Bye Bye Plastics!

The federal government is making good on a 2019 campaign promise to ban single use plastics with the announcement that plastics which are difficult to recycle will be the first to be scraped starting next year. 

What’s Banned: Plastic straws, grocery bags, stir sticks, six-pack rings, cutlery, and food ware made from hard-to-recycle plastics.

The government also plans to implement recycled-content requirements in products and packaging.

Why Ban Plastics?

Plastics can be really bad for the environment. The items being banned are often found washed up on shorelines and in water systems around the world. Canada hopes the reduction of plastic use will eliminate 1.8 million tonnes of greenhouse-gas emissions per year.

Controversial Approach

The ban is implemented by listing plastics as ‘toxic’ under the Canadian Environmental Protection Act (CEPA). This is controversial for two reasons:

  1. It allows the Liberals to circumvent parliament to bring in the ban.
  2. Defining plastics as a toxic material could have implications for the interprovincial and international trade of plastics. A spokesperson for the Minister of the Environment says this change won’t affect trade, explaining labelling plastics as toxic “does not necessarily mean they are ‘toxic’ in the way the word is commonly used.”

Alberta is upset that the ban will hurt their oil industry and the province's plans to become a recycling hub. Industry groups are voicing concerns about the ‘toxic’ label, and the necessity of single use plastics in PPE.

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Peak Picks

Watch the 13-minute guitar solo by the late Eddie Van Halen that made him a legend.

Airlines are one of the hardest hit industries by COVID-19. Check-out this visualization to see just how bad it is.

A decoupling of supply chains between China and everywhere else is underway. See how such a huge economic shift could all play out.
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China: Canada begins accepting Hong Kong pro-democracy activists as refugees in a move likely to anger China.

Hootsuite: Two Hootsuite employees claim to have been fired after bringing light to the company's controversial contract with the US Immigrations and Customers Enforcement.

Relief: Prime Minister Trudeau commits to an additional $600 million in relief for small

Facebook: The tech giant is set to remove all QAnon pages ahead of US election.
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Supercluster F*ck

We don't have a swearing policy at The Peak but I wanted to push the boundaries with that header. A new report by the Parliamentary Budget Officer alleges that the Government's supercluster plan is far behind schedule and unlikely to create as many jobs as promised.

What's a Supercluster?

  • In 2017, Prime Minister Trudeau's government unveiled a plan to create hubs of innovation by bringing together companies, post-secondary and research institutions.
  • The initiative focused on creating regional hubs for the areas of ocean sciences, artificial intelligence, advanced manufacturing, protein industry, and digital technology.
  • The Government contributed $918 million over five years to fund projects that would drive innovation and economic growth in the Supercluster's focus areas. The Liberals expected industry to contribute an additional $1 billion.
What's wrong with them? According to the independent Parliamentary Budget Officer, spending of the $918 million has been far slower than expected and job growth doesn't appear to be on track with the 50,000 new jobs that the Prime Minister originally promised.

Additionally, the PBO Officer couldn't find any international research to support the Liberals claims of how much the supercluster program would contribute to the Canadian economy.

One of the problems is the lack of IP protection. So instead of benefitting the Canadian economy, critics argue that companies are using the Supercluster's funds to develop innovations that pad their bottom line.

Bottom line: Superclusters were a marquee part of the Liberal Government's job creation plan. It all sounds great... but with much of the money going to huge corporations, it has the potential to become a corporate welfare boondoggle.
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The Big Breakup

  • Monopolies: Tech companies use their platforms to extort independent businesses. A frequently used example is Apple demanding that all apps on the App Store give them a 30 percent cut of their in-app purchases.
What are they going to do about it? The report suggests a number of solutions including breaking up of the big tech companies altogether, emboldening agencies that govern market competitiveness, and reforming anti-trust laws to create a stronger review of acquisitions.

What's next: To take action on their recommendations, the Democrats need to turn this report into legislation. But Republicans came out strongly against their recommendations, arguing that many of the proposals are too intrusive. As long as Republicans control the Senate, it's unlikely any of these proposals will become law.

