HEADLINES

Bank of Canada Keeps Rate Steady as Inflation Worries Intensify

The Bank of Canada left its main interest rate unchanged at 2.25% and adopted a more alarmed tone about the upside risks to inflation amid new cross-border tariffs and no imminent end to the war in the Middle East.

Bank of Canada Gov. Tiff Macklem said Wednesday that a sharp deterioration in U.S.-Canada commercial ties does pose challenges for the economy, and risks stifling a nascent recovery that suggested businesses are learning to live with heightened trade-policy uncertainty.

Fresh U.S. tariffs and retaliatory duties from Canada could increase costs to consumers and pose a drag on growth in the fourth quarter, he said.

Yet, the takeaway from the central bank's statement and Macklem's remarks at a press conference point to heightened concern about inflation, which--at around 3%--remains too high for comfort and could move upward as crude-oil prices remain elevated.

Aurora Cannabis Rejects Curaleaf Offer as Inadequate, CEO Says Current Plan Will Pay Off

Aurora Cannabis urged its shareholders to reject an unsolicited $272 million hostile takeover bid from Curaleaf Holdings, saying the offer is inadequate and undervalues parts of its business.

Aurora's Chief Executive Miguel Martin added that the cannabis company's standalone strategy to expand its medical cannabis business internationally should start to bear fruit in the next six months and plans to outline the strategy in greater detail in the coming weeks.

Aurora on Wednesday formally recommended to shareholders that they should reject the offer from Curaleaf, which was made last month. In an interview, Martin said that the offer undervalues its high-margin European medical business and dilutes investor voting power, while using Aurora's cash pile to absorb Curaleaf's heavy debt load.

Canada Extends Gasoline-Tax Relief Until Early 2027

Canadians will continue to see relief at the pumps after Prime Minister Mark Carney's government extended a fuel-tax break until early next year.

The government will continue a temporary suspension of the federal fuel excise tax through the end of January, after which it will apply half of the usual tax from Feb. 1 to March 31. The break, which has been in place since April 20 and had been set to run through Sept. 7, will now end in April.

"This is the most impactful measure we can put together," Finance Minister Francois-Philippe Champagne said at a press conference in Ottawa. "It is a direct measure . . . no matter where you live in the country," he added.

Circle K Parent CEO Says GLP-1 Use is Curbing Snack Appetite, Dragging Sales

Circle K parent Alimentation Couche-Tard is feeling the squeeze from a shift in American consumer snacking habits, as Chief Executive Alex Miller says that weight-loss drugs are curbing customer appetite for popular impulse snacks.

Fewer Americans are heading down the chips and candy aisle of convenience stores, and it is weighing on Couche-Tard's sales. The Canadian convenience store operator on Tuesday reported U.S. same-store merchandise sales growth of 1.7% for its fiscal first quarter, missing its target of 2% to 3%. Miller says GLP-1 weight loss drugs such as Ozempic and Wegovy are curbing customer desire for traditional purchases at its stores.

"I certainly think GLP-1 drugs are having an impact on those categories and we did see, they were softer in this quarter than they were the previous quarter," he said in an earnings call Wednesday, noting weakness in high-carbohydrate, high-sugar staples like confectionery and salty snacks.

Couche-Tard shares ended Wednesday's session down 2.4% at C$82.25.

Algoma Steel Resumes Electric Arc Furnace Steel Production

Algoma Steel has resumed production at its Ontario electric arc furnace following a failure at the power plant as it continues to assess the potential hit to steel output and shipments.

Algoma Steel's stock rose 5.6% to C$6.07.

The Canadian producer of plate and sheet steel products said it has worked with the coordinator of Ontario's electricity system to put in place interim arrangements that allowed it to resume electric arc furnace production since last Saturday.

Operations had been halted since Aug. 17 following an outage at the company's Lake Superior Power generating facility after one of the turbine units detected an abnormal condition and was automatically taken offline. The power plant supplies electricity to the Sault Ste. Marie, Ontario, company's steelmaking operations, and the outage forced it to suspended production at its electric arc furnace, though finishing and shipping activities continued.

La Caisse Invests $1.27 Billion for Stake in India's Altius

Caisse de depot et placement du Quebec has invested C$1.76 billion in Brookfield-backed Altius Telecom Infrastructure Trust, securing a 24% stake in India's largest independent telecom tower platform.

La Caisse, one of Canada's largest pension investors, said the investment reflects the growing demand for mobile connectivity and 5G infrastructure in India, the world's second-biggest telecommunications market.

