From proposed taxes on streaming companies to mergers & acquisitions, there are several major business stories in Canada this week. These are some of the big stories.
Canadian Government Proposes Taxing Streaming Services
The Canadian government has proposed a tax on streaming services that will fund domestic TV and music production. The government wants global streaming companies to do more to help Canada’s economy. The tax would be on services like Netflix, Hulu, Disney+ and Amazon Prime Videos.
The government estimates that streaming services make about $5 billion a year in Canadian dollars. They would collect C$1 billion a year that would be used to finance Canadian TV shows, movies and music. The Canadian government wants a level playing service between domestic media companies and multinational streaming companies. The streaming services currently pay little to no taxes in Canada.
Aurora Cannabis Stock Expected To Enter Penny Stock Territory
Five states in America had ballot measures on legalizing marijuana in the recent elections. Every one of them passed. Canadian pot stocks have since shot up in value. Aurora Cannabis, for example, has had its stock increase by 42% in value. Many investors buy its stock through the mobile app Robinhood.
However, Aurora Cannabis has been anything but a well-run company. It recently escaped penny stock territory only by doing a 1-for-12 reverse stock split. Their stock was almost delisted by the New York Stock Exchange.
It’s likely Aurora Cannabis will return to being a penny stock, despite the recent surge in the value of its stock. It had to close five of its farms and sell a massive greenhouse they never converted to grow marijuana. It stopped construction on two other major facilities as money ran out. Its pot has not been able to compete with illegal marijuana on price.
Aphria Buys American Craft-Beer Maker Sweetwater for $300 Million
Canadian cannabis company Aphria has agreed to buy Sweetwater for at least $300 million. Sweetwater is known for its craft-beer that tastes and smells like marijuana without the high.
Sweetwater has been a favorite beer brand of many American stoners for decades. The beer is labeled “420” as a reference to marijuana. It’s suspected that Aphria plans to develop marijuana-infused beer, and that’s why they purchased Sweetwater. Aphria’s stock climbed 4.09% on the news of the acquisition.
Cenovus Acquires Husky for $2.9 Billion
Cenovus Energy Inc. and Husky Energy Inc. are two companies in the Canadian oil industry. It was announced on Oct. 25 that Cenovus is acquiring Husky in an all-stock deal valued at C$3.8 billion. Once the purchase is complete, the combined company will be Canada’s third largest oil and gas producer.
The global collapse in demand for oil caused by the pandemic has forced the oil and gas industry to consolidate. There have been other major deals in the industry, such as ConocoPhillips buying Concho Resources Inc and Chevron Corporation purchasing Noble Energy. Canada is the fourth-largest oil and gas producer in the world.
