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Pot marketing pushback

Some Canadian marijuana sector companies are getting pushback against their marketing efforts from social media platforms and government officials as the legalization of recreational pot looms.

Lift & Co, which hosts industry events and offers cannabis education, this month had its YouTube account suspended and Facebook ad account deactivated, with both companies citing a policy violation.

Lift CEO Matei Olaru says he believes its accounts were targeted in connection with the U.S. tech giants' policies barring promotion of the sale of illegal, prescription or recreational drugs, even though medical marijuana is legal in Canada and recreational pot will soon follow suit.

He says Lift's content on both platforms largely involved cannabis education and promotion of upcoming industry tradeshows, but believes it got lumped into the broader category of marijuana, which is illegal under U.S. federal law.

Meanwhile, Canadian licensed producer MedReleaf cancelled its Montreal launch of its recreational brand San Rafael '71 scheduled for today after Quebec government officials expressed concern.

MedReleaf's vice-president of strategy Darren Karasiuk says the producer heard the concerns of Quebec's alcohol regulator, which is also tasked with cannabis distribution, and respects proposed laws which bar the promotion of "lifestyle" cannabis consumption.



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CPR prepares for shutdown

Canadian Pacific Railway says it has begun shutting down train operations ahead of a possible strike set to start Saturday by two unionized workforces.

The company says it has an embargo application in place on shipments going to or from CP's Canadian locations that will take effect just after midnight on April 21.

Canadian Pacific says it continues to bargain with both the Teamsters Canada Rail Conference and the International Brotherhood of Electrical Workers, which have given strike notices for this Saturday.

A spokesperson for the Teamsters Canada Rail Conference, which represents about 3,000 CP Rail engineers and conductors, said Thursday that less than two days from a strike deadline they had no progress to report.

The potential strike comes at a difficult time for the railway, which is under pressure from shippers to move backed-up grain shipments and supply more trains to the pipeline-constrained oil industry in Western Canada.

The Teamsters union reached a tentative deal with Canadian National Railway Co. last month for a new contract for about 1,700 workers. CN's IBEW members ratified an agreement in April 2017.



Retail sales weaken

Canadian retail sales during the crucial holiday shopping season were far lower than previously projected as consumers appeared to pull back on spending.

Statistics Canada has released revised estimates for its retail-trade figures — and they are considerably weaker when compared to the initial readings published by the federal agency.

The agency now estimates retail sales for November contracted 1.1 per cent compared to the previous month, which is a downward revision from its previous figure of 0.5 per cent growth.

For December, the agency now says retail trade likely fell 1.2 per cent, which is deeper than its previous estimate of just a 0.7 per cent contraction.

The report says retail sales grew by only 0.1 per cent in January, compared to the initial estimate of a 0.3 per cent expansion.

Statistics Canada also released its monthly number for February, when it estimates retail sales increased 0.4 per cent to $49.8 billion — with the biggest increases coming from new car dealers and general merchandise stores.



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8,000 Disney tickets stolen

Thieves made off with 8,000 Disneyland tickets worth about $800,000 when they stole a box trailer from a youth agricultural education organization that was going to distribute them to participants at a conference in Southern California, officials said.

The trailer owned by Future Farmers of America was stolen Wednesday from the group's office in the city of Galt, south of Sacramento, the California Highway Patrol said.

Security footage shows a dark pickup truck backing up to the trailer and driving it away, said Matt Patton, executive director of the California chapter of Future Farmers of America.

Patton said the thief broke through a gate and broke a lock before hooking the trailer to the pickup truck.

"They had definitely been scoping it out because they went directly to the trailer and didn't waste any time doing anything else," Patton said.

The trailer also was loaded with another $800,000 in audio and visual equipment for use at the group's upcoming annual leadership conference in Anaheim, which starts Sunday.

Patton says Disneyland has cancelled the tickets and is working to print new ones for the California students attending the four-day conference so they can visit Disney's California Adventure Park on Tuesday.

The highway patrol warned people to be cautious when purchasing Disneyland tickets from unknown sources.



Consumers paying more

UPDATE 5:50 a.m.

Canada's annual inflation rate continued creeping higher last month to hit 2.3 per cent.

The March figure from Statistics Canada shows the pace of inflation inched a little farther past the midpoint of the central bank's ideal range of between one and three per cent.

By comparison, inflation was 2.2 per cent in February and 1.7 per cent in January.

