Case (un)closed

MARKETS

▲	TSX	34,138.88	+0.18%
▲	S&P 500	7,412.84	+0.19%
▲	DOW JONES	49,704.47	+0.19%
▲	NASDAQ	26,274.13	+0.10%
▲	GOLD	4,745.6	+0.31%
▲	OIL	98.25	+2.97%
▼	CAD/USD	0.73	-0.02%
▲	BTC/USD	81,708.87	+1.25%

Markets: All three major U.S. stock indexes inched up yesterday, driven by gains from chipmakers like Intel, Micron, and Nvidia. Oil prices jumped after Donald Trump said the U.S.’s ceasefire agreement with Iran was on life support following the latest round of talks.

GOVERNMENT

Police corruption scandal could derail prosecutions

Source: Shutterstock.

A pile of criminal cases are about to get a hard second look.

What happened: Around 30 ongoing federal prosecutions are being affected by the corruption scandal that rocked the Toronto Police Service in February, per the Globe and Mail, putting a number of serious cases at risk of being tossed out over their connection to accused officers. The majority of the prosecutions caught in the crosshairs are drug cases.

Corruption and misconduct allegations can sink criminal cases that often rest largely on police officers’ testimony and the evidence they collected.

Catch-up: In what was billed as one of the largest police corruption scandals in Canadian history, seven Toronto police officers were suspended earlier this year and are now facing a flurry of criminal charges.

The officers are accused of participating in drug trafficking, robberies, taking bribes, leaking confidential information to organized crime groups, and even plotting the murder of an Ontario corrections officer.

Some officers allegedly shared sensitive data with gang members, who then used the intel for extortion schemes and shootings across the province.

Why it matters: The ripple effect of the corruption scandal could extend well beyond the 30 or so cases currently being reviewed. Any old case that one of the accused officers worked on could also be reopened, given that police corruption can be introduced as new evidence in an appeal.

Our take: There are likely cases that deserve another look given the corruption allegations, but the reputational damage of this scandal could very well damage prosecutions with no connection to the accused officers. Some experts argue that defence attorneys across the country could use the scandal to try to discredit the testimony of other police officers, as well.—LA

BIG PICTURE

Source: Shutterstock.

OpenAI is getting into the consulting biz. The AI startup launched a new consulting services business, called DeployCo, backed by US$4 billion from a group of investors, which notably included major consultancy firms like McKinsey and Bain & Co. The consulting industry offers OpenAI a potentially lucrative revenue stream to help fund its infrastructure investments, while the McKinseys of the world are betting that partnering with frontier AI labs can reduce the risk of clients replacing their services with AI tools. (Reuters)

Ottawa and Telus are plotting a major data centre expansion in B.C. AI Minister Evan Solomon announced that the feds would help Telus build two new data centres in the Vancouver area, as well as expand its existing facility in Kamloops. It will be the first project under a new federal initiative to spark the construction of more domestic AI infrastructure projects and reduce reliance on American tech giants. (The Canadian Press)

Disney has already made US$2 billion at the box office this year. It’s the first Hollywood studio to eclipse the $2 billion mark in 2026, following the success of titles like The Devil Wears Prada 2, the newest Avatar, and Zootopia 2 (further proof that sequels are cash cows). With Avengers: Doomsday, a new Star Wars, and Toy Story 5 slated for release this year (more sequels!), it’s looking like it’ll be a record year at the box office for Disney. (ScreenRant)

What else is on our radar:

The number of Canadians travelling to the U.S. increased last month for the first time since December 2024.
Shein is accusing rival Temu of “industrial scale” copyright theft, including using thousands of photographs lifted directly from Shein’s website to sell copycat clothes.
The World Health Organization confirmed a seventh hantavirus case linked to a cruise ship outbreak.
Google says it caught a hacker using an AI-generated tool designed to exploit an unknown vulnerability in a widely used software.

Your investment statements impact Canada’s forests.

Canada's securities regulations still default to paper delivery for mutual fund and ETF investors. The result? The industry burns through an estimated 882 tonnes of paper every year, needing a forest nearly three times the size of Stanley Park just to help offset the associated emissions.

Here's the wild part: in a recent survey, 90% of investors say they actually prefer digital delivery once they understand the environmental impact.

Fidelity is advocating to change the rules so digital becomes the default, with paper available on request. The case is hard to argue with:

Approximately 176 million sheets of paper and 116 million envelopes sent annually
Research suggests no meaningful difference in investor comprehension between paper and digital
The CRA already defaults to digital. Investment regulations are the holdout.

Read Fidelity's quick-facts on the eDelivery issue and see why it matters.

WHAT THEY’RE SAYING

Source: @AGomezFCC / X.

What they’re saying: “What Disney and ABC are facing is not a series of coincidental regulatory actions but a sustained, coordinated campaign of censorship and control … aimed at pressuring a free and independent press and all media into submission,” wrote Federal Communications Commissioner Anna M. Gomez in a letter to Walt Disney Co.

Why it matters: It’s highly unorthodox for any member of a government regulator — let alone a commissioner — to tell a company it’s investigating that its own probe is meritless. It’s even more unorthodox that a senior regulator claims a federal investigation is the result of an intimidation campaign stemming from the highest level of government.

ECONOMY

Food inflation is coming, but Canada should be spared the worst

Source: Veronica White / Unsplash.

It’s once again time to talk about agriculture and supply chains (and that’s almost never a sign of good news).

What happened: Food inflation is expected to pick up thanks to the closure of the Strait of Hormuz, which is not only a key channel for oil and gas, but also the world’s fertilizer supply, according to a new TD report.

Much of the world’s fertilizer trade passes through the strait, including around 25% of global urea exports, 13% of diammonium phosphate exports, and nearly 50% of sulfur exports.
Prices of these key agricultural inputs are already surging, particularly in countries most dependent on fertilizer imports in Africa and Asia.

Why it matters: Higher farm input prices will eventually get passed on and show up at the grocery store in the form of higher consumer prices.

Yes, but: Canada is uniquely positioned to weather this shock in the food supply chain better than most. Canada’s crop inventories are still high, offering some cushion on prices, we only import 5% of our urea from the Gulf, and Canada’s potash industry stands to benefit from a global fertilizer crunch.

Most of what we pay for food comes from non-farm costs, like transportation and retail — even if wholesale food prices rise, that will limit the impact on prices at the grocery store.
“Existing inventories and domestic production advantages should contain the hit to consumer prices,” TD writes.

Our take: In Canada, it will likely be farmers who get squeezed more than consumers — they are price-takers, and companies in other parts of the supply chain will be reluctant to push price hikes on shoppers already fed up with expensive groceries.—TS

ONE BIG NUMBER

🔬 80. Scientists that Canada has recruited from around the world over the past year as part of its Canada Leads program. Toronto’s University Health Network launched the initiative last year to attract top foreign researchers, particularly from the U.S., and currently has 800 scientists who have expressed interest in coming to Canada.

PEAK PICKS

Long read: This is a fascinating attempt to figure out how much sooner major inventions could plausibly have been discovered.
The New York Times is turning Wordle into a TV game show.
Inside Canada’s push to get a spot in Eurovision.
The swanky art fair where every piece is free (Bloomberg News, paywalled).
How restaurant merch became the band T-shirt of the 2020s.
Deals and wheels: Why the F1 paddock became the hottest place for startups to find investors.