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Morning Update: Mexico’s incoming president sees NAFTA movement; Ottawa slashes carbon tax to ease competitiveness concerns

Good morning,

These are the top stories:

Mexico’s incoming president is seeing NAFTA movement

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Incoming Mexican president Andres Manuel Lopez Obrador expects a deal will be reached in the renegotiation of NAFTA in the coming days. U.S. industry sources have said Mexico and the United States are making progress on narrowing their differences over rules for autos, and Canada’s U.S. ambassador said a deal between Mexico and the U.S. on autos would be welcome – Canada has no objections to the direction of the auto negotiations so far (for subscribers).

If it comes to it, Campbell Clark says protecting Canadian dairy isn’t worth souring the chances of a NAFTA deal: “Even giving the United States access to a chunk of Canada’s dairy market would mean a high-stakes political battle. But if Mr. Trump really is willing to drop the poison pills in the end game to NAFTA talks, a concession on dairy could be the best bargaining chip to seal a deal” (for subscribers).

Meanwhile in Florida yesterday, President Donald Trump defended his trade policies during a speech. He said American farmers hurt by retaliatory tariffs from China were bearing up – a sign Trump’s feeling some political heat on the issue.

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Ottawa is slashing the carbon tax to ease competitiveness concerns

The federal government issued new guidelines that will drastically reduce the scope of its planned carbon tax: it will lower the percentage of emissions on which large polluters will have to pay the carbon tax and offer bigger breaks for energy-intensive companies that face tough international competition. The decision follows months of lobbying by industries and comes just as Ontario is backing out of cap-and-trade.

Ottawa issued draft regulations in January indicating companies would have to pay the carbon tax on roughly 30 per cent of their emissions, with a benchmark set at 70 per cent of their industry’s average emissions performance. The new rules to start in January will lower that requirement to pay tax on 20 per cent of emissions, and some particularly vulnerable industries – including cement and steel making – will pay tax on roughly 10 per cent of their greenhouse gas emissions. The federal government will impose the carbon tax in Ontario, as well as in Saskatchewan and – either in whole or in part – in those provinces that do not meet Ottawa’s stringency standards.

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Facebook uncovered a plot to influence the U.S. midterms, including suspicious ads paid for in Canadian funds

The social media firm says it has removed 32 pages and profiles ahead of the November midterm election, including fake accounts that helped organize a protest in Washington, and suspicious American political issue ads paid for in Canadian dollars. The purge is part of Facebook ongoing investigation to avoid a repeat of the 2016 Russian interference in the U.S. presidential election. The executives warned that they are dealing with increasingly sophisticated political operatives, who are finding new ways to abuse Facebook’s platforms.

The Ontario PCs are rolling back Liberal-era social assistance changes

Ontario’s new Progressive Conservative government announced reductions to planned budget increases for Ontario’s two largest social safety net programs and the cancellation of a pilot project to establish a basic income for recipients.

In unveiling those moves, Ontario Social Services Minister Lisa MacLeod said she has asked the province’s Auditor-General to investigate “hundreds of millions of dollars” in fraud in social-assistance payments. The Ford government has given itself until early November to remake Ontario’s social-assistance system, said Ms. MacLeod, calling the current system too disjointed and expensive. NDP Leader Andrea Horwath attacked the move, warning that it would send more people into homelessness.

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IN CASE YOU MISSED IT

Fed up with traffic, contractors refuse to work in Vancouver

Some B.C. tradespeople are opting out of working in Vancouver or charging extra for having to go there. Contractors say a big reason for the premium cost of hiring the trades is the city’s traffic: Vancouver traffic is so congested, and so time-consuming, it makes working there a losing proposition. “Bottom line, as younger people who typically enter the trades move east to afford homes, homeowners in Vancouver will find it exceptionally hard to find competent trades or they will have to pay much higher prices,” said Chilliwack, B.C.-based John Van Kammen, owner of Jovak Landscape & Design.

MORNING MARKETS

Stocks fall

World stocks fell and the U.S. dollar strengthened on Wednesday on fears of an imminent escalation in the U.S.-China tariff war, although strong corporate earnings eased investor concerns about a recent sell-off in the tech sector. On the trade front, Washington is said to be considering boosting tariffs on Chinese goods to 25 per cent from the original threat of 10 per cent. Tokyo’s Nikkei was up 0.86 per cent while Hong Kong’s Hang Seng was down 0.85 per cent. The Shanghai Composite was down 1.80 per cent. In Europe, London’s FTSE 100 was down 0.97 per cent and Germany’s DAX was down 0.29 per cent. The Paris CAC 40 was down slightly at 6 a.m. ET. New York futures were down. The Canadian dollar was at 76.76 US cents.

WHAT EVERYONE’S TALKING ABOUT

Trump could learn something from another disruptor-in-chief

“Recalling Mr. Roosevelt these days is pertinent. Mr. Trump isn’t the only great disruptor to serve in the Oval Office. Mr. Roosevelt threw political conventions overboard. He faced similar obstacles to Mr. Trump and sometimes used similar tactics. But being a man of coherence and a few other qualities we seldom see in Mr. Trump, he made it work.” – Lawrence Martin

Not merely free speech, but better speech needs to be protected on campus

“In the face of language that threatens the humanity of our students, staff or faculty, we must continually promote better speech. This means questioning and challenging opinions with sound arguments and evidence. Students and faculty must be able to share views and experiences while simultaneously committing to high ethical and intellectual standards for open, constructive conversations.” – Deborah MacLatchy, president and vice-chancellor of Wilfrid Laurier University.

Vancouver cracks down on neglectful landlords, opening a path for other cities

“Reclaiming the Regent and the Balmoral won’t solve Vancouver’s well-documented housing crunch on its own. But the expropriations send a bracing message – one that ought to reach other Canadian city councils grappling with similar housing issues.” – Globe editorial

LIVING BETTER

A pilot answers the questions you’ve likely asked yourself on every flight

Why can’t I recline during takeoff? Is the plane supposed to be making that noise? And what the heck is a “crosscheck”? Of course, if you’ve ever flown during a storm, one question drowns out all else: What happens when lightning hits an airplane? Well, now’s your chance to find out (and leave your worries on landing strip). Pilot Patrick Smith explains what’s going on at 35,000 feet.

MOMENT IN TIME

Aug. 1, 1969: After four years of falling sales and prices, Saskatchewan’s farmers were hurting in the late 1960s. Grain stockpiles reached more than 1.3 billion bushels as a combination of increasing yields and lagging sales from the Soviet Union worked to decrease demand. One credit union estimated that 17 per cent of its loans were in arrears. With little money to buy necessities, some parts of the province’s economy turned to barter. In Regina, car dealers were willing to take grain in lieu of cash. Even Saskatchewan sold $400,000 worth of wheat to the Canadian Wheat Board in exchange for several electrical transformers from the federal government. When premier Ross Thatcher (pictured) announced that students would be allowed to pay their fees in wheat, barley or oats, there was far more demand for the scheme than there were spots. On Aug. 1, 1969, about 175 students met the deadline to remit grain bushels for school fees. But after setting a limit of 15,000 bushels in total, the university said it would only accept the 50 neediest cases. Bartering goods for tuition carries on worldwide. Last year, in the midst of a cash shortage crisis, Zimbabwe offered to accept livestock for school fees. – Simona Chiose

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