📈 Hitting the mark

Good morning. 🎵 Cue Centerfield by John Fogerty. 🎵

The Toronto Blue Jays begin their quest to return to the World Series with tonight’s season opener against the Athletics, airing on Sportsnet at 7:07 p.m. Eastern. The Jays have the fifth-best odds to win it all right now, but a lot can change over the course of 162 games. We have the utmost faith that the season will end in champagne instead of tears this go around. 

If you want to get hyped (as if you aren’t already) this Player’s Tribune piece from beloved utility infielder Ernie Clement is a must-read. 

Today’s reading time is 5 minutes.

Markets: The market rollercoaster kept on rolling yesterday, with Canada’s main stock index and top Wall Street indexes all taking sizable hits as potential U.S.-Iran war resolutions faced more setbacks.

It may be a little late, but Canada has finally followed through on a promise it made to its allies 20 years ago.    

What happened: NATO announced that for the first time, Canada’s defence spending has hit the alliance’s target of 2% of GDP. Ottawa has allocated $84 billion over the next five years to defence, the largest investment that the Canadian military has seen since the Korean War. 

Why it matters: For two decades, Ottawa took heat from the Americans for not hitting the NATO target and piggybacking off of their military. Now, it’s largely the ruptured relationship with the Americans (and far too many 51st state ‘jokes’) that has sparked this wartime defence spending spree. 

Bottom line: The billions in extra defence spending will inevitably crowd out other budget priorities like housing and healthcare. That said, continuing to miss the NATO defence targets also risks hurting Canada’s standing with its allies and would likely reduce Ottawa’s leverage in trade negotiations with the U.S.—LA

Xanadu goes public today at a $3.1 billion valuation. The Toronto-based quantum computing firm starts trading on both the Nasdaq and TSX this morning, marking one of the largest Canadian tech IPOs ever. Xanadu CEO Christian Weedbrook told The Peak that the company is aiming to build a quantum data centre in Toronto by 2030, adding that Canada is positioned to become a hub for the industry. “[Quantum] is going to be based here, and people will come to us rather than us going to other countries.” 

Ottawa tables election law reforms. The Liberals introduced a new bill aimed at deterring foreign interference in elections, combatting deepfakes and misinformation, and cracking down on bribes and illegal political donations. The reforms, which would apply year-round instead of strictly during election cycles, significantly increase the penalties for breaking the election laws. (CBC News)

Canada’s competition bureau is reviewing the Paramount-Warner Bros. merger. The competition watchdog is investigating the potential impacts that the blockbuster deal could have on Canada’s entertainment industry. Both Hollywood studios have significant operations in Canada, and cross the automatic threshold of $93 million in Canadian assets or sales to trigger an investigation. The deal is expected to pass regulatory scrutiny in the U.S. (Do Not Pass Go)

📡 What else is on our radar: 

For most Canadians, rent or condo fees represent their single largest monthly cost. And until now, paying with a credit card meant absorbing a transaction fee that wiped out any reward value before it started. Casa is changing that.

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Here's what that means for you:

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Calgary-based cooling tech company CoolIT Systems has been sold for US$4.75 billion. The deal marks one of the largest exits ever in Canada’s tech sector, and is a major win for private equity group KKR, which bought the Canadian company for just $270 million three years ago. 

Why it matters: CoolIT specializes in building systems that cool down the GPUs that power large data centres. Because they consume so much electricity, these clusters of chips can run extremely hot (and need to take a chill pill). With the AI data centre buildout just getting started, demand for CoolIT’s systems is only set to grow.

The nation’s federal procurement watchdog just dropped what they called the “most shocking” report of their entire tenure.

Driving the news: Canada’s Procurement Ombudsman released a damning report about Ottawa’s Indigenous procurement strategy, detailing widespread confusion among federal departments, resulting in guidelines not being followed. It also warns that gaps in the system open the door for non-Indigenous firms to use Indigenous businesses as shell companies. 

Catch-up: In 2021, the feds revamped the Procurement Strategy for Indigenous Businesses (PSIB), setting a target to procure 5% of the total value of federal contracts for goods and services from Indigenous companies. To qualify, a business must be at least 51% Indigenous-owned and at least 33% of the work must be done by an Indigenous contractor.

Yes, but: Necessary steps often aren’t followed to ensure the legitimacy of contractors. The report reviewed 27 procurement files across three different departments and found that in 20 instances they failed to check the Indigenous Business Directory to confirm if the supplier was registered or exempted. 

Why it matters: In 2024, the Assembly of First Nations estimated that just 1% of federal contract spending goes to Indigenous businesses due to loopholes and negligence. That’s a massive black mark on economic reconciliation and the efficacy of federal contracting.—QH

When it comes to vaccines, 21% of Canadians say they won’t get vaccinated and 24% have declined a recommended vaccine.

Among those who declined a vaccine, half point to worries about side effects. For those who accept vaccines, one third say they trust them more if they’ve been studied for at least five years.

Canadians trust experts most for vaccine information, with family doctors trusted by 78%.

Learn more about what’s driving trust in Canada.

🌎 Hint: This city sits on more than 100 hot springs and is famous for its outdoor bathhouses, giving it the unofficial title of the spa capital of the world. If you want to get around, its metro system is the world’s second oldest, trailing only London. Plus, it’s a hotspot for Hollywood productions, including Dune and Mission Impossible. To eat, local delicacies include goulash and chimney cakes. 

Think you know which city this is? Lock in your guess here.

💰 $11 million. Compensation that Edward Rogers is looking to block MLSE stakeholder Larry Tanenbaum from receiving from the $250 million estate of his late mother, Loretta Anne Rogers. It adds to an existing rift between Rogers and Tanenbaum, whose company owns 25% of MLSE — a stake that Rogers Communications has the right to buy in July.

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