Feb 12, 2019
The Daily Chase: SNC scandal snowballs in Ottawa; Aurora earnings
By Noah Zivitz
The SNC scandal is still snowballing in Ottawa. Prime Minister Justin Trudeau said yesterday afternoon he welcomes the ethics commissioner’s examination of reports the PMO pressured Canada’s former justice minister to intervene in the corruption case against the engineering giant. Trudeau also acknowledged the situation is stirring economic considerations. “Obviously, I’ve heard from many MPs, I’ve heard from premiers, I’ve heard from Canadians who are aware of the thousands of jobs at SNC-Lavalin and this is an issue that of course we take seriously as a government, but at the same time we ensure that we are upholding the rigour and the independence of our justice system.” We’ll continue chasing perspective on the economic and political stakes in this developing story ahead of a crucial justice committee meeting tomorrow.
AURORA EARNINGS
Aurora Cannabis reported second-quarter revenue yesterday in line with the forecast it released in early January. Meanwhile, cash costs surged 33 per cent and its average selling price for dried cannabis sank 26 per cent. Aurora is also laying claim to 20 per cent market share of recreational sales.
AVERTING ANOTHER SHUTDOWN, MAYBE
U.S. Congressional leaders have reached a tentative agreement on border security funding that could help spare the U.S. from another partial government shutdown later this week. Wild card is U.S. President Donald Trump’s reaction, considering the deal fails to deliver the US$5.7 billion he wants for a border wall. Nevertheless, the agreement is fuelling optimism this morning, with futures pointing to a pop at the start of trading in New York.
OTHER NOTABLE STORIES
-Molson Coors said this morning it will 2016 and 2017 financials can’t be relied upon and will have to be updated. The company says it “identified
errors in the accounting for income taxes related to the deferred tax liabilities for its partnership in MillerCoors, LLC”
-DHX Media swung to a net loss in its second quarter and said this morning it will restructure into two subsidiaries.
-Shopify shares are slipping in pre-market trading despite easily exceeding fourth-quarter profit estimates amid a 54 per cent surge in quarterly revenue. There are some soft spots in the company’s first-quarter outlook (low end of revenue range falls short of estimates, and it’s calling for an operating loss that would be significantly larger than the average estimate).
-U.K. Prime Minister Theresa May will deliver a Brexit update in Parliament later this morning. According to excerpts of her prepared remarks, she’ll say she believes she can deliver a deal that lawmakers can support.
-Advantage Oil & Gas cut its 2019 capex forecast last night and said it identified $100 million in potential deferments that would only have a “minimal” impact on production.
-Cathay Pacific is closing a crew base in Toronto, putting 120 jobs at risk.
NOTABLE RELEASES/EVENTS
-Notable earnings: Shopify, DHX Media, RioCan, West Fraser Timber, Molson Coors
-7:30 a.m. ET: Theresa May addresses U.K. parliament
-10:00 a.m. ET: Parliamentary Budget Officer releases Economic and Fiscal Monitor
-10:30 a.m. ET: Natural Resources Minister Amarjeet Sohi participates in fireside chat at Energy Futures Lab Summit in Calgary (plus avail)
-11:30 a.m. ET: U.S. President Donald Trump holds cabinet meeting at White House
-2:00 p.m. ET: Conservative Party Leader Andrew Scheer delivers remarks, holds news conference in Fredericton
-2:15 p.m. ET: Trump meets with NY Governor Andrew Cuomo at White House
-4:30 p.m. ET: Prime Minister Justin Trudeau and International Trade Diversification Minister Jim Carr make transit infrastructure announcement in Winnipeg (plus avail)
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.
