HEADLINES

U.S. Failed to Give Assurances on Tariff Levels, Carney Says

Any trade pact Canada strikes with the U.S. must ensure that agreed-upon tariff levels on certain goods would not be subject to change, Prime Minister Mark Carney said.

Those assurances were not provided in talks last month, Carney said, which then collapsed and triggered new U.S. tariffs on Canadian goods, and proposed retaliatory tariffs from Ottawa set to take effect on Tuesday.

"There needs to be some stability and credibility" in any future trade pact, Carney told reporters at a press event in Thunder Bay, Ontario. He said Canada sought assurances that agreed-upon tariffs on steel, aluminum and automobiles would not be subject to change. The U.S. and Canada had tentatively agreed upon sharp reductions on existing tariffs covering specific sectors, The Wall Street Journal reported.

U.S.-Canada Trade Spat Could Bring More Tariffs Next Week

Canada Goods-Trade Surplus Narrows to Five-Month Low as Exports to U.S. Drop

Canada's goods-trade surplus with the world shrank sharply in July with the largest retreat in U.S.-bound exports in more than a year and despite signs efforts to pivot to new markets are paying off.

Canadian exports overall fell for the first time since January, retreating from a record high the month before, while imports rose a sixth straight month to the highest level on record. This came ahead of what it expected to be fresh volatility in Canadian trade after an escalation in tensions between Ottawa and Washington and a fresh round of tariffs and countermeasures.

Canada recorded a merchandise-trade surplus in July of C$769 million, Statistics Canada said Thursday. That marked a fifth consecutive surplus but the narrowest of the run, following an upwardly revised C$4.2 billion surplus in June.

Exporters Increasingly Looking at New Markets, Survey Finds

Labor Productivity Rose 1% in 2Q, Biggest Gain in Six Years

Monetary Reserves Increased $368 Million in August

Lululemon Cuts Outlook Again After Another Tough Quarter for Sales

Lululemon Athletica cut its outlook for the second time this year following another quarter of declining sales in the company's Americas business.

The activewear retailer said it now expects annual sales to be $10.35 billion to $10.50 billion, down from its previous guidance of $11.00 billion to $11.15 billion.

It also lowered its projection for earnings per share to $9.48 to $9.73, down from $10.95 to $11.15 for the year.

Canada Picks Alstom to Build Passenger Railcars in Multibilllion-Dollar Deal

Prime Minister Mark Carney says the government is making its largest investment yet in a passenger rail as it has tasked Alstom to build 313 coaches.

At an Alstom factory in Thunder Bay, Ontario, Carney said the government would spend about C$4.7 billion to acquire new-generation passenger cars for state-owned Via Rail. Carney said this marks the first time the railcars would be built exclusively in Canada, with work done at the French company's operations in suburban Montreal and northern Ontario.

Michael Keroulle, head of Alstom's operation in the Americas, said this marked "the contract of the decade" for the company. He added the deal would contribute to economic activity in the region, government tax revenue and create hundreds of jobs at Alstom and across its Canadian supply chain.

BRP Raises Full-Year Targets Despite Second-Quarter Loss on Tariff, Supplier Hit

BRP raised its full-year earnings outlook despite swinging to a second-quarter loss, as surging off-road vehicle shipments offset heavy pressure from U.S. metal tariffs and supplier disruptions.

Shares rose 0.7% to C$88.23.

The Canadian maker of Ski-Doos and Sea-Doos said that it now expects revenue of C$9.23 billion to C$9.48 billion, up from last year's C$8.44 billion, and up from a previous expectation of C$9.13 billion to C$9.38 billion.

BRP swung to a net loss of C$136.8 million, or C$1.88 a share, compared with a gain of C$57.1 million, or C$0.79 a share, in the comparable quarter a year ago.

BRP Names Minh Thanh Tran Chief Financial Officer as Sebastien Martel Retires

VersaBank Third-Quarter Profit Rises as U.S. Digital Lending Drives Revenue

VersaBank logged higher profit in the third quarter, driven by the rapid growth of its U.S. digital lending program that helped lift total revenue.

Shares jumped 7% to C$28.30.

For the three months ended July 31, the Canadian business-to-business digital bank posted net income of C$10.1 million, or C$0.31 a share, up from C$6.6 million, or C$0.30 a share, in the comparable quarter a year ago.

