Peak Lookout

Jobs Numbers: The US Bureau of Labour Statistics will release September's numbers at 8:30 this morning. Canada's Labour Force Survey will be released on October 9th. 

Thank A Teacher: Monday is World Teachers' Day, remember to send your kid to Zoom U with an extra shiny apple.

VEEP Debate: If this week's presidential showdown wasn't enough for you, VP candidates Kamala Harris and Mike Pence will be squaring off in Utah on Tuesday night. 

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Friday Headlines

$10 Billion for Rebuid: The Canadian Infrastructure Bank will spend $10 billion to improve infrastructure, with a focus on broadband, energy efficiency retrofits, and agriculture infrastructure such as irrigation.
 
Senate Subpeonas Tech CEOs: The Senate Commerce Committee voted to subpeaona the Chief Executives of Facebook, Google and Twitter to testify about online censorship. The comittee hopes to hold the hearings before the election, hold on tight. 
 
AC Embraces Rapid Tests: Air Canada has ordered 25,000 of the newly approved Abbott Laboratories quick testing kits, to be rolled out initially with employee volunteers. The airlines hope to use testing more broadly among passengers in a bid to roll back the restrictive covid related rules that have hammered the industry.
 
Google Spends on News: Google is pledging to spend $1 billion to license news for a new product called Google News Showcase. Sounds neat, but we expect you to stick with The Peak. 
 
Restaurant Inusrance Skyrockets: Insurance companies are hiking rates on restaurants as they're being squezed by the pandemic. In some cases insurance costs have gone up 300% or outright refused to renew, citing unknown liabilities if a patron were to contract covid-19. 
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Friday Q&A with Chris Spoke, Founder of August

It's Friday, so that means it's time for Peak Q&A. 
 
Every Friday we feature someone in the Canadia tech, finance, or startup space doing something cool and pick their brain to get practical and actionable tips and advice for the rest of us. 
 
This week we are featuring Chris Spoke, founder of Toronto digital agency August.
 
What's one book that has taught you a lesson that you apply to your daily business life? What's that lesson?
 
Chris Spoke: Titan by Ron Chernow, which is one of the all-time great biographies. The lesson came from a JDR quote: "As soon as you can, get some one whom you can rely on, train him in the work, sit down, cock up your heels, and think out some way for the Standard Oil to make some money.”
Work hard, understand the role, delegate, and think of something else to do.

What evening and/or morning routines do you have that set you up for success?

CS: I'm most productive when l go to sleep early and wake up early. Nothing special beyond that. Gym first thing most mornings.

What are you involved in outside of your company? As in mentoring, boards, volunteering or other activities? How do you recommend others engage in activities outside of work and how do you give and get the most out of them?

CS: I'm the founder and lead organizer for a yimby (yes-in-my-backyard) organization in Toronto that advocates for increased housing supply. I think that this is an underrated issue in terms of importance, and think that we need to do more to ensure that Toronto is a city that's affordable and welcoming to all.

What advice do you have for students or young professionals who are trying to position themselves in a competitive job market. What can they do to make themselves stand out?

CS: Write and publish your thoughts online. Your resume tells me almost nothing. A longform essay on a topic you're passionate about can tell me a lot.

What's one app or another piece of technology that improves your productivity and you couldn't live without?

CS: Roam. I like it so much that I'm getting a dedicated ipad for it.

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Market Highlights

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Peak Picks

Death of the Deal: Friend of The Peak Chad Rogers wrote a great piece on how challenging it is for foreign entities to do deals in Canada during the pandemic.

Bubble Busting: Fun piece about what one reporter learned in the NBA bubble amidst a backdrop of racial tension and a global pandemic.

Fast Factories: Learn how Tesla builds their global network of factories so quickly. Hint: it's thanks to a pretty elaborate manual.

Community: With our institutions being hollowed out, McDonald serves as one of the last few community gathering places.
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Leftovers

Diversity: California rolls out diversity quotas for corporate boards.

NXIVM: Heiress Claire Bronfman of the Seagram’s fortune was sentenced to six years in jail for her participation in the NXIVM cult.

Lightspeed: Watch out ritual. Canadian tech darling Lightspeed released their order ahead product to help restaurants facilitate contactless takeout.

COVID: The second wave continues as Texas reports their largest daily jump since August.

