Wylie Wednesday: Morneau Addressing Canada's Business Community

The Liberal spin machine is in overdrive again this time on the fiscal and finanical front. What two sided message will be sent that none of which will give any confidence to domestic AND foreign investment? With the election less than a year away, larger and more frequent promises (to be broken) were expected. May be the Liberals truly are out of ideas.

"...Trudeau’s finance chief, Bill Morneau, will unveil a fiscal update Wednesday in Ottawa that provides a shot at redemption after warnings about the country’s fading competitiveness. It will likely include incentives for capital investment but not an across-the-board reduction in corporate taxes. The government has frustrated some business leaders with an agenda heavily focused on social issues and riled economists by running unnecessary deficits. Morneau’s last federal budget -- which punted infrastructure investments in favor of new program spending -- landed in February without a mention of U.S. tax reform despite calls to keep pace..." https://www.bloomberg.com/news/articles/2018-11-19/trudeau-seeks-redemption-from-business-leaders-in-budget-update?srnd=premium-canada

All I Want For Christmas Is A Pipeline: US$20 per Barrel of Oil For Our Western Canadian Select? Nope, Now It Is Under US$14....

Look out below....

Bloom Off the Cannabis Industry Stocks? Short Sellers Are Incurring Huge Daily Borrowing Costs To Bet Against Cannabis Names

https://business.financialpost.com/cannabis/cannabis-business/cannabis-investing/investors-are-spending-hundreds-of-millions-to-short-cannabis-stocks-despite-huge-losses#comments-area

"Cannabis shares are mostly owned by retail investors, most of whom do not have the margin accounts necessary to borrow and lend shares, Dusaniwsky said. So high demand and low supply have resulted in borrowing fees that have reached the 30 to 40 per cent range and beyond, in some cases.

Investors looking to short shares of Tilray currently have to deal with a 38 per cent borrow rate, according to S3. With a total short position worth about US$415 million as of Friday, that means shorts altogether are paying approximately US$388,000 per day to short the company."

How Broken is Canada's Oil and Gas Indusrry?

An excellent financial and political summary of how we arrived at this point of ~C$20/barrel of oil, capital flying out of Canada and no pipeline progress so beholden to the USA refiners. 

https://business.financialpost.com/opinion/ted-morton-another-canadian-oil-company-flees-trudeau-and-notley-for-the-u-s#comments-area

Patronization In Its Highest Form: Liberals Decide to Award Benefits To Veterans...But Not Until 2020 (Yes, After the Election)

Are Canadians this blind and stupid to accept such blatant demeaning behaviour? How do the Liberals justify a patting themselves on the back for this one?

Less than one year away from the Canadian election, the Liberals announce this - that should have been solved early in the Liberals's term.

https://nationalpost.com/news/politics/feds-promise-165-million-in-compensation-after-shortchanging-270000-veterans

Accounting for Cannabis: Biological Assets Accounting Renders Cannabis Producers Revenue Before Being Sold

Investors will have to brush up on accounting standards to fully understand how these companies truly operate.  And also to be prepared for when the negative surprises and writedowns happen.

"“Is cannabis ultimately agriculture? Or is it industrial, biotech, or CPG (consumer packaged goods)?,” Rosen said. “There are all sorts of elements in the cannabis ecosystem”"

https://ca.finance.yahoo.com/news/pot-companies-reporting-profit-unsold-bud-totally-legal-130506269.html Cannabis companies are free to book profit on pot that isn’t finished growing and hasn’t been sold. It’s all above board thanks to an accounting rule traditionally applied to assets like live hogs and grapes still on the vine.