Revenue jumped 23% C38.8 million, shy of the C$40.3 million expected by analysts. Growth was driven by the bank's Structured Receivable program in the U.S., its flagship B2B digital lending business, where total assets were US$793 million.

Richelieu Hardware Plans C$15 Million Distribution Center Investment in Quebec

Richelieu Hardware is investing more than C$15 million to upgrade its distribution center in Drummondville, Quebec.

The Canadian specialty hardware store said that the investment will go toward expanding the size of its facility to 180,000 square feet from the current 40,000.

Richelieu aims to increase its distribution capacity to meet growing demand throughout the province.

Richelieu Hardware Acquires Penrod's Hardware Division

5N Plus Wins $7.3 Million U.S. Defense Award to Build Domestic Supply of Semiconductor Components

5N Plus has been awarded $7.3 million by the U.S. Department of War to establish domestic production of gallium arsenide components for U.S. defense applications.

Gallium arsenide is a strategically important semiconductor material used in advanced sensing systems and other devices for defense applications, but the U.S. currently doesn't have a qualified domestic source, forcing defense contractors to rely on foreign suppliers.

The Montreal-based producer of specialty semiconductors and performance materials said that the proposed award would help to establish a qualified U.S. source at its production facility in St. George, Utah, and help address the supply chain gap.

Volatus Aerospace Wins Prequalified Deal for Canada's Defence Drone Initiative

Volatus Aerospace has been selected as a prequalified supplier under Ottawa's Defence Drone Initiative Marketplace.

The Canadian aerospace and defense company said that the selection will allow it to compete for future opportunities involving uncrewed and autonomous systems used by the Canadian Armed Forces and the Canadian Coast Guard.

The new qualification allows Volatus to bid for future government contracts.

TALKING POINT

Canada Doesn't Want to Be the Next Venezuela

By Greg Ip

A few months after capturing Venezuela's leader, President Trump mused about making it the 51st state.

Venezuela didn't end up an American state. It is more of a vassal, or protectorate, or a colony. Call it what you will, it isn't sovereign. Its interim president, Delcy Rodríguez, was installed by the Americans and serves at their pleasure. American troops come and go at will. Its oil revenue flows through the U.S. Treasury. And last week, Trump boasted that the U.S. had taken control of a sizable chunk of its oil reserves at zero cost.

Venezuela is the most extreme manifestation of Trump's "Donroe" doctrine. Under that reformulation of the 1823 Monroe Doctrine, the U.S. seeks dominance of the Western Hemisphere.

Trump has intervened in Argentina's markets to help an ally while meddling in the elections of Brazil and Colombia in hopes of defeating adversaries. In Venezuela, Trump has prioritized control of oil over the restoration of democracy.

Trump's treatment of Venezuela helps explain why Canada broke off trade talks with the U.S. Yet, American officials seem puzzled that Prime Minister Mark Carney would risk trade war given the disproportionate cost Canada is likely to bear. "He's not doing what's best for the Canadian people," Treasury Secretary Scott Bessent declared Monday.

For Carney, it isn't about economic cost, but sovereignty. "No Canadian leader wants to be the Delcy Rodríguez of the North," Chrystia Freeland, Canada's former deputy prime minister, told CNBC last week.

Since World War II, the U.S. pursued trade liberalization as a goal in and of itself, a way to generate mutual benefit and strengthen ties with allies. In that spirit, Canada in the 1980s took what it called a "leap of faith" and negotiated a free-trade deal with the U.S.

President Ronald Reagan described the resulting pact as a "model for the future of this country and the world." A few years later, Mexico joined. The North American Free Trade Agreement was followed by numerous new bilateral pacts slashing trade barriers, including with Colombia, Chile, Peru, and the Dominican Republic, as well as Central America.

When Trump came to office in 2017, he set out to reverse the free-trade tide. His trade representative, Robert Lighthizer, was anti-free trade and pro-tariff. But he also knew his counterparts had to be able to sell a deal politically back home. The resulting U.S.-Mexico-Canada Agreement, which replaced Nafta, and deals with Japan and South Korea favored the U.S., but were nonetheless embraced by its partners.

In his second term Trump's approach was completely different. Not only did he hit almost everyone with steep tariffs, he regularly linked the levies to political or territorial goals. He threatened Colombia with tariffs for refusing to take deportees, Brazil for prosecuting his ally, former President Jair Bolsonaro, and Europe to make Denmark hand over Greenland. He said Canada could avoid tariffs by becoming the 51st state.