Noah Zivitz

Managing Editor, BNN Bloomberg

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Oil prices are cratering today (WTI for May delivery was down 37 per cent as of 7:45 a.m. ET)  and Alberta’s premier was making his views known on Twitter late into the night. “Significantly more action is urgently needed to ensure a future for an enormous part of Canada’s economy,” Jason Kenney wrote in his tweetstorm that started with a screengrab of Western Canada Select quoted at -$0.01 per barrel. He was referring to the need for the federal government to go over and above its announcement Friday that included $2.45 billion in funding plus expanded access to the Business Credit Availability Program. When Amanda Lang repeatedly pressed Finance Minister Bill Morneau Friday afternoon about what else is on the way for the energy sector, he wouldn’t offer any details, but did say support for larger companies is “certainly on our agenda.” We’ll chase industry perspective on what needs to be done.

HUSKY SLASHING CAPEX

How’s this for a sign of the times: Husky Energy today announced it’s not planning any additional capital spending on its Western Canadian assets this year, and that production in this country’s energy heartland is already being “reduced or shut in.” Overall, Husky again slashed its capex budget for the year, now down to a range of $1.6-$1.8 billion. It’s also suspending the strategic review of its retail fuel business.

COVID-19 SCUTTLES COUCHE-TARD M&A

Alimentation Couche-Tard announced late yesterday it is giving up (for now) on buying Caltex, saying that due to COVID-19 it is “not in a position to make a revised proposal at this time.” Just over two months ago, Couche-Tard bumped up its offer to the equivalent of almost $8 billion. Despite the virus-related setback, it sure sounds like Couche-Tard isn’t throwing in the towel. “We remain convinced of the long-term financial and strategic merits of an acquisition of Caltex,” CEO Brian Hannasch said in a release. We’ll fold this into a broader discussion this morning with Norton Rose Fulbright global chair Walied Soliman about the pandemic’s impact on deal flow.

OTHER NOTABLE STORIES

-It's been a big day for Shopify on a couple of fronts: it leapfrogged Toronto-Dominion Bank to become the second-most valuable company on the Toronto Stock Exchange, and it also announced the launch of its Shopify Capital program in Canada, in which it's offering up to $500,000 in cash advances to merchants, to be repaid via future sales. Read all about it here

-A&W Revenue Royalties Income Fund and the Food Services company have revealed new details about the extent of the pandemic’s impact on their business. The Food Services unit said sales have plunged approximately 50 per cent and that it requires “significant additional liquidity.” Additionally, the two entities have disclosed the Food Services unit deferred a payment of royalties that were due on Friday. 

-Uni-Select is suspending its dividend (after tomorrow’s payment) as part of its “cash conservation plan aimed at ensuring maximum available liquidity”. 

-CAE announced this morning that, thanks in part to the federal government’s emergency wage subsidy, it has recalled 1,500 workers who had been temporarily laid off. It also said it has a contract with the feds to supply 10,000 ventilators. 

NOTABLE RELEASES/EVENTS

-Notable data: Canadian wholesale trade, Teranet/National Bank home price index

-Notable earnings: PrairieSky Royalty, IBM, Halliburton

-11:15 a.m. ET: Prime Minister Justin Trudeau addresses Canadians from Ottawa

-5:00 p.m. ET: U.S. Coronavirus Task Force holds briefing at the White House

Every morning BNN Bloomberg's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg'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.bnnbloomberg.ca/subscribe.