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Morning Update: Trudeau’s meeting with Trump; mandatory minimums on trial

U.S. President Donald Trump welcomes Prime Minister Justin Trudeau on the South Lawn before their meeting about NAFTA at the White House in Washington, on Oct. 11, 2017.

JONATHAN ERNST/REUTERS

Good morning,

These are the top stories:

Donald Trump threatened to kill NAFTA as Justin Trudeau sat next to him

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"I think Justin understands this, if we can't make a deal, it will be terminated, and that will be fine," Trump said at the White House yesterday. And for the first time, Trudeau acknowledged the possibility the deal could fall apart: "We have to be ready for anything, and we are," he said hours later (for subscribers). Trudeau also made note of the unpredictable nature of Trump and his administration but said he remains optimistic about a future with NAFTA in place. Trump left open the possibility of a bilateral deal with Canada in the event he decides to scrap NAFTA.

Here's Campbell Clark's take on Trudeau's positive tone: "There's room to wonder how much being Trump's friend matters in the end. The two leaders' February meeting ended with Trump's comment about tweaking NAFTA, but he may have forgotten it before Trudeau's limo was out of the driveway. The Mexicans feel it's time to deliver warnings. Yet Trudeau's relentless optimism is both his preferred style and a strategy. The government-wide plan was to try to stay away from angry, tweeting Trump. Who can deny the President escalates conflicts when he feels challenged?" (for subscribers)

The latest round of North American free-trade talks are kicking off and the U.S. is expected to go after rules of origin for vehicles as well as Canada's supply-management system for dairy, eggs and poultry. Trudeau is headed to Mexico City today where he'll meet with President Enrique Pena Nieto.

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The case of an Indigenous drug smuggler is putting mandatory minimum sentences on trial

Lawyers for a 22-year-old Indigenous woman say she was nothing more than a "drug mule" and doesn't deserve to be subjected to a mandatory minimum sentence. Cheyenne Sharma, a sex worker who comes from a background of extreme poverty, was caught bringing $128,000 worth of cocaine into Canada from the Caribbean. Prosecutors are seeking a 3 1/2 year prison sentence. But Sharma's lawyers say that amounts to cruel and unusual punishment given her circumstances and are challenging the constitutionality of mandatory minimums.

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Even though prosecutors are pushing ahead, Justice Minister Jody Wilson-Raybould has denounced the mandatory rules put in place under the previous Conservative government. But she has yet to offer a timeline to change the practice.

Justin Trudeau says a tax on employee discounts is not going to happen

The Prime Minister has stepped forward to address concerns about the Canada Revenue Agency's controversial plans. "Let me be blunt: We are not going to tax anyone's employee discounts," he said (for subscribers). The CRA said it would consult on a new approach, but Trudeau is promising that won't result in a resurrection of the discount tax.

Fact-checking the Liberals' proposed tax changes

The Liberals have argued that they're specifically targeting the wealthy with their small-business tax reforms. We ran the fine print by accountants and analyzed how families of all stripes would be affected. Here's what we found (for subscribers).

Wildfires continue to rage in California

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The death toll has reached 21 as firefighters struggle to contain the fires ravishing California's wine country. Entire neighbourhoods have been burnt to the ground and at least 3,500 homes and businesses have been destroyed. California's battle comes after a summer that saw wildfires force nearly 50,000 from their homes in British Columbia.

MORNING MARKETS

The greenback sagged on Thursday after the U.S. Federal Reserve showed a more guarded view towards inflation, but that did not derail a rally in stock markets that pushed Asian shares to their highest in a decade. Tokyo's Nikkei climbed 0.7 per cent, and Hong Kong's Hang Seng 0.2 per cent, as the Shanghai composite dipped 0.1 per cent. In Europe, London's FTSE 100 and Germany's DAX were both up by about 5:35 a.m. ET, though by less than 0.1 per cent, while the Paris CAC 40 was down 0.2 per cent. New York futures were down. The Canadian dollar was trading in a short range, hovering at about 80.3 cents (U.S.). Oil prices slipped as U.S. fuel inventories rose despite efforts by OPEC to cut production.

IN CASE YOU MISSED IT

A Swedish court acquitted a Bombardier employee in a bribery case

The prosecution failed to prove that Evgeny Pavlov "promised or offered" a bribe to help secure a $340-million (U.S.) rail contract for Bombardier in Azerbaijan. The ruling didn't address whether any bribe was paid to Bombardier's Russian partners; the Montreal-based company continues to deny any allegations of criminal wrongdoing. Pavlov, who was facing up to six years in jail, is now free. Swedish detectives are still investigating five other Bombardier employees.

WHAT EVERYONE'S TALKING ABOUT

Sears Canada's biggest problem was its bad parent

"The story Sears Canada veterans are spinning this week is that there was something preordained in the chain's decline. Former CEO Mark Cohen called it "a most unfortunate but inevitable end to an iconic Canadian company. … There was nothing inevitable about the demise of Sears Canada. The experience of rival chains shows it's possible to reinvent stores and keep customers coming in the door. The fact that Sears Canada ended up as retail road kill reflects a failure in leadership." – Andrew Willis (for subscribers)

Taxing Netflix may be a good idea, but don't pretend it's easy

"Sales taxes applied to a cable package or a movie ticket also should apply to content that's purchased online. But if taxing an offshore company that sells no tangible product and has zero physical presence in our country were straightforward, it would have been done long ago. You can rue the borderless nature of the Internet. But the real issue boils down to domestic and international tax provisions." – Globe editorial

Weinstein is on the way to extinction, but what of his fellow dinosaurs?

"...[Harvey] Weinstein has fallen not because he had abused his power but because he was already losing his power. … So what happens to the self-styled boardroom Lotharios who are still at the height of their professional powers? Well, look no further than the Oval Office, where a chief executive who has been caught on tape admitting that he used his position as a television celebrity to assault women can apparently just ignore a string of similar accusations because he's the dude who got himself elected to the presidency." – Kate Taylor

HEALTH PRIMER

Obesity rates among children have grown tenfold in the past 40 years

The finding comes from a World Health Organization study, which listed Canada's obesity rate for girls at 9.9 per cent for girls and 14.7 per cent for boys. That's up from 6.2 and 8.3 per cent, respectively, 20 years ago. One small positive is the trend is showing some signs of slowing down in Canada, but experts caution that could be temporary if action isn't taken. "Childhood obesity continues to represent a major health crisis and a ticking time bomb for future health problems including diabetes, cardiovascular disease and cancer," University of British Columbia professor James Johnson said.

MOMENT IN TIME

Edith Cavell is executed by Germans

Oct. 12, 1915: The snow-capped slab of Mount Edith Cavell in Alberta's Jasper National Park is just one of the many memorials across the Commonwealth to "the woman the Germans shot." That phrase, given to an early film about the storied English nurse, hints at the reason for her lionization: The daughter of a country vicar was operating a clinic in Brussels during the First World War when she was arrested and executed by the occupying German forces for her role in smuggling Allied soldiers out of Belgium. The Germans said she was a spy, but the killing of a latter-day Florence Nightingale stirred outrage in Britain, where Cavell was hailed as a martyr. Only recently has her likely connection to a wartime spy ring come to light, complicating the popular image of an innocent nurse murdered in cold blood. – Eric Andrew-Gee

Morning Update is written by Arik Ligeti.

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Trudeau remains optimistic for a positive outcome to NAFTA negotiations
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About the Author
Social Media Editor

Arik Ligeti is a social media editor at The Globe and Mail. Based in the B.C. bureau, he previously worked as a homepage editor. More

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