Zoom out: The report was a pivotal step forward in the fight against big tech and provides a framework for future regulations that could enable antitrust cases against Facebook, Google, Apple and Amazon.

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No Relief for You

As millions of Americans struggling through the second wave of COVID-19, President Trump announced that he was halting COVID-19 stimulus talks with the House Democrats until after he wins the upcoming election.

What's the background:

  • Since the last COVID-19 stimulus package in June, Congress and the White House have been negotiating a new response plan to support households and businesses through the ongoing pandemic.
  • Last week, Democrats passed a new $2.4 trillion stimulus plan which was down from it's original $3.5 trillion. Secretary of the Treasury Steven Mnuchin proposed a $1.6 trillion package in response. Among other issues, the two parties were at odds over how much state and local aid to include.
Why did Trump cancel talks? The President is frustrated with the pace of negotiations and many of his conservative allies are hesitant to pay for a fifth relief package after approving $3 trillion in aid over the Spring.

What does this mean?

  • The election: Trump's announcement makes it harder to blame the Democrats and makes clear that the Republicans are blocking further aid. At first glance, this doesn't seem like the brightest political move especially coming from someone down 10+ points in the polls.
  • Needless harm: COVID cases are spiking again in many US states, prompting a second wave of business closures. Without government support, many small businesses will go under and hundreds of thousands of jobs could be lost. Making matter worse, victims of this economic crisis won't have access to any government support.
  • Economic turmoil: Earlier in the day, Federal Reserve Chairman Jerome Powell warned of 'dire economic consequences' if Congress and the White House couldn't agree on additional support. In response to President Trump's announcement, stocks immediately turned and the S&P 500 closed down 1.4%
What's next: It's all a bit unknown. One option is that the Senate Republicans pass their own version of a stimulus and force the House Democrats to counter it. But the closer we get to the November 3rd election, the more it's looking like no deal until the results are in.

What about Canada: Thankfully Prime Minister Trudeau and his Liberal Government are moving forward with a number of additional stimulus measures to assist Canadian households and businesses through this second wave.
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Why can't you Venmo in Canada?

Yesterday, Venmo launched their credit card in the US and it got The Peak's Slack thinking... why isn't Venmo in Canada? So we did some investigating and here's what we found.

What's Venmo? For those less familiar with our neighbours to the South, Venmo is a digital wallet that makes it easy to transfer money to friends.

Going to a dinner with buddies in LA and the restaurant won't split the bill? You can just open the Venmo app and instantly transfer money to the person who paid.

And it's super popular. In 2013, the company was acquired by PayPal and last year the app processed over $12 billion of transactions. The app is fast, easy to use and offers low fees... so why can't we use it in Canada?

Bank Supremacy: Over 15 years ago, Canadian banks were smart enough to see the potential of peer-to-peer online transactions.

So they all got together and agreed upon a standard technology that would let Scotiabank, TD, RBC and CIBC customers transfer funds between each other. That's where Interac E-Transfers came from.

This was a huge win for the banks. By teaming up to control the Canadian peer-to-peer payment infrastructure, the banks could block competitors and charge customers a per transaction fee.

Blocking Venmo: With US banks so fragmented, Venmo became an intermediary that enabled money transfer between institutions. And the banks – eager to get on the peer-to-peer bandwagon – were happy to let Venmo do the work of connecting all the systems.

But Canadian banks are perfectly happy with Interac. Venmo needs to be able to hook-up to your bank to work and with Canadian banks raking in the e-transfer fees, don't expect to be Venmo-ing anyone anytime soon.
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Market Highlights

  • COVID: The White House has agreed to FDA guidelines that makes it unlikely for any COVID-19 vaccine to be approved before election day.
  • Stocks: Markets closed lower after President Trump announced an end to stimulus talks.
  • Economy: Consumer spending has picked up in recent weeks as Canadians upgrade their homes and revamp their wardrobes.
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Peak Picks

K-pop megastars BTS (or at least the company behind them) are going public at around $115 USD a piece, hitting the upper range of valuation projections. 

