Business Brief: Dubai’s port giant eyes Churchill

Good morning. Today, we’re bundling up for Hudson Bay, where a century-old trade dream has drawn interest from the Persian Gulf. Also in today’s edition: Why voters are MIA.

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In the news

Trade: Prime Minister Mark Carney has reported a “slight intensification” of talks with the United States over a deal that could provide Canada with relief from U.S. tariffs.

Going public: Anthropic, the artificial intelligence giant behind Claude, has filed documents with regulators ahead of its highly anticipated initial public offering that reveal explosive revenue growth and massive spending commitments. Oh, it also warned of a potential “catastrophic AI-related incident” so large that the entire insurance industry might not be able to provide coverage. Nothing a little more AI can’t fix!

Defence: Canada and eight other countries will gather on Nov. 30 to sign the charter for a new multinational defence bank, forging ahead with the institution as planned after talks to merge it with a British defence procurement initiative broke down last week.

In focus

An old dream, a new suitor

For nearly a century, Manitoba’s northern port has been pitched as the shortcut that would carry Prairie wealth to Europe and beyond, and for nearly as long, its economics have refused to co-operate. This week, Jeffrey Jones and James Bradshaw report Dubai-based port operator DP World signed an agreement to study how Churchill might plug into its global shipping network. It’s a modest step, but it could mean a great deal for a multibillion-dollar project, northern Manitoba’s economy and a country racing to build new trade partnerships after decades of reliance on the U.S.

Port of call: The memorandum of understanding brings together DP World’s Canadian subsidiary, CentrePort Canada, which runs an inland port in Winnipeg, and Arctic Gateway Group, the partnership of 29 First Nations and 12 northern communities that owns the port and the Hudson Bay Railway. The agreement covers port operations and a possible corridor that would tie Churchill into the company’s network of more than 60 ports and terminals across six continents, giving its cargo a path into Europe, the Middle East and India.

True north: Prime Minister Mark Carney, who urged middle powers to band together in a speech at Davos in January, has set a goal of doubling Canada’s non-U.S. exports over the next decade – to about $600-billion – and has said building up port infrastructure is a key part of getting there. The push grew more urgent in August, when Canada-U.S. trade talks collapsed and 50-per-cent tariffs on roughly US$28-billion of Canadian goods took effect.

Tough sledding: For as long as Churchill has been operational, it has struggled to pay its way. Ice limits shipping to a few months a year, its only land link is a railway laid over thawing permafrost, and most shippers have preferred bigger ports that stay open year-round. The grain industry and the port’s former owner have both put the break-even point at more than a million tonnes a year, well above the port’s best-ever year of 710,000. To reach that kind of volume, Ottawa and Manitoba are pitching investors on a US$57-billion expansion that would add an LNG export corridor, rail upgrades, a modernized port and an all-weather road, according to a prospectus handed out at September’s Canada Investment Summit.

Breaking the ice: Much of the expansion’s price reflects Ottawa’s bet on turning Churchill into an energy port. Carney has described a rebuilt Churchill as effectively a new port – one that would open up “enormous LNG” opportunities. Manitoba Premier Wab Kinew says the Prime Minister wants gas flowing out of Churchill by 2030, a timeline Kinew himself called “aggressive.” At present, ships can reach the port from about July through October. New studies have found that icebreakers costing $100-million to $410-million could keep the route open year-round.

Common ground: In a meeting with First Nations leaders and premiers yesterday, Carney pledged new ways for communities to share in the revenue from natural resource development. Ottawa’s relationship with those communities is central to the success or failure of several major projects it wants to fast-track. Churchill isn’t yet among them, but the Major Projects Office lists it as a “transformative strategy” still in development, one it says would prioritize Indigenous ownership.

Sharing the bay: More tankers would mean more traffic in waters that sustain Churchill’s tourism industry, which adds an estimated $41-million to Manitoba’s GDP. Visitors come in summer to see the belugas that crowd the Churchill River estuary, and in the fall to see the polar bears that gather along the shore. Scientists and Inuit communities say more noise from ships could disrupt the whales.

Charted

Voter turnout in B.C. hit a new low in Saturday’s provincial election as fewer than half of registered voters cast a ballot – an indication, observers say, that many voters rejected the rationale for the snap vote.

Quoted

For Antoni Cimolino, leaving the Stratford Festival is such sweet sorrow.

Up next

More files we’re following

By the numbers: Markets are mostly fixed on tomorrow’s central-bank double-header, when the Bank of Canada is widely expected to raise rates and the Federal Reserve to hold. Today brings U.S. consumer confidence data at 10 a.m., which economists expect to slip. Israelis also head to the polls in a tight race between Benjamin Netanyahu’s bloc and an opposition alliance.

Before the bell: In Canada, Celestica holds its results call and investor day this morning, fresh off a quarter that beat expectations and a forecast that revenue will nearly double next year. Precision Drilling reports after the close. On Wall Street, earnings include Boeing, Coca-Cola, UPS and PayPal.

Morning update

Global markets were mixed in cautious trading amid an earnings-packed week and ahead of central bank rate decisions.

Wall Street futures and TSX futures were little changed.

Overseas, the pan-European STOXX 600 was down 0.14 per cent in morning trading. Britain’s FTSE 100 dropped 0.89 per cent, Germany’s DAX slipped 0.08 per cent and France’s CAC 40 was flat.

In Asia, Japan’s Nikkei closed 1.73 per cent higher, while Hong Kong’s Hang Seng slid 0.73 per cent.

The Canadian dollar traded at 71.35 U.S. cents.