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Morning Update newsletter: BC Liberals win minority; Trump fires Comey; Home Capital gets lifeline

BC Liberals win minority government, Greens hold balance of power

Christy Clark’s BC Liberals have been reduced to a minority government, with the Greens holding the balance of power. The Liberals picked up 43 seats, the NDP won 41 and the Greens won 3. But there are a handful of close ridings that could alter the results, including Courtenay-Comox, which the NDP won by nine votes. There are two other ridings that were won by fewer than 200 votes, one going to the NDP and the other to the Liberals. The final seat tallies may not become clear until absentee ballots are counted between May 22-24. If the Liberals are unable to hit the magic number of 44, it will be the province’s first minority government since 1952. Green Party Leader Andrew Weaver declined to throw his support behind either Liberal Leader Christy Clark or NDP Leader John Horgan, saying nothing can be decided until all the votes are counted.

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Trump fires Comey

James Comey’s tenure as FBI director is over. Donald Trump fired him yesterday as the intelligence agency probes whether the President’s election campaign had ties with Russia. “While I greatly appreciate you informing me, on three separate occasions, that I am not under investigation, I nevertheless concur with the judgment of the Department of Justice that you are not able to effectively lead the bureau,” Trump wrote in a letter to Comey.

The decision to let him go raises questions about the fate of the FBI investigation, as well as a concern that Trump is using his power to get rid of a potential threat. And while Comey had come under fire from both parties over his handling of the Hillary Clinton e-mail probe, Democrats denounced Trump’s decision. Some compared it to Richard Nixon firing the independent special prosecutor overseeing the Watergate investigation.

U.S. withdrawal from NAFTA is back on the table

U.S. President Donald Trump’s Commerce Secretary, Wilbur Ross, says the White House may tear up the North American free-trade agreement and negotiate bilateral deals with Canada and Mexico. He also responded to B.C. Premier Christy Clark’s bid to ban U.S. thermal coal shipments from B.C. ports, saying the tariffs the United States recently slapped on Canadian softwood lumber exports would stay in effect. Ross said if NAFTA is renegotiated, Trump wants to add a second “f,” for “fair,” making it “NAFFTA.” Meanwhile, B.C. billionaire Jim Pattison, whose company owns a major stake in a Canadian firm hit by softwood tariffs, is staying calm amid the dispute (for subscribers).

Home Capital gets a lifeline

Home Capital is selling up to $1.5-billion in mortgages, a move that sent the price of its shares up nearly 30 per cent yesterday. The tentative deal will help the company operate as it tries to recover from a funding crisis. Canada’s largest alternative mortgage lender fell into trouble after customers began withdrawing their money from high-interest savings accounts. The company uses those deposits to help fund loans to people who don’t qualify for traditional bank mortgages. Home Capital has secured a $2-billion emergency line of credit, and appointed three veteran executives to its board to help quell investor worries.

Analysts say the sale of $1.5-billion in mortgages would still leave questions, including who the buyer is and how much Home Capital would get. But, as The Globe’s David Berman writes, “If someone is now interested in buying these mortgages, it suggests some confidence in Home Capital’s loan book. And that means that the lender’s beaten-up share price could be worth more – perhaps a lot more.” (for subscribers)

NHL PLAYOFF ROUNDUP

The Ottawa Senators have advanced to the Eastern Conference finals after beating the New York Rangers 4-2 last night. It’s the farthest Ottawa has made it in the playoffs since 2007, when they lost to the Anaheim Ducks in the Stanley Cup final. The Sens will face the winner of tonight’s Pittburgh Penguins-Washington Capitals game.

MORNING MARKETS

European shares pulled back on Wednesday from 21-month highs hit after strong earnings while the greenback fell on concerns that U.S. President Donald Trump’s dismissal of his FBI chief could make passage of his tax reform plans more difficult. Tokyo’s Nikkei gained 0.3 per cent, and Hong Kong’s Hang Seng 0.5 per cent, while the Shanghai composite lost 0.9 per cent. In Europe, London’s FTSE 100 was up 0.2 per cent by about 5:40 a.m. (ET), Germany’s DAX was down marginally, and the Paris CAC 40 was down 0.1 per cent. New York futures were down, and the Canadian dollar was at just about 73 cents (U.S.). Oil prices rose after Saudi Arabia said it would cut supplies to Asia and U.S. inventories fell more than expected.