The annual pace of inflation was the highest since it hit 2.4 per cent in October 2014, just as the oil-price slump was getting underway.

The upward forces on inflation last month were led by higher costs for gasoline and air transportation, while cheaper prices for video equipment, digital devices and electricity applied downward pressure.

The report also says the average of the Bank of Canada's three measures of core inflation, which are designed to leave out the noise of more-volatile items, was two per cent last month.

The Bank of Canada scrutinizes inflation when it considers interest-rate decisions. Its rate hikes can be used as a tool to help prevent inflation from climbing too high.

But the recent readings above two per cent are unlikely to have a major impact on upcoming interest-rate decisions — because the central bank is now expecting them.

Earlier this week, the central bank said that due to the temporary effects of higher gas prices and minimum wage increases it has raised its inflation projections. The bank is now expecting the measure to average 2.3 per cent in 2018 before settling back down to 2.1 per cent in 2019.


ORIGINAL 5:34 a.m.

Statistics Canada says the consumer price index in March was up 2.3 per cent compared with a year ago.

More coming.



Metal fatigue on deadly jet

Southwest Airlines sought more time last year to inspect fan blades like the one that snapped off during one of its flights Tuesday in an engine failure that left a passenger dead.

The airline opposed a recommendation by the engine manufacturer to require ultrasonic inspections of certain fan blades within 12 months, saying it needed more time to conduct the work.

Southwest made the comments last year after U.S. regulators proposed making the inspections mandatory. The Federal Aviation Administration has not yet required airlines to conduct the inspections but said late Wednesday that it would do so in the next two weeks.

The manufacturer's recommendation for more inspections followed an engine blowup on a 2016 Southwest flight. On Tuesday, an engine on another Southwest jet exploded over Pennsylvania, and debris hit the plane. A woman was sucked partway out of the jet when a window shattered. She died later from her injuries.

The plane, a Boeing 737 bound from New York to Dallas with 149 people aboard, made an emergency landing in Philadelphia.

Federal investigators are still trying to determine how the window came out of the plane. Victim Jennifer Riordan, who was in a window seat in Row 14, was wearing a seat belt.

Philadelphia's medical examiner said the banking executive and mother of two from Albuquerque, New Mexico, died from blunt-impact injuries to her head, neck and torso.

Investigators said the blade that broke off mid-flight and triggered the fatal accident was showing signs of metal fatigue — microscopic cracks from repeated use.

The National Transportation Safety Board also blamed metal fatigue for the engine failure on a Southwest plane in Florida in 2016 that was able to land safely.

That incident led manufacturer CFM International, a joint venture of General Electric Co. and France's Safran SA, to recommend in June 2017 that airlines conduct ultrasonic inspections of fan blades on many Boeing 737s.

The FAA proposed making the recommendation mandatory in August but never issued a final decision.

On Wednesday, the FAA said it would issue a directive in the next two weeks to require the ultrasonic inspections of fan blades on some CFM56-7B engines after they reach a certain number of takeoffs and landings. Blades that fail inspection would need to be replaced.



Westjet to up inspections

WestJet Airlines Ltd. says it's immediately accelerating inspections of some fan blades following an engine failure on a Southwest Airlines flight Tuesday that left one passenger dead.

Calgary-based Westjet says the European Aviation Safety Authority issued a directive that airlines inspect some fan blades on Boeing 737NG engines by the end of 2019, but the company says it plans to have the inspections done ahead of time based on the Southwest event.

On Tuesday, the engine on a Southwest flight exploded, hitting the plane with debris. A woman was sucked partway out of the jet when a window shattered. She died later from her injuries.

Investigators said the blade that broke off mid-flight and triggered the fatal accident was showing signs of metal fatigue — microscopic cracks from repeated use.

Last year, Southwest Airlines had opposed a recommendation by the engine manufacturer to require ultrasonic inspections of certain fan blades within 12 months, saying it needed more time to conduct the work.

The manufacturer's recommendation for more inspections followed an engine explosion on a 2016 Southwest flight.



Beer ruling pipeline effect?

A Supreme Court of Canada ruling on bringing beer from Quebec into New Brunswick has implications for the trade war between Alberta and B.C. over the Trans Mountain pipeline expansion.

Experts say the court seems to be addressing the issue in its decision when it notes that while some trade barriers can be allowed in some circumstances, those designed to punish another province or to protect a local industry would not be permissible.

