Where to begin with the scandal over SNC-Lavalin that's engulfing Ottawa?
-Prime Minister Justin Trudeau blasted his former attorney general yesterday evening, saying he was "surprised and disappointed" by Jody Wilson-Raybould's resignation from cabinet in the aftermath of the Globe and Mail's report that she was pressured as AG to intervene in the corruption case against SNC. "Let me be direct," he added. "The government of Canada did its job ... if anyone felt different, they had an obligation to raise that with me. No one — including Jody — did that."
-Today's main event (barring another surprise bombshell) is the House of Commons justice committee meeting at 1:00 p.m. ET, where a decision will be made about whether to call a formal hearing where the main players in this affair of alleged political interference would be called to clear the air. Trudeau warned yesterday "there's a real danger...of unintended consequences" if solicitor-client privilege is waived.
-Meanwhile, The Canadian Press reported last that that Quebec prosecutors could be preparing to lay criminal charges over payments related to SNC’s work on the Jacques Cartier bridge.
-On top of all that, S&P cut SNC's debt rating to BBB- from BBB on the back of the company's latest profit warning. S&P also noted the current corruption case tied to Libya is "an event risk that is likely beyond our rating horizon."
We’ll keep chasing perspective on the stakes for SNC and look forward to unique perspective this morning from former Caisse de Dépôt Deputy Chief Executive Michel Nadeau.
EARNINGS SEASON
Cenovus's operating loss ballooned to $1.67 billion in the fourth quarter amid steep price differentials. The company has set its 2019 capex budget at $1.2-$1.4 billion and is hinting at more asset sales if the price is right. We expect to speak with CEO Alex Pourbaix later today. And we’re also looking forward to speaking with Barrick CEO Mark Bristow on the back of his company’s earnings.
STOCKS EXTEND GAINS
Futures are pointing to a modestly higher open at the start of trading in New York after investors took solace in U.S. President Donald Trump’s softer tone on China yesterday. The U.S. Trade Representative and Treasury Secretary are expected to meet with China’s vice premier tomorrow, where hope will really be put to the test. Separately, Trump wrote in a tweet yesterday evening he’s “looking over all aspects” of the tentative deal on border security funding.
CARBON TAX CONSTITUTIONALITY
The government of Saskatchewan takes its fight over the federally-imposed carbon tax to the provincial court of appeal today, where a two-day reference case to weigh the constitutionality of the contentious levy will begin. “Trudeau’s carbon tax is unconstitutional and fails to respect the sovereignty and autonomy of provinces for matters that fall within our jurisdiction,” Saskatchewan Premier wrote in a tweet yesterday. 16 interveners, ranging from the David Suzuki Foundation to Alberta’s United Conservative Party, will have their say.
OTHER NOTABLE STORIES
-Cenovus's operating loss ballooned to $1.67 billion in the fourth quarter amid steep price differentials. The company has set its 2019 capex budget at $1.2-$1.4 billion and is hinting at more asset sales if the price is right. We expect to speak with CEO Alex Pourbaix later today. And we’re also looking forward to speaking with Barrick CEO Mark Bristow on the back of his company’s earnings and an outlook for higher all-in sustaining costs this year.
-West Fraser Timber’s fourth-quarter profit and sales came in significantly below estimates. CEO Ted Seraphim pointed to a laundry list of challenges: weak lumber prices, production curtailments, and bad weather in the southern U.S.
-In its throne speech yesterday, the B.C. government vowed to "identify the structural causes of money laundering" and said it will "take action" on cell phone billing transparency.
-If you missed it, check out this great Bloomberg feature on a one-seater electric vehicle being manufactured in Vancouver.
NOTABLE RELEASES/EVENTS
-Notable earnings: Cenovus, Manulife Financial, Sun Life Financial, Canaccord Genuity, TMX Group, Barrick Gold, Goldcorp, Kinross Gold, Teck Resources, Cisco Systems
-Notable data: Teranet/National Bank Canadian home price index, U.S. CPI
-10:00 a.m. ET: Ontario Finance Minister Vic Fedeli and Treasury Board President Peter Bethlenfalvy hold avail in Toronto to discuss Ontario's third-quarter finances
-10:30 a.m. ET: Saskatchewan Court of Appeal begins hearing government's reference case on constitutionality of the carbon tax
-11:00 a.m. ET: International Trade Diversification Minister Jim Carr scrums in Winnipeg after delivering remarks on CPTPP
-12:10 p.m. ET: U.S. President Donald Trump meets with Colombia President Ruiz Sandoval in Oval Office
-1:00 p.m. ET: House of Commons justice committee meets regarding reports about political interference in SNC-Lavalin corruption case
-2:00 p.m. ET: U.S. House Financial Services Committee hearing on Access to Banking Services for Cannabis-related businesses
-4:00 p.m. ET: Conservative Party Leader Andrew Scheer holds town hall in Windsor, NB
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.
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