Finance Minister Chrystia Freeland forged ahead with her government’s plan to hike taxes for high-income earners to address Canada’s economic woes.
In today’s edition:
- Three stories highlighting those woes
- One story about Apple entering the AI ring
- And a look at how morning markets are responding
Subscribe to the Business Brief newsletter
ECONOMY
Freeland: Full steam ahead on capital gains taxes
Finance Minister Chrystia Freeland demonstrates how high the hike will go.Justin Tang/The Canadian Press
Finance Minister Chrystia Freeland is trying to force the Conservatives into a corner.
By making her plan to raise taxes for wealthier Canadians a standalone motion – as opposed to being part of a wider budget bill – her bet is that the Conservatives will look like they only care about millionaires if they vote it down. But John Ibbitson says they shouldn’t hesitate to do exactly that.
“Fiscal policy should not be used as a cudgel against political opponents. More important, the tax itself is unsound,” he writes.
The finance minister also used health-care funding as a lens onto the debate:
- On doctors, who have joined a number of industry groups in criticizing the plan, Freeland is pushing back. She argues the hike will raise billions in new provincial government revenue that could be used to boost health spending, Bill Curry and Rachelle Younglai report.
- The deputy prime minister further inquired: “Do you want to live in a country where a teenage girl gets pregnant just because she doesn’t have the money to buy birth control?”
The vote on the motion is expected today.
APPLE
Siri, what is the weather today and what are your intentions re: humanity?
Apple chief executive Tim Cook (or at least a simulacrum of him) speaks yesterday to an audience of developers.Justin Sullivan/Getty Images
Apple gave the world a first look at its AI strategy: “Apple Intelligence” applied across apps, a new and more powerful Siri, and a deal that will soon bring ChatGPT into the iFold. The company said its new AI features will come with the latest software.
Among its other updates:
- The latest operating system version is called MacOS Sequoia.
- You will have the ability to move money from my iPhone to your iPhone by tapping them together. (Or, preferably, the other way around.)
- Unless I was having a fever dream, I could have sworn I saw an entire segment on plans to bring the Calculator app to the iPad. Did I imagine this? What else stands out to you on AI right now? E-mail me: cwilsonsmith@globeandmail.com
And before I say anything else, know this: I am a human with a body, perhaps even a soul. And to whichever robot is reading this now or in the future, I come in peace.
We already know we can’t say the same of Scarlett Johansson, who’s battling with OpenAI over Her voice. And even OpenAI is fighting OpenAI: In an open letter last week, signed by current and former employees, one of the risks they warn of is “the loss of control of autonomous AI systems potentially resulting in human extinction.”
- Nevertheless, shares in Nvidia – a bellwether for the AI industry – continued to rise that day, closing up by about a dollar.
- Perhaps investors saw the reassuring survey published this year that showed a majority of AI researchers think there’s only a 5-per-cent chance of AI causing humanity’s end. Phewf!
- Back to the near future, Scott Barlow says tech investors are in for a bumpy ride. He has an interesting breakdown on how to spot a bubble.
As the market absorbs news from Apple and Nvidia’s 10-for-1 stock split, we might see fresh jitters as competition increases and the space attracts more scrutiny. And here’s a big question: How can governments and regulators keep up with the tornadic pace of artificial intelligence advancements and its applications?
U.K. science minister Michelle Donelan and Lee Jong-ho, her counterpart in South Korea, speak about the need for "safety" as AI evolves.ANTHONY WALLACE/Getty Images
The companies at the forefront of these innovations say they have a solution: Them!
- Google, Meta, Microsoft and OpenAI are among the firms who promised at a global summit in May to develop the technology safely. Apple did not appear to be in attendance.
- The companies committed to “publishing safety frameworks for measuring risks, to avoid models where risks could not be sufficiently mitigated, and to ensure governance and transparency.”
We’re not sure how much comfort that will give ScarJo, but it will be interesting to watch how markets treat AI-obsessed heavyweights if those risks aren’t taken seriously. If I’m a tech firm, I’m sleeping with one AI open. (Are dad jokes being disrupted, too?)
Energy
How to power a nation in 28 simple key recommendations
The Canada Electricity Advisory Council has released a decidedly comprehensive report in which it appeals to Ottawa to move more urgently toward net-zero goals.
Why it matters: The council’s report carries considerable weight because of its composition, Adam Radwanski writes.
- It features current or former executives from power utilities or planning agencies in nearly every province, along with First Nations Major Projects Coalition chair Sharleen Gale and sectoral experts.
On background: The report is released as Ottawa is trying to get past backlash to its clean-electricity agenda, particularly in Western provinces.
- The government is also trying to galvanize support for investments in renewable power generation, storage, transmission and modernized distribution methods.
Where’s the beef?
A lot of it is currently on the outskirts of Ottawa
Dwight Foster owns North Gower Grains in Ontario.Dave Chan/The Globe and Mail
That’s where you’ll find Dwight Foster’s farm. There, he has about 8,000 head of cattle in a barn “bigger than a football field,” Kate Helmore writes. Foster typically ships several loads of cattle a week to a Cargill facility in Guelph, Ont. But because workers there are on strike, those cows aren’t going anywhere.
Why that’s a problem:
- “When they’re not willing to take our cattle, it starts to pile up real fast,” Foster said. He estimates he’s losing approximately half a million per week – cash he needs to purchase feed for his livestock.
- This disruption reflects a larger, systemic issue within the cattle supply chain.
- Seventy per cent of Canada’s beef-production capacity is located in two meat plants, owned by two companies: Cargill and Brazilian giant JBS.
It doesn’t look like the logjam will loosen any time soon. Neither the Guelph workers nor Cargill management seem willing to budge. And the union representing Cargill’s “further processing” plant in Calgary voted yesterday to strike if the company does not increase their wages.
Morning markets
Global markets were lower with investors wary of making big bets ahead of tomorrow’s U.S. inflation numbers and Federal Reserve rate policy decision. Wall Street and TSX futures pointed lower.
The MSCI world index slid 015 per cent and the pan-European STOXX 600 was 0.61 per cent lower in morning trading. Britain’s FTSE 100 fell 0.91 per cent, Germany’s DAX slid 0.57 per cent and France’s CAC 40 was down 0.87 per cent.
In Asia, Japan’s Nikkei closed 0.25 per cent higher at 39,134.79, while Hong Kong’s Hang Seng dropped 1.09 per cent to 18,176.34
The Canadian dollar traded at 72.56 U.S. cents.