Howard Anglin, executive director of the Canadian Constitution Foundation, says the decision protects provincial liquor monopolies by finding that New Brunswick did have the right to fine Gerard Comeau for buying alcohol in Quebec and transporting it over the border.

But the part of its decision that talks about punitive trade barriers could likely be interpreted to apply to the Alberta's recent threat to restrict oil and fuel shipments to B.C. and its previous short-lived ban on buying B.C. wine, both designed to pressure B.C. into dropping its opposition to the pipeline.

Shea Coulson, a lawyer who represented five B.C. wineries as interveners in the Supreme Court case, says he thinks the language in the decision suggests the court was thinking about the Trans Mountain dispute.

He says the ruling implies that Alberta's moves to punish B.C. would likely be found to be unconstitutional.

"I think the judgment goes directly to those sorts of issues," he said. "And they're probably unconstitutional. That's my view."



Airline profits set to fall

Canada's airline profitability, which reached a 20-year high last year, is expected to soften due to higher fuel and labour costs, according to a Conference Board of Canada report.

Airline pre-tax profits are forecast to drop 27 per cent to $1.32 billion as increasing costs outpace higher revenues that are forecast to approach $32 billion.

Canadian airlines posted their highest revenues and profits last year since the board began collecting data in 1997.

"Some of the main tailwinds Canada's air transportation industry has benefited from in the past two years, primarily low fuel costs and a weaker loonie that is bolstering U.S. and foreign demand, will slowly reverse themselves over the next five years," stated Conference Board economist Sabrina Bond.

Still, she said that shouldn't put the industry's expansion and profitability at risk as air travel demand continues to grow because of strengthening employment in Canada and the United States.

The Conference Board said fuel, which accounts for about a third of airline costs, will rise while employee costs will grow as new or expanded routes will require the hiring of 6,000 more people over the next five years.

By 2022, the industry is expected to generate about $1.37 billion of pre-tax earnings on nearly $38 billion of revenues.

The Conference Board said a continued expansion of domestic and international capacity has been a key driver of the improved revenues for the industry's largest airlines.

Strong demand and growing connecting traffic through its three hubs in Canada are expected to result in another good year in 2018, Air Canada CEO Calin Rovinescu said during a February conference call.

Canadian airports served 139.4 million passengers last year, up 5.4 per cent from 2016 and 37 per cent higher than a decade ago. The loonie's softness helped boost international air travel in 2017, when a record 5.7 million U.S. residents flew to Canada last year.

Most of the gains in U.S. travellers were serviced by Canadian airlines, which now supply seats for two-thirds of U.S. visitors.

The number of non-U.S. international travellers increased to a record 6.7 million last year. While Europeans remained the largest group, more visitors from Asia, particularly China and India, have narrowed the gap. Canadian airlines added 5.9 per cent more seats to international destinations in 2017, which represents a 60 per cent growth over the last five years.

A strong Canadian economy contributed to a 4.2 per cent increase in domestic travel by Canadians as nearly 77 million passengers flew within the country.

The Conference Board expects the Canadian airline industry's growth will continue, but at a slower pace as a forecasted modest appreciation in the Canadian dollar will remove some of the incentive for foreign travellers.

Global airline net profits are expected to reach a record US$38.4 billion this year, defying the traditional cyclical downturn that comes about every eight years, says Julie Perovic, the senior economist for the International Air Transportation Association.

Robust operating margins in North America have contributed about half of the industry's profitability over the last couple of years.



Trump-Abe 'bromance'

Japanese Prime Minister Shinzo Abe courted the new American president with a golden driver not long after Donald Trump won the White House. He's met with the billionaire businessman more than any other world leader, and he is Trump's second-most frequent caller.

Yet the "bromance" between Trump and Abe has its limits.

Trump appeared to be successful Tuesday in reassuring Abe that he would take Japan's concerns to heart during his upcoming meeting with North Korea's Kim Jong Un. But Wednesday brought public disagreements, as Trump spurned his guest's top economic and trade priorities. Principal among them: allowing Japan an exemption from new U.S. steel and aluminum tariffs and persuading Trump to re-join the Trans-Pacific Partnership trade deal.

During a roughly 40-minute joint news conference Wednesday evening, Abe tried to put on a good face, emphasizing their close relationship and their areas of accord on North Korea policy. He effusively thanked Trump for pledging to raise the issue of Japanese abductees held by North Korea in his meeting with Kim.

