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Saudis call for oil output cuts
to stop plunging crude prices
Freeland won’t commit Canada to plan: ‘Too early to say how this situation is going to develop’
JEFFREY JONES CALGARY
EMMA GRANEY EDMONTON
Saudi Arabia is calling on Canada and
other countries to participate in cuts to oil
output to help halt the slide in global
crude prices that is taking a heavy toll on
energy-producing economies already
struggling with the COVID-19 crisis.
The official Saudi Press Agency report-
ed that the kingdom urged members of
the Organization of Petroleum Exporting
Countries, Russia and other countries to
EU proposes aid package to farmers, fishers
Plan to shorten work-week expected to soften coronavirus impact
A fisherman protects himself from coronavirus while offloading his haul in Fiumicino, near Rome, on Thursday.
Auto-parts and medical firms
team up to build ventilators
STEVEN CHASE
MATTHEW McCLEARN
Linda Hasenfratz, chief executive
of auto-parts giant Linamar
Corp., a company from Guelph,
Ont., known the world over for
building engine parts and trans-
missions, is now suddenly and
deeply immersed in the challenge
of producing hospital ventilators.
It’s not a particular business
line she had envisioned for her
firm even a month ago. “We had
identified medical devices broad-
ly as a market that we are interest-
ed in and are looking to expand
into at some point … we’re ex-
ploring the field but ventilators
were not on the list.”
Amid the novel coronavirus
crisis, Ms. Hasenfratz and her
company are engaged in what
amounts to an unprecedented
project. They are teaming up with
other auto-parts makers to help a
small Brampton, Ont.-based firm,
O-Two Medical Technologies, pro-
duce 10,000 ventilators in a mat-
ter of months for the Ontario gov-
ernment.
The Linamar CEO says, in some
ways, an engine and a ventilator
are not that different. “Both are
complex assemblies full of very
critical, precisely manufactured
parts that need to be assembled in
a certain way – and then the full
assembly needs to be tested.”
SPORTS
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seek an agreement to “restore equilib-
rium” in the oil market.
Crude prices shot up 25 per cent Thurs-
day in response to that and to a comment
from U.S. President Donald Trump that
Saudi Arabia and Russia could be near a
deal to end a price war that has flooded
global markets. A source within OPEC+,
which comprises the cartel's membership
plus Russia, Mexico and other allied pro-
ducers, said non-affiliated countries such
as Canada and Brazil would need to join
in any co-ordinated output cuts.
Canadian officials said little about pro-
[ EMERGENCY MEASURES ]
ALBERTO LINGRIA/REUTERS
O-Two is in charge but Linamar
is spearheading the work by Mag-
na International Inc., Martinrea
International Inc. and ABC Tech-
nologies Inc., which have volun-
teered to bring their expertise to
bear in this rapid escalation of
production.
Plans are still being hammered
out, but Ms. Hasenfratz said the
Linamar’s contributions will in-
clude parts. “We are tooling up a
whole bunch of machined parts,
like 40 different parts, that we can
manufacture for them.”
Auto-parts makers say their in-
dustry is very good at expanding
production quickly, manufactur-
ing extremely precise items, deal-
ing with suppliers to expedite the
shipping of raw materials and
components as well as eliminat-
ing or reducing bottlenecks on
the production line. Plus, these
firms have the financial resources
on hand to quickly procure items.
“We’re used to highly precise
manufacturing with very tight
[measurement ] tolerances …
and very high standards in terms
of cleanliness,” Ms. Hasenfratz
says.
She said parts makers could al-
so take charge of subassembly –
putting together components
that will then form part of the ven-
tilators – to make it easier for O-
Two to focus on final assembly
and testing.
VENTILATORS, B5
O LYMPICS
Who will qualify for the Tokyo
Games isn’t clear at all,
Cathal Kelly says B9
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spects for participating. The country’s oil
producers have cut output rather than
sell it in a market that has little need for
it, with aircraft and vehicles parked and
refineries slowing operations. In early
March, Saudi Arabia and Russia met with
other OPEC nations in a bid to reach an
agreement to reduce output to compen-
sate for an expected drop in demand be-
cause of the coronavirus.
