Apr 27, 2017
BNN's Daily Chase: Trump changes his mind on NAFTA, Ontario set to table budget
By Andrew Bell
TRUMP STAYING WITH NAFTA — FOR NOW
BNN is focused today on helping investors to position their holdings in the face of an unpredictable Washington.
Trade lawyer Lawrence Herman of Herman & Associates told us this morning that U.S. President Donald Trump’s apparent about-face on the North American Free Trade Agreement looks like a ploy. Trump told Canada and Mexico yesterday that he will not terminate the treaty right now but will move quickly to begin renegotiating. That’s after White House officials said he was considering an executive order to withdraw the United States from the pact.
“I think that it was an orchestrated leak to put pressure on Canada and Mexico,” Herman tells segment producer Adena Ali.
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MORE ON THE LUMBER DISPUTE
At 3:30 p.m. ET, we’ll get perspective on the lumber dispute from former federal trade minister, Jim Peterson, who has been name Ontario’s chief negotiator on the issue.
Peterson, a veteran of the softwood wars, promises that “I can fight for a good deal for Ontario.”
He’s a canny old hand and will probably sing from a songbook of Canadian unity on the issue. But segment producer Michelle Zadikian wants to explore one issue: Softwood producers aren’t perfectly aligned.
"The last softwood lumber trade arrangement between Canada and the United States was incredibly destructive, particularly for central Canada,” Resolute Forest Products (RFP.TO) chief executive officer Richard Garneau complained last fall. “The previous Government of Canada not only agreed to limiting access, through quotas and taxes, it also paid over $1 billion ‘in ransom’ to the U.S. softwood lumber producers, financed by Canadian workers.”
He said Western producers are in a different position because they have access to Asian markets and have bought 39 sawmills in the United States that “afford them an important measure of insulation from future restrictive measures.”
Resolute is the largest producer of softwood east of the Rockies. BNN has repeatedly asked Garneau to come on the channel to discuss his stance but he hasn’t made himself available. We’ll keep trying.
CEOs who are joining us today include Paul Conibear of Lundin Mining (LUN.TO.) His bank account is stuffed: Scotia sees US$438 million or $0.60 per share in free cash flow in free cash flow this year. After Lundin’s sale of its stake in the Tenke Fungurume cobalt-copper mine in the Democratic Republic of the Congo, Scotia says, “we anticipate the company to exit 2017 in a net cash position of US$1.3 billion or $1.79. The stock traded yesterday in Toronto at Cdn$7.52, up 71 per cent in a year.
Scotia says it doesn’t expect a special dividend from Lundin. We’ll ask Conibear what he plans to do with all of that ready money.
CROSS-CANADA PERSONAL FINANCE UPDATE
ONTARIO TO TABLE BUDGET
Finally, speaking of spending, Ontario is set to produce a budget at 4 p.m. ET today that is scheduled to end almost a decade of deficits. Premier Kathleen Wynne has seen her popularity slide and Finance Minister Charles Sousa is expected to come up with goodies in advance of this summer’s election, including new money for health care.
Robert Kavcic, senior economist at BMO Capital Markets, will give us analysis at 4:20 p.m. ET and Minister Sousa will be on BNN tomorrow morning.
Every morning Commodities host Andrew Bell 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.