Boeing: The FAA has given the go-ahead to Boeing's proposed fixes to their 737 MAX 8 aircraft.

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House Hunters

Toronto startup Properly announced that they raised $100 million in financing to power their online home buying platform.

What's Properly? Properly is an online home brokerage that lets buyers purchase a new house using their existing home equity before even listing their current property.

How do they do this? Properly uses a 'backup offer' that guarantees that they'll buy the house at market value if it doesn't sell. The seller uses the backup offer to securing traditional financing from a bank. If the house doesn't sell on the open market in 90 days, Properly will buy the house and re-sell it on their platform.

What's the 100 million for? CEO Anshul Ruparell says that the the capital will be used to buy houses from customers that don't sell. Properly recently launched in Ottawa and the GTA so the money will help meet demand in these markets.

Zoom out: As Marc Andreessen says, 'software is eating the world' and real estate is no exception. Watch as companies like Properly begin to challenge the real estate establishment with a more consumer-friendly offering.

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Nightmare on Pennsylvania Avenue

I'm sure many of you watched the 'Presidential Debate' on Tuesday evening. No matter how you feel about what's going on, the single most important issue for the health of the global economy is the outcome of the US Presidential election. Here's where we're at:

Election Day: We're just over a month away from Election Day on November 3rd.

National Polls: The Real Clear Politics average of national polls has Vice President Biden leading by 6.5% ahead of President Trump.

Battlegrounds: Battleground states are where the election will be won or lost. In these states, the election is much closer.

Polls give Biden a slight edge but the shift of a few hundred thousand votes could swing the election in either direction. In the critical state of Florida, Biden only has a 2 point advantage over Trump.

The Debate: And that debate... it's hard to see how either candidate won but voters disagree.

  • Post-debate CNN poll found that 6 out of 10 debate viewers said Joe Biden won the debate.
  • And a CBS poll also gave Biden the edge with 48 percent viewing him as the winner and 41 percent saying Trump prevailed.
Bottom line: With battleground states too close to call, it's still anyone's race.
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One Test to Rule Them All

In the midst of a surge in new cases, Health Canada approved a new rapid test for COVID-19. The Abbott Diagnostics ID Now test uses the same nasal swab as existing tests but can be processed on-site and get results in as little as 13 minutes.

Need for speed: As we enter a second wave of COVID-19, testing facilities across the country are overwhelmed. Ontario, in particular, is struggling to process tests fast enough due to lack of lab capacity.

  • Public health authorities can use rapid testing to quickly quarantine positive individuals and reduce the spread.
  • In-facility testing also increases overall testing capacity and reduces wait times for patients.
When will we get it: The Government of Canada purchased 7.9 million testing swabs and 3,800 of the analysis machines. No word on when they'll arrive.
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Advance Your Career From The Comfort of Your Own Home

We know you’re a digital-first professional. You read The Peak after all.

Now, add Excel, Tableau, HTML, CSS, and JavaScript and other DIY skills to your resume to take your career to new heights. 

Lighthouse Labs’ live online part-time classes can teach you all those critical tech skills (and more) in just six weeks. Learn from the best and get real-time mentor support.

Multiple time slots to fit your schedule. Next class begins Nov. 7. 
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Big Brother Goes Public

Yesterday, Palantir made its Wall Street debut on the New York Stock Exchange. Shares closed at $9.50 with a valuation of $21 billion. Palantir went public using a 'direct listing', removing the bank from the IPO process and saving the firm millions in fees.

What's Palantir? You can think of them as the tech that powers the surveillance state. Very Minority Report–esque.

  • Palantir builds software that helps governments collect and analyze data. Their clients include the RCMP, CIA, CSIS, and local police departments who use the slick platform to conduct intelligence operations.
  • Palantir is controversial. Critics argue that the company builds unethical spy software used to harass minority communities and infringe upon our civil liberties. And they make a point... it's reported that ICE (US Immigration and Customs Enforcement) uses Palantir's software to conduct raids on undocumented families.
Is Palantir a buy? Hard to say. On one hand, government contracts are highly lucrative, but they're also vulnerable to political change.

And it's not hard to imagine that a Biden Administration wouldn't be too pumped about issuing huge software contracts to a firm co-founded by Peter Thiel, an outspoken Trump supporter.

