By Tegan Valentine
Hello and welcome back to Top Five Friday Finds – the weekly series in which we share five of the business news stories that dominated the papers (and our conversations) this week.
Let’s start things off with one of the week’s bigger stories. On Thursday the Trump administration announced its decision to slap Canada, Mexico and the European Union – the country’s biggest allies – with steep tariffs on steel and aluminum products. President Trump has made no secret of his plan to implement tariffs on metal products, but up until this week the Canada, Mexico and the EU had managed to avoid the United States’ 25% tariff on steel and 10% tariff on aluminum. All three parties immediately snapped back. Jean-Claude Juncker, President of the European Commission, announced that the European Union would move ahead with tariffs affecting an estimated $7.5 billion worth of US exports; Mexico indicated that it would begin to levy tariffs on American farm products; and Canada announced a plan to impose levies on as much as $16.6 billion on U.S. imports, with Foreign Affairs Minister Chrystia Freeland deeming the move Canada’s ‘strongest trade action since the Second World War.
It’s been a rollercoaster ride for Kinder Morgan but it looks like the company’s time with the controversial Trans Mountain Expansion pipeline has come to an end. On Tuesday Federal Finance Minister Bill Morneau arrived in Calgary and announced that Trudeau’s Liberal government had made the decision to purchase the Trans Mountain pipeline project for $4.5-billion.The deal comes just days before Kinder Morgan’s self-imposed ‘do or die’ date of May 31, at which time the company intended to walk away from the perpetually hindered (and increasingly costly) project. The government does not intend to manage the project indefinitely, and senior government officials have indicated that the hunt is on for a new commercial buyer. The Trans Mountain sale is expected to close by August 2018, and while the hope is that another commercial buyer will step in before then, in the absence of another buyer the federal government is willing to pay the entire purchase price. How does Kinder Morgan feel about the deal? In a press release sent out Tuesday, the company stated that the sale represents “the best opportunity to complete TMEP and realize the great economic benefits promised by that project”.
The way in which Canadians enjoy media like television and music is rapidly changing – and it looks like the CRTC is taking notice. On Thursday the Canadian Radio-television and Telecommunication Commission released a report recommending that the Trudeau government consider instituting regulations that would require all online video and music providers pay for the creation (and promotion) of domestic content.The CRTC’s regulation of so-called ‘Canadian content’ or ‘CanCon’ has been a controversial subject since 1968 when the Commission was created to enforce Canada’s Broadcasting Act. Under the Act radio and television broadcasters in Canada must air a certain percentage of content that is at least partly written, produced, presented or otherwise contributed to by persons from Canada. The goal? To ensure that Canadian artists are able to continue creating compelling, high-quality creative content despite our relatively small market size. The CRTC isn’t calling for platforms like Netflix and Spotify to meet the same strict standards conventional media providers are held to – asking Spotify to play 40% Canadian music is a bit unrealistic. But the Commission is calling for changes to be made in response to evolving media consumption trends, namely through the updating of existing service agreements for video and audio providers, and Canada’s CanCon funding structure. The announcement has been met with mixed reviews, but asNDP heritage critic Pierre Nantel stated, “if you still want Canadian content on our screens for the coming years, everyone has to chip in”.
This week Scotiabank made a bigplay and acquired the largest private investment counsel business in Canada. On Thursday Scotiabank and the Canadian Medical Association (CMA) announced that Scotia will acquire MD Financial Management – an investment counsel with more than $49 billion in assets under management. The transaction is set to cost Scotia $2.585 billion, in exchange for 19.7 million common shares at $76.15 per share on a bought deal basis. Private investment counsel businesses are distinct from traditional financial advisor businesses. Unlike financial advisors, investment counsellors tend to work on a salary rather than commission basis, with the ultimate goal of minimizing the potential for conflicts of interest between clients, and and the professionals providing them with investment advice.MD adheres to this model and provides financial planning, insurance, banking, investment and estate and trust services to 45,000 Canadian doctors and 65,000 of their family members.
And finally, as we head into the final month of Q2 2018, it’s time for companies to prepare for annual meetings and board elections. While this is nothing new, this year, company’s will have to consider how they will provide shareholders with information on diversity among directors and members of senior management. The reason? Bill C-25,which amended theCanada Business Corporations Act,theCanada Cooperatives Act, theCanada Not-for-profit Corporations Actand theCompetition Actwhen it received royal assent on May 1, 2018.First proposed back in 2016,Bill C-25is set to make extensive changes to the governance of public corporations in Canada. Of the changes made, one of the more notable is the decision to include diversity disclosure requirements, which will require that public companies set out the demographic framework of senior management.