Put it in reverse

Markets: Canada’s main stock index fell for the third straight session yesterday as the energy sector dropped on lower oil prices. However, cannabis stocks continued to notch substantial gains, with Tilray up 26.9%, Curaleaf up 23.4%, and Canopy Growth up 10%.

Even an electric version of the world's best-selling truck couldn’t get people to give up the gas pump.

Driving the news: Ford is abandoning the electric model of its wildly popular F-150 truck as part of a larger pivot away from its money-losing EVs. The automaker will take a US$19.5 billion hit this quarter — mainly from its EV division — which is more than the company’s operating income for the past three years combined. 

Why it’s happening: Demand for EVs in North America has ground to a halt. Prices are still higher than gas-powered cars, charging infrastructure has been patchy (putting the onus on drivers to install and pay for home chargers), while government EV credits in Canada, the U.S., and even Europe seem to be flip-flopping with every election cycle. 

Why it matters: With automakers like Ford, GM, and Stellantis punting on their EV investments, there’s growing concern that Ottawa may have also jumped the gun with the money it poured into the sector. About $32 billion of Canada’s $46 billion of investments in major EV projects were either stalled or in serious jeopardy as of late May.

Zoom out: China already makes 70% of the world's electric cars. As upstarts like BYD continue to expand into new markets (and automakers like Ford pull back), it feels more and more likely that the future of the EV industry will run through China. Where that will leave the North American auto industry is an open question.—LA

Warner Bros. prefers its Netflix deal over Paramount’s bid. Warner Bros. Discovery is planning to reject Paramount’s takeover bid this week, citing concerns over the company’s financing. Netflix has agreed to buy Warner Bros. studio and streaming business for US$83 billion, while Paramount has offered to buy the entire company — including its CNN and TNT cable networks — for US$103 billion. (Bloomberg News)

BDC opens the door for investment in military equipment producers. The venture arm of the Business Development Bank of Canada will remove restrictions that have stopped many VCs from backing companies that sell military products. (The Logic)

Ottawa is opening consulates in Alaska and Greenland. In a bid to shore up Arctic security, the feds will build new facilities in Anchorage, Alaska and Nuuk, Greenland. Minister of Foreign Affairs Anita Anand said the Arctic has become Canada’s top foreign policy priority. (Reuters)

Instagram is putting Reels on your TV. Meta will begin testing a TV app for Instagram Reels on Amazon Fire devices. Finally, you can doomscroll on the big screen. (CNBC) 

U.S. unemployment hit a four-year high of 4.6% in November, despite the economy adding more jobs than analysts expected. (BBC News)

FIFA plans to offer US$60 World Cup tickets after facing backlash. Each country’s soccer federation will be in charge of giving away the affordable tickets to its most loyal fans. Not sure how they plan to determine that, but we think anyone who was in the stands watching 90 minutes of blizzard soccer deserves to be up for consideration. (CTV News)

From home improvement projects to burritos… you can finance anything at the point of sale now – but the companies making those loans need financing too.

VersaBank’s Receivable Purchase Program (RPP) is a popular choice, used to the tune of $4B by more than 30 point-of-sale partners. The bank has proven the model in Canada – with stable margins, low credit risk, and high efficiency.

Now they’re growing it south of the border, which should drive higher return on equity, book value per share growth, and ultimately investment returns as it scales up.

Let’s look at the numbers:

Learn more about VersaBank’s US growth with Bullpen’s free research.

The federal government's new Buy Canadian Policy officially came into effect yesterday, as Ottawa looks to turn grocery aisle sloganeering into a concrete national investment strategy. 

What happened: The first phase of the policy — meant to boost domestic procurement for federal agencies, including for defence and the new major projects office — makes it so contracts valued at $25 million or more must prioritize Canadian companies and materials.

Why it matters: The feds are Canada’s single-largest buyer of goods and services, filling their shopping cart with $37 billion worth of purchases annually. Ambitious new initiatives are sure to drive that number up even further, with this new policy keeping more dollars at home.

Yes, but: Under the framework, any company with “a real footprint in Canada” counts as a Canadian supplier, a definition which could include foreign multinationals. Some critics feel that a stricter definition is needed to bolster economic sovereignty.

What’s next: The policy expands next year, covering all contracts valued at $5 million or more and launching a new procurement program aimed at small and medium-sized businesses.—QH

🤝 Meet Dan Park. He’s the CEO and co-founder of Clutch, Canada’s largest online used car retailer. We sat down with Dan to talk about why second-hand vehicles can get so expensive, what to consider when you’re buying one, and what he would fill his dream garage with.

What does your own car collection look like these days?

It's probably the most practical, unglamorous “car collection” you'll ever hear about. Our main day-to-day vehicle is a Volvo XC60. It’s a great safety-first choice for school pickups, drop-offs, and the constant rotation of kids’ activities. It’s comfortable, reliable, and gives us peace of mind when we’re running around the city. Then there’s the Mini Cooper S, which is the complete opposite. That’s my go-to for navigating Toronto traffic and squeezing into downtown parking spots that most SUVs wouldn’t even attempt. It makes city driving fun, which is something I appreciate more and more.

We also have a Chevy Traverse, which is our big-capacity option for ski trips, hockey gear, golf clubs, and the general chaos of family outings. It may not be a traditional “collection,” but each one plays a role in making our lives run a bit more smoothly.

Some second-hand vehicles like newer RAV4 models are almost as expensive as buying new — why does that happen?

It’s a perfect storm of supply constraints and strong consumer demand. Over the last few years, new-car production was disrupted by global supply-chain issues, and inventory simply didn’t return to normal as quickly as people expected. When buyers can’t get the new model they want, they shift to the used market, which pushes prices up on the most popular vehicles.

The RAV4 is a textbook example of that dynamic. It’s a reliable, fuel-efficient, all-purpose SUV with a great reputation. Because depreciation on models like the RAV4 is already low, the moment supply tightens, used prices float right up toward new-car territory. Until the new-car pipeline fully stabilizes, we’ll continue to see this kind of price compression on high-demand models.

What would be your dream car?

If I had more parking in Toronto and got through the practical, dad phase of my life, the two cars I would go after are a 1968 Ford Mustang Shelby and a 1958 Porsche 356 Speedster. 

The 1968 Shelby is known for its big-block V8 and straightforward, performance-focused design. It is one of the most recognizable muscle cars of its time. The 1958 Porsche 356 Speedster is almost the opposite. It is very lightweight, has a simple interior and delivers precise handling for a car of that era. Both models are iconic and represent very different but equally interesting approaches to engineering and design.

This interview has been edited for length and clarity. Read the full Q&A here.

💰 $202 million. Penalties that Canada’s money laundering watchdog FINTRAC has handed out since April, more than eight times its previous record for an entire year. Canada has long taken flack from its global peers for failing to crack down on criminal money laundering, and FINTRAC has now been given a wider mandate to penalize companies that turn a blind eye.

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Right on schedule, it’s today’s mini-crossword. 

And trailing right behind is our daily sudoku! (As this is still new, kindly report any bugs if you experience them).