Noah Zivitz

Managing Editor, BNN Bloomberg

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Airbus is taking control of Bombardier’s CSeries program. In return for the 50.01per cent stake, Airbus will contribute its sales and marketing, procurement management and customer support expertise to the crucial jet program. Airbus shareholders are loving the news, sending the plane maker’s stock up almost four per cent in early trading.

Tons of ground for us to cover today. Here’s some of it:

-The timing. Bombardier CEO Alain Bellemare was asked last night if the partnership was motivated by the Boeing dispute. He said that’s not the case. “When you do M&As, you take the deal when they come and when the stars align,” he said, noting he tried to do a deal with Airbus in 2015, but it didn’t work because Bombardier was shrouded in risk.

-But what about the Boeing dispute? Bellemare said time and time again that the partnership and the dispute with Boeing are two separate processes. For its part, Boeing is deriding the pact as a “questionable deal between two heavily state-subsidized competitors to skirt the U.S. government findings.”

-Alabama. Despite Bellemare’s repeated attempts to distinguish between the deal and the fight with Boeing, he also made no bones about his company’s desire to “explore all options” to ensure access to the U.S. while pointing to Airbus’s plan to do “additional CSeries production” at its plant in Alabama. We’ll chase the state’s governor and senators.

-The details. In additional to control of the CSeries, Airbus is also getting warrants to buy up to 100 million Class B Bombardier shares for $2.29 each. Airbus also gets a call right on Bombardier’s 31 per cent stake in the jet program starting 7.5 years after the deal closes. Likewise, Bombardier gets a put right.

Ultimately, the main issues to consider today are what pushed Bombardier into Airbus’s arms, whether this partnership is the best possible move by Bombardier to ensure the long-term success of the CSeries program and the entire company, and how it will factor into the fight with Boeing.

Taking a step back though, it’s worth considering how this fits with three other headline-grabbing announcements in the last couple of years (Caisse buying 30% Transportation stake; Quebec investing US$1 billion in CSeries program, Ottawa loaning $372.5 million) and wondering if we’ve seen the last of Bombardier’s major strategic announcements.

NAFTA ROUND FOUR WRAPS UP

Have to imagine the CSeries deal runs the risk of adding to an already-tense round of renegotiations between Canada, the U.S. and Mexico. By all accounts, this has been a kitchen-sink style round, with the U.S. staking out its ground on auto manufacturing and sunset clauses. We’ll get updates throughout the day from CTV News’s Richard Madan, and we expect to see a closing news conference in the 3:00 p.m. ET hour.

REGULATORS WARN CANNABIS INDUSTRY ON U.S. REGS 

Canada's securities regulators put publicly-traded cannabis producers yesterday on notice vis-a-vis disclosing direct and indirect business in the United States, noting issuers could be "at risk of being prosecuted and having their assets seized" if federal law is enforced south of the border. “We expect issuers with marijuana-related activities in the U.S. to address the current legal and regulatory environment in their disclosures, including any risks that result from changes in the approach to enforcement of U.S. federal law,” said Canadian Securities Administrators Chair Louis Morisset in a press release. The TSX also warned the sector’s players of possible delisting if they don’t live up to requirements. We'll chase industry reaction. ​

OSFI CRACKS DOWN

Canada's top banking regulator has released its long-awaited new mortgage rules, including stress testing uninsured loans. Greg Bonnell will have all the details today on the station, we'll speak with OSFI Superintendent Jeremy Rudin at 10:30 a.m. ET, gather reaction from industry stakeholders, and then tie a bow on our coverage later today on House Money.

OTHER NOTABLE STORIES:

-Netflix shares are rising in pre-market trading after third-quarter revenue surged 30 per cent and subscriber growth topped expectations. Some interesting commentary in the letter to shareholders about the competitive landscape: “While we have multi-year deals in place preventing any sudden reduction in content licensing, the long-term trends are clear. Our future largely lies in exclusive original content.”  

NOTABLE RELEASES/EVENTS

-Notable earnings: CP Rail, Kinder Morgan, Morgan Stanley, Goldman Sachs, Johnson & Johnson, IBM, CSX

-Notable data: U.S. industrial production

-6:15 a.m. ET: Bank of England Governor Mark Carney testifies before parliamentary committee

-8:30 a.m. ET: OSFI holds media call on an “important publication”

-9:30 a.m. ET: Liberals hold federal cabinet meeting in Ottawa

-9:30 a.m. ET: Conservative Finance Critic Pierre Poilievre holds media avail in House Foyer

-10:00 a.m. ET: Finance Minister Bill Morneau discusses tax plan in Facebook Live event from Montreal  

-2:30 p.m. ET: Justin Trudeau makes announcement in Toronto alongside Premier Kathleen Wynne, Mayor John Tory, Waterfront Toronto CEO Will Fleissig and Sidewalk Labs CEO Dan Doctoroff

-3:00 p.m. ET: Closing statements after round four of NAFTA renegotiations​

-3:30 p.m. ET: Bank of Canada Senior Deputy Governor Carolyn Wilkins speaks on panel at Sibos conference in Toronto

-4:30 p.m. ET: Foreign Affairs Minister Chrystia Freeland to hold media avail in Washington

-9:00 p.m. ET: Xi Jinping opens Communist Party Congress in Beijing

-Fourth round of NAFTA renegotiations scheduled to conclude

-CRTC continues hearing on licence renewals for TV service providers (agenda here) 

Every morning BNN's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.