Brookfield remains Altius's largest investor following the deal, alongside La Caisse and existing shareholders affiliated with Singapore's GIC and British Columbia Investment Management.

Canadian Tire, Tim Hortons Launch Linked Loyalty Partnership

Canadian Tire and Restaurant Brands International's Tim Hortons have launched a cross-brand loyalty partnership, allowing linked users to earn rewards across both programs.

The integration provides Canadian Tire, with its 12 million loyalty users, direct access to Tim Hortons' 8 million users, expanding its Triangle Rewards ecosystem. Participating members will have to link their accounts.

Under the agreement, Tim Hortons loyalty members can earn up to 5% in Canadian Tire Money on purchases in their restaurants or over the app.

OpenAI Lawsuits Mount Over Canadian School Shooting

More victims from the Tumbler Ridge massacre are suing OpenAI over its failure to alert police about ChatGPT interactions with the suspect months before the February mass shooting in Canada.

The new batch of lawsuits builds upon seven filed in April by families of victims from the shooting. They allege the AI company acted in negligence, violated product-liability standards and aided and abetted the massacre.

The cases add to a wave of more than three dozen lawsuits that allege chatbots including ChatGPT have led to harm for their users-or encouraged their users to commit acts of harm against others.

TALKING POINT

Bank of Canada Leaves Little Doubt: Inflation Trumps Trade

By Paul Vieira

OTTAWA--With the Canadian public and politicians consumed with deteriorating crossborder economic and political ties, Bank of Canada Gov. Tiff Macklem staked out ground of his own: inflation, not trade, is his most pressing concern.

As widely predicted, he kept the central bank's target for the overnight rate unchanged at 2.25% for a seventh straight time. But his focus on upside inflation risks, especially during a roughly 40-minute press conference, might have caught a few observers offguard. In answers to reporters, Macklem said inflation was too high, there was no sign of oil-tanker traffic in the Strait of Hormuz resuming, and that if needed, the central bank is ready to raise rates more than once to cool inflation.

Macklem said there are worries on the trade front, with the Trump administration imposing a new set of tariffs and threatening more. Yet, Macklem added that Canadian firms have learned to navigate the commercial environment after 20 months of volatility in President Trump's second term. Economic data, highlighted by a solid 3.3% annualized gain in the second quarter, show businesses are on a more solid footing as they enter this new period of heightened trade unrest, Macklem said.

Wednesday marked "a total narrative shift by the Bank of Canada compared to previously," said Derek Holt, an economist at Bank of Nova Scotia and one of the few economists forecasting a rate increase by year's end.

Taylor Schleich and Ethan Currie, economists at National Bank of Canada, also noted rising expectations for a rate hike by year's end. "Clearly, the Bank of Canada is closer to tightening policy than we or markets anticipated, which is pushing up odds of a late-2026 rate hike," they said.

In the wake of the meeting, the Canadian dollar strengthened versus the U.S. dollar, and the two-year Canada government bond yield rose. Increases in both picked up steam while Macklem answered reporters' questions, according to data from FactSet. The data show the yield on the two-year note - which tends to track closely to Bank of Canada's benchmark rate - traded at 3.0442% when Macklem's press conference started just after 10:30 am. By the end, the two-year yield hit 3.0826%.

Headline inflation in Canada rose in July to 3%, a level deemed too high by Macklem, while core prices, which strip out energy and food, were relatively contained at 2%. Macklem warned, though, that with no resolution in sight in the U.S.-Iran war, and the longer energy prices stay at current levels, "the greater is the risk that higher energy prices start to spill into the prices of other goods and services. Then you get more generalized inflation, which could become more persistent."

Strategists at TD Securities say it's understandable that Macklem harbors concerns about inflation spiraling out of hand, as he along with other major central bank officials were late in responding to pandemic-fueled inflation. The Bank of Canada was among the most aggressive in raising rates to battle decades-high inflation.

"It's plausible that the unreleased summer central-bank surveys showed a marked increase in inflation pressures," says TD Securities. The firm, however, said there is "no compelling case" for rate increases, noting the economy still has excess capacity and the labor demand remains subdued.

