leaders from Canada, France, Germany, Italy, Japan, Britain and the United States serves any useful purpose.

Back in 2001, when I coined the BRIC acronym, I predicted that the growing economic importance of Brazil, Russia, India and China would eventually require a significant change to global economic governance. At a minimum, I observed global governance bodies should include China, if not all of the BRICs.

At the same time, I pointed out that there was little reason for France, Germany and Italy to be represented individually, given that they share a currency, a monetary policy and a framework for fiscal policy (at least in principle). And I questioned whether Canada and Britain should still be included among the world’s most important economies.

It has now been 17 years and the G7 is still serving little other purpose than to keep its member states’ civil servants busy. Yes, it still comprises the seven Western democracies with the largest economies, but barely so. At this point, Canada’s economy is not much bigger than Australia’s and Italy’s is only slightly bigger than Spain’s.

The G7 is an artifact of a bygone era. In the 1970s, when the G5 was expanded to include Canada and Italy, the new grouping really did dominate the world economy. Japan’s economy was booming and many expected it to catch up to the United States; Italy was growing and nobody was thinking about China. But this year, China is projected to overtake the entire euro zone. And at its current rate of growth, it will effectively create a new economy the size of Italy in less than two years. Moreover, India’s GDP is already larger than Italy’s and crisis-ridden Brazil is not far behind.

In other words, the only global legitimacy that the G7 can claim is that it represents a few major democracies. But 85 per cent of the increase in world GDP (in U.S. dollars) since 2010 has come from the United States and China and nearly 50 per cent from China alone. Another 6 per cent has come from India, while the dollar value of the Japanese and EU economies has actually declined.

In light of these realities, the G7 would be much more relevant if Canada, France, Germany and Italy were replaced by China, India and a single delegation representing the euro zone. But, of course, there is already a body that represents the current G7 countries as well as the BRICs: the G20, which was formed in 1999.

Since its first formal summit in 2008, the G20 has served a clear purpose as a forum for the world’s leading economies. For any smaller club to be justified, it must have the same legitimacy as the G20. Representing the democracies that had the largest economies in the 1970s is no longer good enough.

Mr. Trump provoked outrage when he demanded last week that the G7 reincorporate Russia. But it is worth asking what global challenges the current G7 is even capable of addressing, outside of narrow economic issues. From terrorism to nuclear proliferation to climate change, there are hardly any issues that can be solved without the help of nonG7 countries. And though the Western media depicted Mr. Trump as the black sheep of the summit, Italy, too, now has a government that favours rapprochement with Russia.

The recent G7 circus has added to the impression that Western policy makers are incapable of getting a grip on some of the world’s most pressing issues. To be sure, global financial markets showed little concern about the disarray in Quebec. But, among other things, that may simply reflect the fact that the G7 no longer matters.

Looking ahead, it is clear that the G20 offers a better global governance forum than the G7 does in its current state. Although a greater number of participants makes it harder to reach a viable consensus, it is also much more representative. Most important, the G20 includes the countries that will be indispensable for solving global problems now and in the future.

That said, a smaller, representative group of countries could still have a future role to play alongside the G20. But only if it is properly conceived. To that end, the world’s leading think tanks should start offering specific ideas about the future of global governance.

INVESTMENT

StatCan. 2018-06-13. Canada's international investment position, first quarter 2018

• Canada's net international investment position: $544.2 billion, First quarter 2018
• Source(s): Table 36-10-0485-01: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610048501

Canada's net foreign asset position rose by $110.1 billion to a record $544.2 billion in the first quarter, a second consecutive quarterly increase. This growth mainly reflected the overall upward revaluation effect (+$103.6 billion) of a depreciating Canadian dollar against all major foreign currencies. Over the quarter, the Canadian dollar depreciated against the US dollar (-2.7%), the euro (-5.1%), the British pound (-6.3%) and the Japanese yen (-8.1%).

At the end of the first quarter, 97% of Canada's international assets were denominated in foreign currencies, compared with 40% of Canada's international liabilities. The US dollar was the most important foreign currency of denomination for both international assets (62%) and liabilities (31%).

On a geographical basis, Canada's net asset position with the United States reached $75.2 billion at the end of the first quarter. At the same time, Canada's net foreign asset position with countries other than the United States totalled $469.0 billion.

