Lip service

Good morning. Mexico and South Africa open the World Cup today, meaning there are just a few hours left to enter our Knockout Challenge and prove you’re the Peak reader with the best soccer prognostication skills. Here are some interesting stats we’ve seen so far:

Everyone thinks Canada is advancing. Canada lands in the Round of 32 in 96.1% of brackets, but only 32.4% pick Les Rouges to actually win Group B, deferring to Switzerland (55.7%).

Group D is the only real coin flip on the board. USA tops the group in just 45.5% of brackets. Every other group has a leader above 55%.

Peak readers are surprisingly bullish on Paraguay. While Sportsnet ranks Paraguay last in their group, Peak readers pick them to advance 67% of the time.

Argentina is the bracket's safest bet, winning Group J in a whopping 96.4% of entries.

Agree with these takes? Disagree? Don’t wait around, submit your bracket for a chance at eternal newsletter glory!

Today’s reading time is 5½ minutes.

Markets: Canada’s main stock index hit a three-week low yesterday due to Middle East tensions and future rate hike fears. Meanwhile, Apotex made its market debut, finishing up 12.5% and generating ~$1.3 billion in gross proceeds — the largest TSX IPO since 2021.

Cigarettes may be enjoying a cultural renaissance, but the kids these days have found a new nicotine fix. 

Driving the news: A new study found that 8.5% of Canadians in their 20s are now using nicotine pouches, a more than 10-fold increase from 2023. Over the same span, the share of young people who have tried a nicotine pouch has more than tripled to 34.8%. 

Catch-up: Nicotine pouches are a more subtle, smoke-free version of chewing tobacco that users tuck between their lip and gum. An army of so-called Zyn-fluencers online has aggressively marketed the pouches to young men, many of whom have been sold on the (unsubstantiated) promise that they can give you a boost of focus at work or the gym.

Why it matters: These pouches have become a new generation’s cigarettes. Ten times as many young people are regularly using them than just a few years ago, and Ottawa’s attempts to limit their sales to pharmacies haven’t been very effective. 

Bottom line: After years of falling smoking rates, researchers say nicotine usage in Canada is no longer in decline. Despite tobacco companies' insistence that pouches are simply helping smokers quit, it’s clear that they’re also introducing a whole new cohort of young non-smokers to nicotine.—LA

The Bank of Canada held its key interest rate steady at 2.25%. For the fifth consecutive decision, Governor Tiff Macklem and the BoC left its benchmark interest rate unchanged. Macklem said that the economy was weaker than anticipated in the first quarter, but that he doesn’t believe Canada is in a recession (by some measures, the country fell into a technical recession in Q1, though this is a hotly debated matter among economists right now). The BoC is expected to keep interest rates unchanged for the rest of the year. (The Canadian Press)

Ottawa officially rolled out its youth social media ban. The feds tabled a bill that would force social media platforms and live-streaming services to restrict all accounts for children under 16 years old. The law includes a carve-out for social media companies that can prove they’ve mitigated the risk their platform poses to kids. A new digital regulator will outline the safeguards social media companies need to put in place to get youth accounts back on their platforms. It’s unclear when exactly the ban will come into effect, but government officials estimate it could be 18 months after the law is passed. (CBC News)

Trump says the U.S. won’t renew CUSMA. Unsurprisingly, the U.S. president confirmed that he wouldn’t be re-upping the free trade agreement, adding that the U.S. “doesn’t need anything that Canada has.” If CUSMA is not renewed, the deal will be reviewed annually for up to a decade, unless one of the three countries exits. (CTV News)

📡 What else is on our radar: 

Close your eyes and picture the dish you always order. The one you recommend to friends. The one that makes a place feel like your place.

Now imagine it quietly disappears from the menu because the restaurant can’t find enough people to keep up.

That is what labour shortages put at risk.

Restaurants are Canada’s 4th largest employer, supporting 1.2 million jobs and a $125 billion sector. Yet today, 70,000 foodservice jobs are vacant.

Eventually, that pressure lands somewhere we all notice: the plate.

So, what happens when those hands are harder to find? We think Canadians should know.

A geneticist at Columbia University and researchers from a startup called Nucleus Genomics published a paper online (that is not yet peer-reviewed) detailing how they edited genes in a human embryo with previously unseen precision. Through a method called base editing, they were able to successfully change two genes — they also had unsuccessful attempts.

Why it matters: We’re a very long way from designer babies being a thing, but this development could one day be part of making the controversial concept a reality. As the tech improves, it will create a lot of ethical debates about whether the ability to potentially alter deadly or debilitating mutations in an embryo is worth opening the door to modern eugenics.

Canada’s top banking regulator wants big banks to do more for small businesses.

Driving the news: Peter Routledge, the head of OSFI, told a Senate committee on banking, commerce, and the economy that Canada’s banks can afford to lend more to Canadian small- and medium-sized enterprises (SMEs), and should shift their strategies to do so.

Catch-up: OSFI has been nudging lenders to drum up more cash for local businesses for a little while. Last year, the regulator changed capital requirement rules for smaller lenders to make SME loans less onerous. It’s now considering doing the same for the Big Six banks. 

Why it matters: Boosting institutional investments in Canada is a hot topic right now (see also: pension funds), and Canada’s SME space could really use a lift. According to an MEI report, Canada lost 151,000 businesses and entrepreneurs between its peak in 2005 and 2025. That number is on track to get even higher as business closures outpace openings.

Zoom out: Part of the solution could lie in reducing SME’s dependence on big banks for loans. The Competition Bureau is working on a study on how to improve the lending environment for SMEs and create more opportunities for non-traditional lenders like fintechs.—QH

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🇺🇸 4.2%. The U.S.’s annual inflation rate in May, the highest level in three years. The war in Iran, which has sent energy prices skyrocketing and disrupted supply chains for certain other chemicals, is a major culprit. The rising prices will likely force the Federal Reserve to hold off on interest rate cuts, and perhaps even hike rates — a possibility that has depressed equity investors.

Let the good times roll with today’s mini-crossword, the daily sudoku, Codebreaker, and Who’s Who!