Write to Paul Vieira at paul.vieira@wsj.com

Expected Major Events for Thursday

00:30/JPN: Aug Japan Services PMI

06:00/JPN: Jul Revised Machine Tool Orders

06:00/RUS: Aug Russian Services PMI

07:45/ITA: Aug Italy Services PMI

07:50/FRA: Aug France Services PMI

07:55/GER: Aug Germany Services PMI

08:30/UK: Aug UK Official Reserves

08:30/UK: Aug S&P Global UK Services PMI

08:30/UK: Aug Narrow money (Notes & Coin) and reserve balances

08:30/GER: ifo Economic Forecast

09:30/US: Aug Challenger Job-Cut Report

12:15/CAN: Aug Official International Reserves

12:30/CAN: 2Q Labour productivity, hourly compensation & unit labour cost

12:30/CAN: Jul International merchandise trade

12:30/US: Jul U.S. International Trade in Goods & Services

12:30/US: 2Q Revised Productivity and Costs

12:30/US: 08/29 Unemployment Insurance Weekly Claims Report - Initial Claims

12:30/US: U.S. Weekly Export Sales

13:00/RUS: Weekly International Reserves

13:30/CAN: Aug Canada Services PMI

13:45/US: Aug US Services PMI

14:00/US: Aug ISM Report On Business Services PMI

14:30/US: 08/28 EIA Weekly Natural Gas Storage Report

15:00/US: Aug Global Services PMI

16:00/US: Aug Monthly U.S. Retail Chain Store Sales Index

20:30/US: Foreign Central Bank Holdings

20:30/US: Federal Discount Window Borrowings

23:01/UK: Aug BRC-Sensormatic IQ Footfall Monitor

23:30/JPN: Jul Household Spending

All times in GMT. Powered by Onclusive and Dow Jones.

Expected Earnings for Thursday Ambarella Inc $(AMBA)$ is expected to report $-0.35 for 2Q.

America's Car-Mart Inc $(CRMT)$ is expected to report $-0.67 for 1Q.

American Outdoor Brands Inc (AOUT) is expected to report $-0.41 for 1Q.

Asana Inc $(ASAN)$ is expected to report $-0.16 for 2Q.

BRP Inc (DOO.T,DOOO) is expected to report $-0.46 for 2Q.

Brady Corp - A Share (BRC) is expected to report $1.10 for 4Q.

Campbell's Co $(CPB)$ is expected to report $0.37 for 4Q.

Ciena Corp (CIEN) is expected to report $1.27 for 3Q.

Concrete Pumping Holdings Inc (BBCP) is expected to report $0.09 for 3Q.

Docusign Inc (DOCU) is expected to report $0.40 for 2Q.

Domo Inc $(DOMO)$ is expected to report $-0.31 for 2Q.

Duluth Holdings Inc (DLTH) is expected to report $-0.04 for 2Q.

Enghouse Systems Ltd (ENGH.T) is expected to report $0.33 for 3Q.

Genesco Inc $(GCO)$ is expected to report for 2Q.

Guidewire Software Inc (GWRE) is expected to report $0.47 for 4Q.

John Wiley & Sons Inc - A Share $(WLY)$ is expected to report $0.15 for 1Q.

Lands' End Inc (LE) is expected to report $-0.12 for 2Q.

Mama's Creations Inc (MAMA) is expected to report $0.03 for 2Q.

Oxford Industries Inc $(OXM)$ is expected to report $1.35 for 2Q.

Planet Labs PBC (PL) is expected to report $-0.07 for 2Q.

Quanex Building Products Corp (NX) is expected to report $0.51 for 3Q.

Samsara Inc (IOT) is expected to report $0.01 for 2Q.

Seaport Therapeutics Inc (SPTX) is expected to report for 2Q.

Smith & Wesson Brands Inc $(SWBI)$ is expected to report $-0.06 for 1Q.

Toro Co $(TTC)$ is expected to report $1.29 for 3Q.

Torrid Holdings Inc (CURV) is expected to report $-0.01 for 2Q.

UiPath Inc (PATH) is expected to report $0.03 for 2Q.

VersaBank (VBNK.T) is expected to report $0.38 for 3Q.

Victoria's Secret & Co $(VSXY)$ is expected to report $0.79 for 2Q.

Winchester Equity Corp (WEC.V) is expected to report for Interim.

Zscaler Inc (ZS) is expected to report $-0.05 for 4Q.

eGain Corp $(EGAN)$ is expected to report $-0.01 for 4Q.

lululemon athletica inc (LULU) is expected to report $1.80 for 2Q.

Powered by Factset and Dow Jones.

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https:\\newsplus.wsj.com/ subscriptions.

This article is a text version of a Wall Street Journal newsletter published earlier today.