Chart 1: Canada's net international investment position

Chart 2: Contributors to the change in the net international investment position

Canada's international assets up on a weaker Canadian dollar

Canada's international financial assets rose by $60.6 billion to $4,862.7 billion at the end of the first quarter. The increase was mostly due to the upward revaluation effect (+$159.2 billion) of the depreciating Canadian dollar. The decline in foreign stock prices moderated the overall increase. Over the quarter, the US stock market was down by 1.8% and the European stock market declined by 4.1%.

On an instrument basis, Canadian holdings of foreign direct and portfolio equity instruments increased by $38.8 billion to $3,461.8 billion in the first quarter. Almost 50% of all holdings of foreign equities were in the form of portfolio investment at the end of March 2018, up from a share of just over 40% at the end of 2011.

Canadian holdings of foreign debt instruments were up $21.8 billion in the first quarter to $1,400.9 billion. Other than the revaluation due to the exchange rate movements, strong acquisitions of foreign bonds and an increase in loan assets with non-residents contributed to the gain.

On a geographical basis, Canada's international assets held in the United States were up $45.7 billion to $2,595.9 billion. Comparatively, Canada's international assets in countries other than the United States increased by $14.9 billion to $2,266.8 billion at the end of the quarter.

Chart 3: International assets and liabilities

Canada's international liabilities down on lower Canadian equity prices

Canada's international liabilities were down $49.5 billion to $4,318.5 billion in the first quarter. The decrease mainly resulted from lower Canadian equity prices. Over the quarter, the Canadian stock market was down by 5.2%. This decline was moderated by the upward revaluation effect of the weaker Canadian dollar and, to a lesser extent, inflows of funds from the financial account.

Canadian equity instruments held by foreign direct and portfolio investors decreased by $78.5 billion to $1,818.5 billion in the first quarter, mainly on lower equity prices. The decline was moderated by foreign acquisitions of Canadian equity instruments, mostly from foreign direct investors. About two-thirds of the total foreign investment in Canadian equity was in the form of direct investment at the end of the first quarter.

Canada's gross external debt increased by $29.0 billion to $2,500.0 billion. Other than the effect of the revaluation of the Canadian dollar, the increase was mainly due to large foreign acquisitions of Canadian money market instruments during the quarter.

Canada's international liabilities with the United States were down by $55.6 billion to $2,520.7 billion in the first quarter, mostly on a decline in equity instruments. Comparatively, Canada's international liabilities with countries other than the United States were up by $6.1 billion to $1,797.8 billion. The growth was mostly due to increased foreign holdings of Canadian bonds.

FULL DOCUMENT: https://www150.statcan.gc.ca/n1/en/daily-quotidien/180613/dq180613a-eng.pdf?st=wQiwF68d

Global Affairs Canada. June 12, 2018. Canada and Moldova sign new progressive foreign investment promotion and protection agreement

Ottawa, Ontario - ‎Expanding and diversifying trade and investment initiatives are at the heart of Canada’s progressive trade agenda, which aims to grow the country’s economy and directly benefit hard-working Canadians. Canada and Moldova have enjoyed over 25 years of evolving commercial relations, and both countries are committed to working together to make their international trade and investment policies more transparent, progressive and inclusive.

Today, the Honourable François-Philippe Champagne, Minister of International Trade, and Tudor Ulianovschi, Minister of Foreign Affairs and European Integration of the Republic of Moldova, met in Ottawa to sign the Foreign Investment Promotion and Protection Agreement (FIPA) between Canada and Moldova, along with a joint declaration on progressive and inclusive trade.

During the visit, the two ministers discussed how the agreement will deepen economic ties and expand investment opportunities for businesses in both countries. This bilateral FIPA marks an important step in Canada’s burgeoning ties with Moldova.

The FIPA will provide greater predictability and certainty for Canadian investors considering investments in Moldova and for Moldovan investors in Canada. Through this new agreement, parties also commit to working together to make their trade and investment policies more progressive and inclusive so that all members of society, particularly women, can expand their roles in creating economic growth.


Quotes

“Through this new agreement, Canada has made a strong commitment to strengthen its economic partnership with Moldova and to ensure that both Canadian and Moldovan businesses can benefit from opportunities to foster greater investment between our two countries. Moldova, like Canada, is a member of the World Trade Organization and La Francophonie, and this agreement marks another important step in Canada’s relationship with Moldova.”