OIL, B5
Inside the market In two days, $1-billion worth
of Suncor and CNR were bought B6
B2
BoC strategy correct,
Dodge says, but there
are risks down the road
DAVID PARKINSON
OPINION
D
avid Dodge has some candid things to say
about the powerful weapons that the cur-
rent leadership at the Bank of Canada has
unleashed to fight the COVID-19 crisis.
First, they’re doing the right thing. Second, the
right thing – to “essentially print money” – could
have uncomfortable consequences down the road.
“They’ve done what they needed to do,” the for-
mer Bank of Canada governor says in a telephone
interview.
“That is to ensure liquidity – that’s the prime job
of the bank at this point in time.
“[But] this is not without consequences down
the line.”
Mr. Dodge is talking about the decision last
week by Governor Stephen Poloz and his deputies
to not only slash the bank’s key interest rate – its
primary tool for monetary policy – to 0.25 per cent,
matching its record low, but to launch a massive
government-bond-buying program that will inject
money directly into financial markets and dramat-
ically expand the central bank’s balance sheet.
The program, which is a form of what central
banks call quantitative easing (QE), is a first for
Canada, although other central banks – most fa-
mously the U.S. Federal Reserve – leaned on QE in
response to the 2008-2009 financial crisis.
Mr. Dodge, who headed the Bank of Canada
from 2001 to 2008, is more qualified than most in
this country to weigh in on such matters – and
more willing than most with his qualifications to
do so.
PARKINSON, B5
HO CK EY
Maple Leafs defenceman
Morgan Rielly has a new
perspective on life B9
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Canadian
banks buck
worldwide
trend to cut
dividends
JAMES BRADSHAW
MARK RENDELL
Canadian bank CEOs insist they
will keep paying dividends, even
as banks around the world have
axed payouts under pressure
from regulators to preserve cap-
ital within the banking system.
Concern is mounting about
the sustainability of banks’ divi-
dends after major British and Eu-
ropean lenders suspended
payouts to prepare for an unpre-
dictable health crisis. Banks ev-
erywhere are bracing for a major
shock as measures to curb the
spread of the new coronavirus
shut down large parts of the glob-
al economy, putting millions out
of work and making a painful re-
cession a virtual certainty.
Canadian banks made it
through the last financial crisis
with dividends intact, and they
have built generous capital re-
serves since then.
They have also treated the
payouts as more or less sacro-
sanct: Steady dividends serve as
signals of health in a banking sys-
tem and stopping the payouts
can erode confidence. Dividends
also provide a flow of income to a
wide array of investors, including
retirees, at a time when low inter-
est rates have sapped returns on
bonds.
On Wednesday, the United
Kingdom’s largest banks bowed
to pressure from Britain’s finan-
cial regulator and suspended di-
vidend payments. Several large
European Banks, including Italy’s
UniCredit and Dutch bank ING
Group have done the same after a
request from the European Bank-
ing Authority, and Mexico’s fi-
nancial regulator followed suit on
Thursday, saying that “it’s impos-
sible to estimate how deep and
how long the economic effects of
the pandemic will be.”
Canada’s Office of the Superin-
tendent of Financial Institutions,
has told domestic banks not to in-
crease dividends or buy back
shares, but has made no effort to
reduce payouts.
DIVIDENDS, B5
CHRISTOPHER KATSAROV/
THE GLOBE AND MAIL
E-COMMERC E
The challenge seniors
face to get groceries
during crisis B3
LEG AL
Court to consider
whether a will can be
witnessed online B3
HOUSIN G
Homeowners applying
for mortgage deferrals
face confusion B2
COMPANIES
CNR ........................................ B6
CORUS ................................... B7
DOLLARAMA ......................... B7
GOODFOOD MARKET ........... B7
SUNCOR ................................ B6
TECK ...................................... B7
B ASEB ALL
Expos of 1994 take big lead
in computer-simulated series
against ’81 squad B11