But when pressed on the economic disagreements, Abe repeatedly consulted notes as he tried to sidestep questions on the contentious issues, instead returning to Trump's favoured call for developing a "reciprocal" trade relationship with the U.S. It marked a stark departure from Abe's pre-summit hopes of coaxing the U.S. back into the TPP. And Japan remains the only major U.S. ally not to be exempted from the tariffs announced last month.

World leaders have quickly learned that flattery is an easy way into Trump's graces, and throughout the two-day summit, Abe appeared keen to praise the president at every opportunity. He applauded Trump's courage for agreeing to meet with Kim and marveled at Mar-a-Lago, calling Trump's estate "a gorgeous place."

Abe drew laughs before a dinner with the joint delegations in a baroque dining room when he recounted the strength of their relationship over food, which included a cheeseburger on the golf course and a working luncheon Wednesday. "We already had two lunches in the same day," he said. "And now we are going to have our dinner."

The summit was hastily put together after Trump accepted Kim's invitation for a meeting in the next two months, and as the president prepared to implement the metals tariffs.

Trump said the invitation to his private club was a sign of how much he liked Abe.



Starbucks, 'retail racism'

It was a surreal scene that is part of daily life for many black Americans and minorities, an everyday moment gone wrong, ending in complete humiliation.

Two black men were handcuffed and arrested at a Starbucks, setting off a national uproar after the incident was captured on video. A worker complained the men were trespassing, but they maintained they were doing what thousands of people do in the popular coffee shops across the country — waiting to meet a friend.

The exchange was a fresh reminder that, five decades after the end of legal segregation, to be black in America is to be constantly challenged in certain spaces in ways white Americans scarcely have to consider, simply to get through the day without being hassled.

The term used to describe encounters like the one at the Starbucks is "retail racism," also known as "shopping while black." It happens when minority customers are treated differently than white customers through a variety of indignities and slights, such as being refused service, falsely accused of shoplifting or reported to security or police over something mundane.

Starbucks announced Tuesday that it would close its 8,000 U.S. stores for several hours next month to conduct racial-bias training for its nearly 175,000 workers. The company — known as an inclusive and progressive workplace — has been responsive in the wake of the April 12 incident, and CEO Kevin Johnson came to Philadelphia and met with the two men who were arrested. Within hours, Philadelphia Mayor Jim Kenney condemned the incident, saying it "appears to exemplify what racial discrimination looks like in 2018," and prosecutors declined to bring charges against the men.

Research and surveys show that "retail racism" remains prevalent, and many black Americans have had their own "Starbucks moment" in establishments across the country. It's a phenomenon not limited by race, age, or gender, affecting even billionaire Oprah Winfrey — turned away at a Paris Hermes shop in 2003 — and former President Barack Obama, who spoke from the White House in the wake of the George Zimmerman acquittal in 2013 about his experiences as a younger man of being followed in stores and doors locking as he passed by.



Trans Mountain 'untenable?'

The CEO of Kinder Morgan says events in recent days have reinforced his concerns about the viability of the Trans Mountain expansion project.

"It's become clear this particular investment may be untenable for a private party to undertake. The events of the last 10 days have confirmed those views," Steve Kean said on a conference call Wednesday.

The political wrangling around the project has significantly escalated since Kinder Morgan halted work earlier this month, saying British Columbia's obstruction efforts have created too much uncertainty for the company and setting a May 31 deadline to find a resolution.

Alberta Premier Rachel Notley has responded by pushing to restrict oil shipments to B.C. and promising financial backing for the project, while B.C. Premier John Horgan has stood firm in his opposition. Saskatchewan has also said it will look to restrict oil shipments to B.C.

"We've pointed out there are significant differences between governments, and those differences are outside of our ability to resolve," Kean said on the call.

Prime Minister Justin Trudeau flew back to Ottawa on Sunday to meet with both premiers to try solve the impasse, but the meeting ended with no clear resolution.

Trudeau said after the meeting that the federal government was prepared to financially back the pipeline, and he had directed Finance Minister Bill Morneau to sit down with the company to discuss the matter.

Kean confirmed on the call that discussions have begun, but said he was not going to make any details public until a definite agreement has been reached or the discussions have ended.

He said the company also continues to meet with stakeholders ahead of the May 31 deadline, and is looking for a way forward for the project.

Kean said investment questions around the Trans Mountain pipeline shouldn't be taken as a wider comment on investing in Canada.

"We have invested in Canada and British Columbia, as well as Alberta, and we expect to continue investing," he said.



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