Separate ways

Good morning. The Globe and Mail released its annual ranking of Canada’s 100 most livable cities and, once again, Metro Vancouver dominated, with North Vancouver, West Vancouver, and Pitt Meadows finishing first, second, and third, respectively. Ottawa, which rose an impressive 12 spots on the list from last year, was named the most livable major city.

If you have any complaints, don’t worry, we already agree that wherever you live was ranked too low/too high.

Today’s reading time is 5½ minutes.

Markets: Shares of Canadian tech company Celestica nosedived 13.5% yesterday as investors worry about the viability of high AI spending. Meanwhile, Apple shares jumped after market close as the tech giant reported record quarterly revenue and iPhone sales.

As Canada’s premiers met with the prime minister yesterday to game-plan for the upcoming CUSMA review, a giant Alberta-shaped spectre hung over the proceedings. 

Driving the news: The U.S. State Department confirmed reports that leaders of a far-right separatist group, the Alberta Prosperity Project, met with officials three times since last April. The group plans to meet State and Treasury officials next month with a huge ask: a $500 billion credit facility to help start the new nation if an independence referendum passes. 

Big picture: When asked about the meetings, Alberta Premier Danielle Smith said that the U.S. should “respect Canada’s sovereignty” and that Alberta’s delegate to D.C. would raise the issue. PM Mark Carney didn’t have much to say besides repeating the demand to respect sovereignty.

Why it matters: Sources told the Financial Times the U.S. Treasury isn’t bankrolling squat, but the incident shows how the separatist movement gives the U.S. an opportunity to sow dissent at a time when it's actively trying to undermine Canada’s economy and autonomy. 

What’s next: As of right now, separation feels quite unlikely. A new Ipsos poll found 29% of Albertans support separating, with that number halving when asked to consider the financial hardships. However, the Alberta Prosperity Project claims its own internal polling shows 40% support for separatism provincewide, with support jumping to 60% in rural areas.—QH

General Motors lays off 500 staff at its Oshawa plant. The automaker is cutting one of its three shifts at the Ontario plant, a move that will put up to 1,200 Canadian autoworkers across the supply chain out of work. GM had previously announced that it would scale back shifts at the Oshawa plant after Donald Trump announced targeted tariffs on Canada’s auto sector. (CBC News)

Donald Trump is threatening to tariff Canadian aircraft. The president says he’ll “decertify” and apply a 50% tariff on Canadian-made aircraft unless Canada certifies Gulfstream aircraft. Gulfstream jets are already allowed to fly in Canada, though the aviation regulator is in the process of reviewing changes to some of its aircrafts systems. (CBC News)

Pierre Poilievre set for leadership vote. Conservative Party members will vote tonight on whether to keep Poilievre on as its leader. If he passes the vote — which he’s expected to — it would be the first time since 2004 that the Conservatives have stuck with a leader who lost the previous election. (BBC News)

SpaceX and xAI are in merger talks. The two Elon Musk-owned companies are negotiating a merger ahead of a planned initial public offering. SpaceX was reportedly eyeing a standalone IPO that would value the space company at US$50 billion, the largest public offering valuation ever. With xAI rolled up into the company, who knows how high that number will get. (Reuters)

Manulife has started using AI to analyze life insurance applicants. The company’s in-house AI tool is only permitted to approve life insurance applications and cannot deny claims. Manulife says it has screened the tool for biases, but regulators have voiced concerns about how AI models trained on historical data could discriminate against certain applicants. (The Logic)

Wealthsimple is teaming up with Canada Post to accept cash deposits. The fintech company will start taking cash deposits at 5,500 Canada Post locations, a partnership that some experts say could give the postal service a much-needed boost. (Globe and Mail)—LA

Toronto fintech Float Financial raised $100 million in debt. The cash will help Float expand its credit card products for small and medium-sized Canadian businesses as the startup looks to hire 50 to 60 more employees (including recently laid-off Spotify workers). 

Why it matters: Float now counts some 6,000 Canadian businesses as customers, including high-profile firms like Cohere and Neo Financial. The startup’s customer base grew by 60% over the past year, while revenue was up 70% — all without leaving the Canadian market. Notably, Float says it has no plans to expand into other countries.

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Canada’s most valuable company is laying the groundwork for a Middle East expansion. 

Driving the news: RBC is applying for a banking licence in the Middle East and is preparing to open offices in cities like Abu Dhabi and Riyadh, according to the Globe and Mail. The lender says its European offices have been dealing with a growing number of client requests in the Gulf region. 

Why it matters: With economic stability top of mind in Canada, the idea of deepening ties with the Middle East — which would have felt like a moral sin a few years ago — has become far more palatable to Canadians. That’s given Ottawa and Canadian businesses free rein to deal with one of the largest sources of foreign capital in the world. 

What’s next: Ottawa is slated to kick off formal trade negotiations with the UAE next month, with liquefied natural gas and port infrastructure investments at the top of its wish list.—LA

🥽 $19.1 billion. How much Meta lost from its virtual reality division last year. The company has put a lot of eggs in the VR basket, but last month, it laid off more than 1,000 employees in the division. In Meta’s earnings call, CEO Mark Zuckerberg said he expects VR to lose the company around the same amount of money this year.

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