The Year of the IPO? Palantir wasn't the only company to do a direct listing yesterday. Asana, the project management platform, also went public via a direct listing and closed at a $5.5 billion valuation.

Both companies exceeded expectations so don't be surprised if more companies come out of the woodwork looking to go public.
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Secure Asset Storage & Logistics Solutions

No warehouse or storage facility for your business? No problem.

With no long-term contracts and the convenience of end-to-end service, Second Closet can help.

From restaurant patios to office furniture to files and marketing swag. Second Closet will pick up, securely store and move what you need, all for less than the competition.

Second Closet will also manage and maintain a digital catalogue of your assets, allowing them to securely store and efficiently move everything according to your needs.

Servicing Toronto, Vancouver, Montreal and Ottawa and offering savings of up to $750 for new customers.

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Peak Picks

No Strings Attached: American cities like Stockton, California are experimenting with guaranteed income policies. Now researchers are discovering the impact of no-strings attached cash transfers directly to residents.

Fusion Dreams: A new research paper has renewed optimism that fusion nuclear power could be generating electricity by next decade, representing a major step forward in clean power tech.

Elixir of Life: A new study finds drinking 1 to 4 cups of coffee per day may slow the progression of colorectal cancer, and "as coffee consumption increased, so did the benefits." To be clear: I didn't need this information to enjoy my four daily cups, but I welcome it.

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Leftovers

Shopify: The Canadian e-commerce platform is shuffling its executive leadership, with COO Harley Finkelstein moving to the President role and Chief Product Officer Craig Miller departing.
 
Google: The EU is poised to approve Google's $2.1bn takeover of Fitbit. The deal has attracted criticism and scrutiny over concerns about Google's use of Fibit's data.
 
TikTok: A U.S. judge found that the Federal government likely overstepped its authority in banning TikTok on national security grounds.
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Hospitality Woes

Canada's hospitality industry looked like it was beginning to bounce back, but a COVID resurgence is stopping the sector's recovery dead in its tracks. 

By the numbers:

  • From September 13 to 19, occupancy in Canadian hotels dropped 53% from last year.
  • From September 5 to 11, the number of domestic flights was 21% lower than the previous month.
  • In major cities, seatings at restaurants are down 55% to 70% from this time last year. 
What's next: With a second wave well underway, more economic restrictions are likely coming. Quebec has already ordered bars and restaurants shut down for most of October.

Zoom out: Emergency government relief kept businesses and workers afloat during the spring lockdowns. But the CERB and wage subsidy programs are winding down, meaning economic pain might be felt more acutely now than it was 6 months ago.

The jobs picture: As businesses rack up fixed costs with no way of bringing in revenue, layoffs are sure to follow. Disney is now a prime example of that: the company just announced it's laying of 28,000 theme park workers.

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Good Climate News (For Once)

This is a welcome story: good news about our prospects for fixing climate change!
 
A new study by the Institute for Sustainable Finance at Queen’s University says could meet its Paris Agreement targets with an investment of just $128bn. 
 
Why it matters: $128bn over 10 years is a surprisingly low number. To put it in context, the Federal government transfers almost $40bn every year for healthcare spending.
 
Dig deeper: The study maps out what needs to be done to reduce emissions by 789 million tonnes by 2030 and how much would have to be invested in each sector of the economy to achieve that target. 
  • Retrofitting buildings to make them more efficient is the "lowest-hanging fruit" and would require investment of $10.8bn.
  • The transportation sector would require the most resources: $52bn to bring emissions down enough.
  • Oil and gas — the most visible and politically contentious sector identified — could reduce emissions sufficiently with $26bn.
The big picture: This study, among others, suggests that climate change is a solvable problem with existing resources and technology. The missing ingredient to achieving that solution has, so far, been political will.
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The Death of the Office

It will surprise exactly no one that most offices are empty right now, and have been for months. And that means the commercial real estate sector is taking a beating

  • The vacancy rate in Toronto rose from 2.7% in Q2 to 4.7% in Q3.
  • Downtown Vancouver's sublease space has risen 30%.
  • Things are even worse in cooler markets: Calgary's downtown vacancy rate is nearly 30%.
The big question now: will offices ever recover?

