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Morning Update: Trudeau’s ‘red line’ in NAFTA talks; a probe of policing in Thunder Bay; why the loonie hit 80 cents (U.S.)

Prime Minister Justin Trudeau and U.S. President Donald Trump are seen at the White House in February.

Sean Kilpatrick/THE CANADIAN PRESS

Chapter 19: Trudeau's 'red line' in NAFTA talks

North American free-trade agreement renegotiation talks kick off Aug. 16, and there's at least one issue that's apparently make-or-break for Justin Trudeau: dispute-settlement panels. The U.S. government has listed the removal of the panels as one of its top priorities. But according to a senior official, Chapter 19 is the "red line" that Canada won't cross (for subscribers). The section allows for Canada, the U.S. or Mexico to ask for independent panels when they deem their own exporters or producers have been hit with unfair trade rulings. U.S. critics have said the panels often rule against U.S. interests. Dispute panels were also a contentious issue during original NAFTA negotiations in 1987.

Meanwhile, B.C. Premier John Horgan is set for his first meeting with Trudeau today in Ottawa. He'll surely be raising the softwood-lumber dispute, an issue he'll be discussing with U.S. Secretary of Commerce Wilbur Ross in Washington this week. The tariffs slapped on by the U.S. have been detrimental for B.C., which counts softwood as its biggest export south.

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Kushner: 'I did not collude with Russia'

After a closed-door meeting with the Senate intelligence committee, Donald Trump's son-in-law and senior adviser Jared Kushner faced reporters and made the following statement: "All of my actions were proper and occurred in the normal course of events of a very unique campaign. I did not collude with Russia, nor do I know of anyone else in the campaign who did."

Kushner has been in the hot seat of late over a meeting he attended at Trump Tower in June of last year. The meeting was described in an e-mail chain with Donald Trump Jr. as a chance to get dirt on Hillary Clinton via the Russian government. But Kushner said he only read the e-mail details on the meeting's timing, and left not long after arriving and hearing discussion about Russian adoptions.

Besides the Trump Tower meeting, one key area investigators are reportedly examining is whether Russians were assisted in targeting voters in key swing areas with fake information about Clinton. Kushner was the head of the Trump campaign's digital operation. He will be grilled by members of the House intelligence committee today, again behind closed doors.

A probe will look into the state of policing in Thunder Bay

Senator Murray Sinclair, the country's leading Indigenous jurist, has been appointed to investigate the Thunder Bay Police Services Board. The probe by the Ontario Civilian Police Commission, a provincial accountability body, comes amid a leadership crisis in the city and escalating tensions between police and the Indigenous community. Sinclair will be looking into three things: How the board has responded to concerns about investigations into Indigenous deaths; Criminal charges against the police chief; and the board's rejection of public complaints of systemic racism within the police force.

Here's a timeline of what's been happening in Thunder Bay:

In May, Chief of Police J.P. Levesque was charged with breach of trust and obstructing justice. Levesque is on a leave of absence.

In June, the York Regional Police began looking at the most recent Indigenous deaths in the city, at the request of the province's chief coroner.

Last week, Mayor Keith Hobbs was charged with extortion and obstruction of justice. He's now on leave for 90 days.

The loonie has hit 80 cents against the U.S. dollar. Thank Trump

Cross-border shopping is getting a little bit easier. The Canadian dollar reached 80 cents (U.S.) yesterday, the currency's highest trading point against the U.S. dollar in two years.

So how can the boost be explained? Growing skepticism about Donald Trump's economic promises has played a role, Ian McGugan writes (for subscribers). "The expanding shambles in Washington could continue to drag down the greenback compared with the loonie, especially if the Bank of Canada hikes interest rates again." But the loonie's rise along with shrinking U.S. enthusiasm for rate hikes may prompt the BoC to hold firm in the months ahead, argues David Rosenberg, the chief economist at money managers Gluskin Sheff + Associates (for subscribers).

One interesting footnote: Despite its growing value against the U.S. dollar, the loonie has actually declined against the euro and Australian dollar.

U.S. dollar surrenders gains; Asian shares seek direction

The dollar surrendered short-lived gains on Tuesday as concerns about the U.S. economy and politics returned to the fore ahead of a Federal Reserve meeting, while a lack of catalysts kept Asian stocks subdued. In Europe, Britain's FTSE 100 rose 0.60 per cent just before 5 a.m.. Germany's DAX was up 0.46 per cent and France's CAC 40 gained 0.60 per cent. In Asia, Japan's Nikkei was off 20.47 points at 19,955.20. The Shanghai composite shed 0.21 per cent while Hong Kong's Hang Seng edged up 0.2 per cent. U.S. stock futures were mixed. crude prices were higher. The Canadian dollar was trading at 79.90 cents (U.S.).

WHAT EVERYONE'S TALKING ABOUT

Democracy is at stake in Poland. Why are we silent?

Today, Poles have a choice to make about what kind of society they want going forward. They know better than anyone where authoritarianism can lead. Of course, it goes without saying that this is their choice to make. But Canadians should not stand silent. Canada made significant investments in Poland's post-Communist reconstruction and more recently in its security, including stationing troops there as part of a NATO deployment. Canada should lend its voice to the millions of Poles who do not want to turn back the clock and return to authoritarian rule and the kind of intolerance that has no place in today's Europe. We have done so before and it is time to do so again." – Jillian Stirk, associate at the Simon Fraser Centre for Dialogue

The monarchs are back

"A lot of people have stopped reading the news because they can't stand it any more. So here's a happy story for a change. The monarchs are back! Three weeks ago, I saw one alighting on a milkweed plant in our field in rural Ontario. Since then we've had almost daily sightings. What a relief. We hadn't seen a monarch butterfly in years. These gorgeous creatures were widely reported to be headed for extinction – one more victim of humankind's relentless assault on the planet. We'd begun to wonder if they'd ever come back. And now, here they are, alive and well, and the future is looking surprisingly bright." – Margaret Wente

HEALTH PRIMER

When you gotta go, but there's no public toilet in sight

"In Canada, we behave as if urination, defecation and menstruation are not routine bodily functions, but are somehow optional if we are away from our homes. We design, construct and maintain public spaces such as roads, sidewalks and parks, but act as if people using those spaces will never need a bathroom unless they are attending an 'event' such as Canada Day, and you need to content yourself with a long line-up to use a porta-potty that requires you to hold your breath. Toilets need to be considered a No. 1 (and No. 2) priority of urban design; they are essential for an inclusive, healthy society." – André Picard

MOMENT IN TIME

Benito Mussolini steps down

July 25, 1943: Mussolini was tired. After more than two decades as the Fascist leader of Italy, Il Duce had seen his victories in North Africa reversed, found himself usurped in Europe by his German protégé and was now helpless as the Allies made their way north after taking Sicily. Mussolini's propaganda photos and films had often depicted him shirtless and engaged in physical labour, but when his Grand Council of Fascism passed a vote of no confidence against him in Rome, witnesses said he looked ill. After a brief meeting with the King, he was arrested and imprisoned, only to be freed weeks later by the Germans and installed as the head of a puppet state in the north – effectively a bulwark against the advancing Allies. The man who said it was "humiliating" to stand by and let others write history was now being crushed by it. – Massimo Commanducci

Morning Update is written by Arik Ligeti.

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