Venice's new system of 78 flood gates — in the works since 1984 — were just successfully deployed at high tide for the first time to prevent flooding of the historic city.

Conspiracy theories are everywhere these days and vary wildly, but those who believe in then do tend to share things in common. Here's how to know if you're among the susceptible.

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Science: A University of Alberta virologist was awarded this year's Nobel Prize in Medicine for his work on hepatitis C.

Telcos: Canada's wireless carriers want the government to treat attacks on cell towers fueled by 5G conspiracy theories as "national security threats."

Energy: A TD subsidiary is installing arrays of Tesla batteries for energy storage use in Alberta.
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The Rent Is Too Damn High

Relief is coming for businesses struggling to pay their rent, according to Federal officials.

The highlights: 

  • The new program will allow businesses to apply directly for rent assistance without needing to go through their landlord.
  • It will target support for small- and medium-sized businesses. 
  • The program will replace the Canada Emergency Commercial Rent Assistance which expired last month. 
Why a new program: The old rent assistance program was not popular with businesses who argued it was overly complicated and required landlords to apply for the assistance. Many landlords refused, as they were required to take a 25% reduction in rent payable.

Zoom out: Coupled with the Wage Subsidy program, the Federal government hopes to keep as many businesses alive as possible during the pandemic. But with cases rising and economic restrictions back on the table, that will be no easy task.

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The Other Health Crisis

While less discussed than its effects on the body, COVID is also creating a serious mental health crisis. 

What's causing it: Obviously, the isolation of lockdowns, loss of the ability to socialize and enjoy hobbies with other people, and the anxiety of the pandemic are major factors. But economic anxieties are also damaging people's mental health — and that could result in a vicious cycle. 

From the Globe & Mail:

"People with mental health problems are typically the last to benefit when the economy booms and the first to suffer in a downturn, found a 2009 summary report by the Mental Health Commission of Canada.

"Employment problems and financial stress are key risks for suicide around the globe, with every one-per-cent increase in unemployment correlating with a 0.79-per-cent increase in the suicide rate."

Who is suffering: Well, everyone — but some groups appear to be having a disproportionately hard time. 21% of women report higher levels of anxiety than men (15%) during the pandemic. Part of this may be because women have lost their jobs at a higher rate than men.

The economic impact: A report from the Conference Board of Canada found depression and anxiety problems cost the Canadian economy a total of almost $50 billion each year.

Big picture: Mental health stresses have been excacerbated by the pandemic — some experts say nearly half of Canadians may now suffer with mental health problems — and addressing this issue will have to be a part of any serious national recovery.

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A Lack of Confidence

After rebounding over the summer, Canadian consumer confidence has stagnated

What happened: The Bloomberg Nanos Canadian Confidence Index measures people's financial and economic expectations. After dropping to a record low of 37 in April, the Index has risen to 53.1 — barely up from 52.7 in August and well below typical levels.

By the numbers: 
  • 51% of Canadians believe the economy will weaken over the next 6 months. Only 18% believe it will improve.
  • 14% of Canadians are concerned about their job security.
  • 28% of Canadians say their personal finances have taken a hit this year, higher than historical averages but lower than at the height of COVID. 
Why it matters: Low consumer confidence translates into more saving and less spending, which sucks demand out of the economy. Without demand, businesses will shut down, jobs will disappear, and economic recovery will take even longer.
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Make a will week— is that a real thing?

It’s as real as Shark Week is real. Albeit, much less exciting.

The BC Government, like many provincial governments and legal associations, pick specific weeks or months to bring attention to the importance of estate planning. The hope is it will encourage millions of Canadian adults (57% as you may have heard) to create their legal will and power of attorney documents. And wouldn’t you know: they picked this week to encourage you to make your will.

Why should I care?

Great question.

You should care because dying without a will (known as dying intestate) means your assets (money, property, valuables) will be distributed by the government formula in your province and it may not be how you’d wish.

It also means the courts would appoint a guardian to look after minor children if there were no surviving parents (yes, that could mean the sister-in-law you hate).

But I would be dead, so does it really matter?

Interesting point.