WHAT EVERYONE’S TALKING ABOUT

Saga surrounding Don Meredith sets a precedent that now hangs over every senator

“It was a strangely passive-aggressive, non-committal kind of resignation. Senator Don Meredith sent out a statement to say he had decided not to fight his expulsion from the Red Chamber, to move on with his life, and that he would not ‘engage’ in the Constitutional battle for his seat. What he didn’t say explicitly in his 177-word statement was that he was resigning. It was the verbal equivalent of sneaking out the back door before he got the boot. … Maybe if he’d expressed remorse early, or promised to take training, he would have got a suspension and come back. In the end, the Senate essentially made him a test case, and decided it had the power to expel a senator for egregious behaviour that damages the public trust. That’s a precedent that now hangs over every senator. That’s good. There’s no voter who can kick members out of this congenitally flawed institution, so at least there’s that.” – Campbell Clark

No more business as usual at Bombardier

“After Bombardier’s directors voted this year to give Pierre Beaudoin and other top managers a massive pay raise, such frustrations could no longer be contained. That the board of directors, led by five family members, could be so out of touch was enough for the Caisse to announce this week that it would withhold its support for the 54-year-old Beaudoin’s continued board membership at the company’s annual meeting on Thursday. … taxpayers and minority shareholders need assurance that [CEO Alain Bellemare] can actually do his job free of unhelpful family meddling. That would require Beaudoin’s departure, a truly independent board of directors and the abolition of the dual-class share structure that ensures the family’s control.” – Konrad Yakabuski

I don’t use fentanyl to get high. It lets me live without chronic pain

“Contain access, the government says, and so contain the ‘outbreak.’ It won’t happen. That’s because the wrong supply – medical fentanyl rather than the raw powder smuggled in from China – is being choked off, with new national physician guidelines out this week cutting patient doses drastically, or cutting them off altogether. … One in five Canadians suffers miserable chronic pain; many have used opioids safely for years. They don’t abuse, sell, overdose or continually raise their doses. … We should all be glad, not shocked, that Canada is the world’s second-biggest user of opioids per capita. It means we have a sound, integrated palliative-care system. If we’re lucky to live long enough, we’ll all need pain therapy some day; I just got there early. Let’s hope it’s still there when you need it.” – Dawn Rae Downton, Halifax-based writer

HEALTH PRIMER

Dialogue on drug use crucial, addiction experts say

With illicit drug overdoses spiking in B.C. and other parts of Canada, experts say it is important for parents to maintain an open line of communication with their children. And if parents know their child is using substances, they should stress that they never do it alone. “If you get angry or judgmental, the child will shut down. That’s just the way life is,” says B.C.’s Leslie McBain, whose son died of an opioid overdose. “The conversation has to be calm and measured. No blame. No shame. No stigmatizing. But it also has to be straight talk on what can happen.”

MOMENT IN TIME

Winston Churchill appointed Prime Minister

May 10, 1940: In the 10 years leading up to 1940, no major politician in Britain was held in lower regard than Winston Churchill. Decried as a warmonger for suggesting conflict with Hitler was inevitable, and ridiculed for previous failures as a cabinet minister, Churchill enjoyed little support, even from within his own Conservative party. Then, as Nazi tanks stormed across Europe, the public realized who had been right all along. Overnight, Churchill’s perceived weaknesses transformed into strengths: bullheadedness, aggressiveness and a fierce pride in himself and his country. These were exactly the traits Britain needed in its leader. On May 10, appeasing Prime Minister Neville Chamberlain resigned and Churchill took over. For the rest of the war, he never let the Allies lose heart. In the end, Britain stood shattered but victorious and Churchill had earned a new, much greater reputation for himself. – Ken Carriere

Morning Update is written by Arik Ligeti.

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