  • The argument for: the pandemic is a temporary blip and things will more or less return to normal when it's over.
  • The argument against: the pandemic has permanently killed a large chunk of the office space market as companies will be unwilling to give up remote working.
  • How it looks from here: Several major companies (including Shopify) have already told employees they can work remotely permanently. Whether this becomes commonplace outside tech remains to be seen.
Why it matters: Office-dense downtown cores depend on the economic activity created by thousands of daily workers. Businesses in these areas will be hard-pressed to survive when the lion's share of their clientele work from home.

Missing your colleagues? Try VR. If you are missing out on the social interactions of office life, some suggest hopping on the Oculus Rift and holding meetings in 3D. Well, not actual 3D, but as close as you can get at the moment...

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Deficit Data Dump

The Parliamentary Budget Officer has released new projections for the Federal deficit and debt in the years to come.

Here's what you need to know: 

  • The deficit for the year is expected to be $328.5bn, down from earlier projections of $343.2bn.
  • The federal debt-to-GDP ratio is projected to reach 48.3% by 2022-23, up from 31.3%.
  • Economic growth is expected to be higher than previously projected. 
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  • A key measure of financial sustainability is the debt-to-GDP ratio: how much debt is owed as a share of the country's GDP.
  • Canada's debt-to-GDP ratio is still well below its peak of 66% in 1995-96.
  • The economic climate is very different now too: interest rates are low, which means the cost of sustaining the Federal debt is as low as its been in decades.
What's next: 

  • For now, the Parliamentary Budget Officer has said the Federal goverment's finances are sustainable, but "barely."
  • A higher debt-to-GDP ratio makes the Fed's finances more vulnerable to economic shocks like a worse-than-expected second wave or a rise in interest rates. 
  • But reducing spending and paring back emergency support programs during COVID may be even more painful.
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Amazon Bets on Canada

Amazon is placing its bets on Canadian talent, announcing plans to hire 3,500 tech and corporate roles in Vancouver and Toronto. The lions share, 3,000 jobs, will be in Vancouver bringing the city's total Amazonians to 8,000 by 2024. The 500 Toronto employees will bring that city's corporate headcount to 1,600.

Spin Outs and Side Effects
  • There are approximately 75,000 tech jobs in Vancouver with the average wage of $84,000. The addition of even more high paying jobs will intensify the battle for talent and attract more migration and immigration to the area.
  • $1.05 billion of venture capital was invested in Vancouver based companies last year. It's not uncommon for big tech employees to leave to start start-ups of their own. The growth of companies like Amazon and others in the city should help the startup and venture scene.

Real Estate Repercussions
The pandemic has led to a big shift towards work from home, a culture many tech companies plan to keep in place even post-covid. Amazon intends to continue to allow the "flexibility" of work from home, but adds that their employees "really value being able to be together."  Last November they leased 1.1 million square feet in The Post, a new complex being built in downtown Vancouver to make room for employee growth on top of their existing downtown offices. New Toronto employees will be housed on five floors of 18 York st.

Bottom Line: Amazon employs 21,000 full and part time employees across Canada, with plans to hire many more in corporate, tech and fulfillment roles. The e-commerce behemoth impacts our lives on a daily basis, and while we're optimistic about the jobs being created, let's keep an eye on some their less than savory labour practices.
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MEC Melee

Members of Mountain Equipment Co-Op, Canada's largest cooperative, are stepping up their fight against the sale of the beloved Canadian outdoor store to California private equity firm Kingswood Capital. The latest affront to members is the hiring of Jay Taylor to be the company's new President and COO once the deal is done.

Jay Who? Taylor is currently the CEO of LALO Tactical, which stands for Light Assault Lo-Vis Operator, a maker of military style boots. LALO's marketing is positioned heavily towards military and police with aggressive pro-gun slogans. He has also posted on social media with the hashtags #alllivesmatter and #bluelivesmatter, which are controversial in their contrast to the Black Lives Matter Movement.

MEC Members are not happy with the hiring, calling Jay Taylor "a totally wrong fit," among other less kind descriptions. The group Save MEC has raised over $100,000 to fight the sale and has collected thousands of signatures of members in support.

MEC-MENTUM
Kingswood looks to be standing by their man, referring to him as an "accomplished executive in the outdoor industry." With a court hearing this week to close the deal, there's not much upset members can do.
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