François-Philippe Champagne, Minister of International Trade

Quick facts

• A FIPA is a bilateral agreement in which signatory countries commit to provide greater predictability and certainty for each other’s investors.
• In 2017, two-way merchandise trade between Canada and Moldova totalled almost $15 million.
• Canada and the Republic of Moldova established diplomatic relations in 1992 and, in 2017, celebrated 25 years of diplomatic relations.
• Canada is represented in the Republic of Moldova through the Canadian embassy in Bucharest, Romania.

FULL DOCUMENT: https://www.canada.ca/en/global-affairs/news/2018/06/canada-and-moldova-sign-new-progressive-foreign-investment-promotion-and-protection-agreement.html

NOMINATION

Department of Finance Canada. June 13, 2018. Minister Morneau Announces Appointments to the Royal Canadian Mint Board of Directors

Ottawa, Ontario – The Government of Canada is committed to an open, transparent and merit-based selection process for Governor in Council appointments—one that will result in highly qualified candidates able to best serve the interests of Canadians.

In keeping with this commitment, Finance Minister Bill Morneau today announced the appointments of Ms. Fiona L. Macdonald, Dr. Sandip K. Lalli and Dr. Gilles Patry to the Board of Directors of the Royal Canadian Mint. These appointments are for four years.

Ms. Macdonald serves as an Independent Director on the Board of GMP Capital, and is Chair of its Management Resources and Compensation Committee, as well as a member of its Audit Committee and Governance and Nominating Committee. She is also a Director at the BC Ferry Authority and the Chair of the BC Chapter of the Institute of Corporate Directors.

Dr. Lalli currently serves as the President and Chief Executive Officer of the Calgary Chamber of Commerce. She is a veteran business strategist and senior executive professional with multifaceted experience as both an independent entrepreneur and an executive in international corporations in the agriculture, financial markets, and oil and gas industries.

Dr. Patry is the Executive Director of the U15 Group of Canadian Research Universities and the former President and Chief Executive Officer of the Canada Foundation for Innovation. Dr. Patry also served as President and Vice-Chancellor of the University of Ottawa.

Quote

"I wish to congratulate the candidates on their successful appointments to the Board of Directors of the Royal Canadian Mint. Their diverse backgrounds and extensive experience will be an asset to the Board, and I wish them great success in these new roles."

- Bill Morneau, Minister of Finance

Quick Facts

• The Royal Canadian Mint is the Crown corporation responsible for the minting and distribution of Canada's circulation coins.
• The Mint is recognized as one of the largest and most versatile mints in the world, offering a wide range of specialized, high quality coinage products and related services on an international scale.

FULL DOCUMENT: https://www.fin.gc.ca/n18/18-047-eng.asp

BANK OF CANADA. June 13, 2018. Deputy Governor Sylvain Leduc to leave the Bank of Canada

Ottawa, Ontario - The Bank of Canada announced today that Deputy Governor Sylvain Leduc will leave the Bank in late July 2018. Mr. Leduc will return to San Francisco with his family to resume working at the Federal Reserve Bank of San Francisco.

Mr. Leduc was appointed Deputy Governor of the Bank of Canada in May 2016 and has been one of two deputy governors responsible for overseeing the Bank’s analysis and activities in promoting a stable and efficient financial system. Before his appointment to the Bank of Canada, Mr. Leduc served as Vice President, Microeconomic and Macroeconomic Research at the San Francisco Fed—a position he had held since 2013.

Governor Stephen S. Poloz thanked Mr. Leduc for his important contribution to the Bank’s policy and its research during his time at the Bank of Canada.

“Sylvain has been a wonderful addition to Governing Council. We have benefitted from his policy expertise and his strong sense of teamwork,” Governor Poloz said, “Sylvain’s motivation and leadership has had a powerful impact on our researchers and on the Bank’s capacity as a research institution. While we are sorry to say good-bye to this brilliant Canadian, we wish him every success in his future career in central banking.”

The process to appoint a new Deputy Governor will begin immediately. The Board of Directors will form a selection committee to conduct the search and selection process, with the assistance of global executive recruiting firm Boyden. Public advertisements for the Deputy Governor position will be published on the Bank's web site, as well as in major media outlets.

________________

LGCJ.: