2025-08-29 17:22

BRASILIA, Aug 28 (Reuters) - Brazil plans to announce a tax incentive plan in early September aimed at attracting foreign tech companies to build data centers in the country, two economic policy officials told Reuters. The sources, who requested anonymity to discuss the confidential plans, said the "Redata" program is designed to build goodwill with big tech firms and also more broadly with the United States, which imposed a 50% import tariff on Brazilian goods. Sign up here. U.S. President Donald Trump has tied the tariff to the trial of Brazilian former President Jair Bolsonaro, as well as complaints about regulation of U.S. tech companies, including alleged censorship of social media platforms. The Brazilian officials said the data center incentives may help to shift the focus of talks to mutually beneficial investments. "This is in American companies' interest. Redata reduces capital investment costs. Some U.S. states are restricting data center investment due to energy issues, while we have surplus energy," one source said. "It also helps negotiations with the U.S. - it's a positive signal." The executive order, initially slated for the first half of the year, had been shelved amid political turbulence when the government raised a tax on financial transactions. Separately, Brazil has also dropped a plan to tax big tech firms, fearing it could escalate U.S. trade tensions. Reuters reported in April that the data center incentives would exempt technology investments from federal taxes - including PIS, Cofins, IPI and import duties - if projects meet criteria such as 100% renewable energy sourcing. Brazil took an initial step in July by updating rules for special "export processing zones" (ZPEs), which developers are eyeing for data center projects. The new framework, which must be approved by Congress to remain valid, requires all ZPEs to source power from renewable plants yet to be built. The "Redata" plan has been eagerly awaited by investors eyeing the potential of Brazil as a hub for data centers tapping cheap and plentiful renewable energy. One such project, planned at the Pecem port complex in the northeast, is a joint venture between energy firm Casa dos Ventos and ByteDance, the parent company of TikTok, sources previously said. https://www.reuters.com/sustainability/climate-energy/brazil-launching-data-center-incentives-next-month-woo-big-tech-sources-say-2025-08-29/

2025-08-29 17:10

OTTAWA, Aug 29 (Reuters) - Canada named senior energy industry executive Dawn Farrell on Friday to lead a new office designed to fast-track the review and approval of natural resources projects such as mines and pipelines, a process that can take a decade. Prime Minister Mark Carney announced the major projects office earlier this year, saying streamlining will boost gross domestic product and help offset the damage from U.S. tariffs. Sign up here. Farrell, who was CEO of the Trans Mountain Pipeline from 2022 to 2024, and her team will identify projects in the national interest and help speed up their development. This should reduce the approval timeline for major projects to a maximum of two years, Carney's office said in a statement. "For too long, the construction of major infrastructure has been stalled by arduous, inefficient approval processes, leaving enormous investments on the table." Farrell's office will be based in Calgary, the capital of Canada's oil patch. Ottawa has yet to designate any projects as being of national significance. In a statement, the Canadian Association of Petroleum Producers said Farrell's appointment, and creation of the office, were "concrete steps towards making Canada an energy superpower and send a positive signal to industry and investors." As CEO of Trans Mountain, Farrell oversaw a multibillion dollar expansion of the pipeline's capacity that was completed last year. She was CEO of utility company TransAlta from 2012 to 2021. https://www.reuters.com/sustainability/boards-policy-regulation/energy-exec-tasked-with-speeding-up-project-approvals-canada-2025-08-29/

2025-08-29 16:03

OTTAWA, Aug 29 (Reuters) - Canada recorded a higher budget deficit of C$3.34 billion ($2.42 billion) over the first three months of the 2025/26 fiscal year as government expenditures grew faster than revenues, the finance ministry said on Friday. By comparison, the deficit in the same period a year earlier had been $2.88 billion, it said in a statement. Sign up here. Program expenses rose 4.6% on increases on major transfers to persons and provinces. Public debt charges decreased by 0.6% on lower interest rates on treasury bill but this was partly offset by higher average effective rates on an increased stock of marketable bonds, the ministry said. Year-to-date revenues grew by 2.9%, largely reflecting higher personal income tax revenue, revenue from other taxes and higher custom import duties. Duties collected through import taxes jumped 183% for the first three months through June to C$3.57 billion, mainly on account of counter-tariffs imposed on U.S. imports. On a monthly basis, Canada posted a surplus of C$3.63 billion in June, compared to a surplus of C$939 million in June 2024. ($1 = 1.3817 Canadian dollars) ((Reuters Ottawa bureau; [email protected] , opens new tab)) Keywords: CANADA BUDGET/ https://www.reuters.com/world/americas/canada-budget-deficit-over-first-three-months-202526-increases-c334-bln-2025-08-29/

2025-08-29 16:02

Second-quarter annualized GDP contracts by 1.6%, StatsCan said Analysts had forecast 0.6% second-quarter drop, growth of 0.1% in June GDP pulled down by big drop in exports, business investments Household and government spending hold up, helping the economy OTTAWA, Aug 29 (Reuters) - Canada's economy contracted in the second quarter much more than anticipated on an annualized basis as U.S. tariffs squeezed exports, but higher household and government spending cushioned the impact, data showed on Friday. The GDP for the quarter that ended June 30 decelerated by 1.6% from downwardly revised growth of 2.0% in the first quarter, Statistics Canada said, taking the total annualized growth in the first six months of the year to 0.4%. Sign up here. This was the first quarterly contraction in seven quarters. A larger-than-expected deceleration increases the chances of a Bank of Canada rate cut in September. The BoC has kept rates steady at 2.75% at its last three meetings. Money markets increased their September 17 rate cut bets to 48% after the GDP data was released from 40% before. StatsCan said the economy contracted by 0.1% in June, mainly led by a decline in output from goods-producing industries that account for a quarter of the country's GDP. "That weaker than expected trend in the monthly figures makes today's release supportive for our forecast of a September interest rate cut," Andrew Grantham, senior economist at CIBC Capital Markets, wrote in a note. However, he added that jobs and inflation data for August would be critical for the rates decision. The quarterly GDP is calculated based on income and expenditure, while the monthly GDP is derived from industrial output. This is the third month in a row that GDP, based on industry output, declined and was the first time in three years that the economy contracted for three consecutive months. Analysts polled by Reuters had forecast second-quarter GDP would contract by 0.6% and the June monthly GDP would expand by 0.1%. THIRD QUARTER LIKELY TO BE FLAT An advance estimate for July showed the economy could grow by 0.1% on a month-on-month basis, meaning the third quarter would mark an improvement. Still, economists said that slim growth in July would be worse than the BoC had predicted, which could bolster chances that it steps in to support growth. "So while the July flash showed that the economy largely recovered the lost ground from June, our early tracking points to a flat-to-slightly-negative estimate for Q3 GDP," said Royce Mendes, managing director at Desjardins. The BoC had said last month that after a substantial contraction in the second quarter, Canada's economy would likely grow by around 1% in the second half under the current tariff scenario. The Canadian dollar traded down 0.17% to 1.3771 to the U.S. dollar, or 72.62 U.S. cents. Yields on the two-year government bonds dropped further after the data, by 2.8 basis points to 2.664%. Exports declined 7.5% in the second quarter, the statistics agency said, adding this was the biggest drop in five years. Business investment in machinery and equipment also contracted for the first time since the COVID-19 pandemic, with investments falling 0.6% in the second quarter. Domestic demand, however, grew by 3.5%, indicating health in the domestic economy. The boost came mainly from household final consumption expenditure, which jumped by 4.5% on an annualized basis, residential investments, which rose 6.3%, and government final consumption expenditure, which surged by 5.1%, StatsCan noted. https://www.reuters.com/world/americas/canadas-second-quarter-gdp-contracts-rate-cut-bets-increase-2025-08-29/

2025-08-29 13:06

TORONTO, Aug 28 (Reuters) - Canada's economy contracted in the second quarter by a much larger degree than anticipated on an annualized basis as U.S. tariffs squeezed exports, but higher household and government spending cushioned some of the impact, data showed on Friday. Market reaction: CAD/ Sign up here. LINK: https://www150.statcan.gc.ca/n1/daily-quotidien/250829/dq250829a-eng.htm?HPA=1&indid=3278-1&indgeo=0 , opens new tab COMMENTS JIMMY JEAN, CHIEF ECONOMIST AT DESJARDINS GROUP "It's a mixed bag... because when we look into the details, it's not a report that's screaming a recession has started in the second quarter. Now it doesn't mean that there might not be more pain ahead on the domestic side in later quarters, but this is really uniquely focused on exports." "Inflation surprise in latest report, and ever since we've had that news of reduction in counter tariffs. All those elements joined together make a pretty strong case to resume cutting rates in September." DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS AT SCOTIABANK "The headline number is the sticker shock is pretty large, I mean the GDP across the gauge is all disappointing, but I think the devil is in the details. Key to me is that the domestic economy performed very strongly. So the measure that I look at is the final domestic demand, it adds consumption, investment to government spending. It was up 3.4% quarter over quarter, annualized in inflation adjusted terms." "If anything they have even weaker case to be cutting rates because you are seeing that strength in the domestic economy over which monetary policy has greater influence than the volatility of trade and inventory numbers. So I still want to see job's data and CPI report after that before coming to a hard decision (on rate cut possibilities)." https://www.reuters.com/world/americas/view-canadas-economy-shrinks-by-more-than-expected-second-quarter-2025-08-29/

2025-08-29 12:35

Second quarter annualized GDP contracts by 1.6%, StatsCan said Analysts had forecast 0.6% drop in Q2, growth of 0.1% in June GDP pulled down by big drop in exports, business investments Household and government spending hold up, helping the economy OTTAWA, Aug 29 (Reuters) - Canada's economy contracted in the second quarter by a much larger degree than anticipated on an annualized basis as U.S. tariffs squeezed exports, but higher household and government spending cushioned some of the impact, data showed on Friday. The GDP for the quarter that ended June 30 decelerated by 1.6% on an annualized basis from a downwardly revised growth of 2.0% posted in the first quarter, Statistics Canada said, taking the total annualized growth in the first six months of the year to 0.4%. Sign up here. This was the first quarterly contraction in seven quarters. A larger-than-expected deceleration in growth could boost chances of rate cut by the Bank of Canada in September. The BoC has kept rates steady at 2.75% at its last three meetings. Money markets were predicting chances of a rate cut on Sept. 17 at close to 40% before the GDP figures were released. StatsCan said the economy contracted by 0.1% in June, mainly led by a decline in output from goods-producing industries, which accounts for a quarter of the country's GDP. The quarterly GDP is calculated based on income and expenditure while the monthly GDP is derived from industrial output. This is the third month in a row that the GDP, based on industry output declined and was the first time in three years that the economy contracted for three consecutive months. Analysts polled by Reuters had forecast second quarter GDP to contract by 0.6% and the June monthly GDP to expand by 0.1%. An advance estimate for July showed the economy could likely grow by 0.1% on a month-on-month basis, signaling that the third quarter might not be as bad as the previous one. Exports, mainly responsible for sinking the economy in Q2, declined 7.5% in the second quarter, the statistics agency said, adding this was the biggest drop in five years. Business investment in machinery and equipment also contracted for the first time since the pandemic, with investments falling 0.6% in Q2. However, some silver lining in the second quarter came from a 3.5% growth in the final domestic demand, an indicator of the health of the domestic economy. This was mainly boosted by household final consumption expenditure which jumped by 4.5% on an annualized basis, residential investments which rose 6.3% and government final consumption expenditure which surged by 5.1%, Statscan noted. https://www.reuters.com/world/americas/canadas-annualized-q2-gdp-contracts-more-than-expected-tariffs-choke-exports-2025-08-29/