Creating a will and making your wishes known is not just for your benefit, it’s for the people you love. Knowing your wishes will provide clarity when they’ll need it the most.

Oh wow, I never thought about it that way

Brain twister, right?

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Testing Tribulations

COVID-19 is sweeping through the White House and Donald Trump's inner circle which is making us wonder: if COVID can penetrate the highest levels of American government, what chance do other workplaces have for operating safely in-person?

Some have said testing is key to bringing people back into offices, but the White House's outbreak shows the limitations of this strategy: 

  • Rapid tests like those used in the White House can deliver false negatives.
  • Someone can be infected and contagious for days before they have enough viral load to be detected on rapid tests in use today.
  • Imperfect testing can create a false sense of security that leads people to abandon other measures like social distancing and mask wearing.
Returning to the workplace also raises other thorny questions: 

  • Privacy concerns: Should employers know the identity of an employee has tested positive? Should their co-workers?
  • Scale questions: If someone tests positive, who gets sent home because of possible exposure? Co-workers who were nearby or the entire building?
  • Employee choice: Is it right for businesses to force employees back to the office despite the risks? What about workers in vulnerable populations?
  • Negligent bosses: And as one person asks in the Careers section of the Globe & Mail, how should you handle a manager refusing to comply with their own safety protocols?
Big picture: These are complex questions faced by most businesses now that will have a major impact on the lives of their employees and the trajectory of the economy. 

Dig deeper: This interview with Carbon Health co-founder Dr. Caesar Djavaherian helps clarify a lot of the issues around workplace re-openings.
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Another Crack in the Border

The border with the US is getting a little more porous as of October 8th, when restrictions on border crossings will be further loosened by Ottawa.

Border Background: Our border with the United States was closed on March 21st to all non-essential travel, in a move to curb the corona virus outbreak. There have been a number of instances of American sneaking through and causing trouble. In June, Canada authorized immediate family members of citizens or permanent residents to enter the country.

Who’s Allowed Now:
  • Extended family members of Canadian citizens or permanent residents. This includes grandparents, children and siblings.
  • People who have been in an exclusive relationship for more than a year will also be able to reunite with their partners.

What’s Needed:

  • Couples reuniting will need to provide a notarized letter attesting to the length of their relationship and that they’ve spent time in the physical presence of one another.
  • A pre-arrival authorization is required from the government before travelling.
  • In many cases a reason is also needed. According to the health minister this program applies to people who need to  “say goodbye to someone who is dying, provide care for someone who needs medical support or attend a funeral.”
  • A two week quarantine once entering the country, although in some cases exemptions may be granted on compassionate grounds.

Big Picture: Covid cases are shooting up on either side of the 49th parallel, the last thing we need is more flow back and forth when we should all stay put. But we get it, family should be together in tough times, let’s hope everyone follows the rules.
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RBC Sees Green

Ever think of Canada’s big banks as green? Probably not, but RBC is trying to change that with new policies that limit their lending to polluters and others who damage the environment.

Green Policy

  • RBC will not lend to new coal-fired power generators, thermal coal mines or coal mines that require mountaintop removal.
  • No cash for new clients that get more than 60 per cent of their revenue from thermal coal or coal-fired power generation.
  • And absolutely nothing for the controversial practice of drilling in Alaska’s Arctic National Wildlife Refuge.
  • A special committee will need to approve lending for arctic oil exploration.
  • It will lend to clients who derive some of their revenue from polluting practices if they show they have a plan to change.

Drop in The Bucket: RBC won’t be divesting from any current investments in fossil fuels, or stop lending to current clients. They rank at the top of Canadian banks and fifth in the world in lending to the fossil fuel industry, having doled out $140 billion since 2016.

Zoom Out: Some environmental activists are applauding RBC, especially those with a focus on preserving Alaska’s Arctic. The pressure is now on other banks and financial institutions to make value based investing decisions. Relatedly, the CPPIB has come under pressure for their investments in fracking.

