Good morning all! Shari Kulha here with your daily dose of top business news. Acetylsalicylic acid was patented on this day in 1899 by Bayer. And yesterday some news touched a few pain points: more Trump Tariff Troubles, pipeline consequences, a change in the power balance of miners in emerging economies, and another delay for CN. Take two Aspirin and have a read.
Canada’s biggest export market for oil, the U.S., is set to dramatically ramp up its own exports
and reshape the global oil trade in the next five years. As Geoffrey Morgan reports from Houston, the International Energy Agency’s five-year oil markets outlook predicts the U.S. “dominates oil supply growth” as its production rises 28 per cent to 17 million bpd by 2023, with much of it expected to go to export markets. Canada will be the third-largest source of non-OPEC-oil supply growth in the next five years.
Quote: “Demand has not been this solid and positive in a long while, probably since the last global financial crisis,” OPEC’s Mohammad Barkindo said, adding, “We have seen a very sharp contraction in investment for almost two consecutive, running to three consecutive years.… We are sowing the seeds for a possible – God forbid – future energy crisis.”
Gabe Friedman reports from the Prospectors and Developers Association of Canada conference that frontier markets want “a larger slice of pie” now that a variety of metal prices have risen. The deals struck when prices were low and governments hungry for investment are now earning for the mining companies. Some governments have increased their royalty and ownership demands, but the miners say it’s the cost of doing business on the frontier, even if their risk profile rises.
Quote: Putting some perspective on it, Mark Child, chief executive of Condor Gold, said “governments are financial opportunists, too.” And investor Rick Rule asked the audience what could go wrong — and answered himself: “We don’t have enough time” to go into it.
Grocery stores are stealing restaurant’s best ideas with ready-to-eat meals. The “grocerant” trend has been fuelled by consumers’ need for convenience and desire to eat fresh, high-quality family meals rather than dialing up Domino’s. As Hollie Shaw reports, grocery stores with sit-down dining areas and a lineup of ready-to-eat or take-out meals are becoming more ubiquitous.
Quote: “We want to bring what is great about restaurants into our store. You want to see food being prepared, to smell it being prepared, you want it to be clean, you want great service, and those things are generally not what retail stores are that good at,” said Jeff York, co-CEO of Ottawa-based grocery chain Farm Boy. “In this business you have to evolve, and we have evolved into a food ‘experience’.”
CN’s chief executive has left his position, effective immediately, less than two years into the job. Alicja Siekierska reports that CN is searching for a new CEO after the surprise resignation of Luc Jobin — a move that comes as the railroad grapples with surging demand. RBC analyst Walter Spracklin said that “unfortunately, in 2017 … growth went into overdrive, leading to volume increases above what the company could manage. This led to severe congestion and a deterioration in customer service.”
Quote: “The board believes the company needs a leader who will energize the team, realize CN’s corporate vision and take the company forward with the speed and determination CN is known for,” CN’s board chairman Robert Pace said in a statement yesterday.
Trade is one of the most glaring policy disagreements between Trump and Republican lawmakers. The president refused to back down on proposed steel and aluminum tariffs, even after House Speaker Paul Ryan rejected the plan because the U.S. economy could suffer. Ryan’s office said “the new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.”
Quote: “The idea of imposing steel or aluminum tariffs of any kind is an affront to economic freedom. Tariffs will also harm the pro-growth effects of the tax cuts, stall the economy, incite a trade war and help hand the election to the Democrats,” said conservative group Club for Growth’s president David McIntosh.