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Crushing The Recovery

Bank of Canada Governor Tiff Macklem took over the reigns just as covid-19 ravaged the health of people and economies across the globe. Macklem gave a speech to the Canadian Chamber of Commerce and an interview with the Globe and Mail about the path ahead. Here’s what he’s thinking:
Uneven Pain: Covid job losses disproportionately impacted women, 15- to 24-year-olds, low-income workers, visible minorities and Indigenous Canadians.

Slow Comeback: Canada has already recovered two million of the three million jobs lost, but Macklem warns of a “recuperation phase,” which will see slow progress in bringing back those final one million jobs.
Crush It: That’s the lesson Macklem lessons learned from the last economic crisis. He intends to take the mentality that the crisis needs to be “overwhelmed.”

The Plan: BoC will be sticking with their commitment to keep interest rates at the rock bottom 0.25% until 2023, and continue to buy $5 billion a week of Canadian Government bonds on the open market.
Is the Enough? No. Macklem says that monetary policy isn’t a fix-all but if he does his job right he’ll be able to create the economic conditions for success.

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Covid Catches Up

In case you were in a cave this weekend, we’re very jealous. Also, the president of the United States has been hospitalized with covid-19. It’s almost impossible to avoid this story over the past few days, with many moving parts and big implications, we’ll break it down.
Tricky Timeline

President Trump tweeted at 1am on Friday morning that he and the first lady tested positive for Covid-19, a timeline of events indicates that the president, staff and doctors knew about the diagnoses days earlier.

  • September 26: A ceremony is held at the White House to announce the nomination off Amy Coney Barrett to the Supreme Court. At least 8 covid cases are linked to this event.
  • September 29: Trump and his family attended the presidential debate in Cleveland, they did not wear masks.
  • September 30: Trump and staff, including Hope Hicks who felt unwell and later tested positive for covid, travelled to Minnesota for a fundraiser and rally.
  • October 1: The President flew to New Jersey and attended an indoor fundraiser. That night, following the news Hope Hicks tested positive, Trump announced he and Melania were being tested.
  • October 2: At around 1AM Trump tweeted that he and Melania tested positive for covid-19. At 6PM day the President was transported to Walter Reed National Military Medical Centre.

Here’s where things get really tricky. On Saturday, the White House physician Dr. Sean Conley said the President was “72 hours” into his treatment, meaning he would have been diagnosed midday Wednesday. Another doctor caring for Trump referred to a treatment given “48 hours ago,” placing a diagnosis at least earlier on Thursday. Both statements were later walked back.
Clear as mud, right?

Supreme Spreader Event

The nominating event for Trump’s Supreme Court pick looks like a super spreader event that has sickened a number of senior staff including Kelly Ann Conway and campaign manager Bill Stepien, along with Senators Mike Lee (R-UT), Thom Tillis (R-N.C.) and former Governor Chris Christie (R-N.J.).

Courting Defeat

Republican lawmakers were set to push through the nomination of Judge Barrett ahead of the November election, the outbreak is a setback for them. Two of the Senators who sit on the Judiciary Committee now have covid, and a third republican Sen. Ron Jonson (R-Wisc), has also tested positive. Democrats are insisting that holding hearings would endanger other Members of Congress and staff. With 3 Republicans sidelined, one defecting GOP Senator could derail the whole thing.

Look Ahead: There are 29 days until election day where anything can happen. Trump will be in quarantine for at least two weeks (if he listens), severely limiting the chest pounding campaigning he favours. In the meantime Biden seems to be getting more comfortable leaving his basement.
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Spy vs. Spy: It's a bit of a secret, but private detectives are everywhere now. On one hand they can be used to create transparency, on the other, private spies are used to push corporate power. 

Magic Mushrooms: Not those kinds of magic mushrooms, actually those kinds of magic mushrooms and many other amazing mushrooms are having a moment; being grown in restaurants for ultra local dishes and being used to develop sustainable building materials. 

Winning: Mike Postle went on a winning streak the defied all odds, eventually his opponents called him a cheater, then things got messy. 

MY WIFE: If this line never got old to you, you'll be pumped that Borat is back with a new movie. Play the trailer on repeat to escape reality. 

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