Good evening, let’s start with today’s top stories:
Senior federal bureaucrat and veteran business hand Michael Sabia is set to take the reins at Hydro-Québec.
The move is taking place at a pivotal point for the state-owned hydroelectricity producer, which is grappling with booming demand from industry for its renewable energy just as the province readies a transition away from fossil fuels by increasing electrification to meet climate targets.
Sabia, one of the federal government’s most trusted economic advisers, will exit his post as deputy finance minister to take over as chief executive officer of the power producer, according to two senior government officials.
Finance Canada’s Michael Sabia responds to a question as he testifies at the Public Order Emergency Commission, Nov. 17, 2022 in Ottawa.Adrian Wyld/The Canadian Press
Florida Gov. Ron DeSantis launches 2024 presidential campaign to challenge Trump
Florida Governor Ron DeSantis has launched his long-awaited foray into the 2024 presidential race, but will be making the official announcement in an unusual manner: at an event with billionaire Elon Musk on Twitter.
DeSantis is betting that his brand of non-stop cultural combat will rally the conservative base. During his more than four years in office, he has cracked down on discussion of LGBTQ issues and structural racism in classrooms, made abortion illegal after six weeks, legalized carrying concealed guns without a permit, and wielded the power of government to punish critics – most famously in a fight with Disney.
Since dropping his hat into the ring, however, DeSantis has faced a barrage of attacks from former president Donald Trump and his allies – including an ad this week labelling him “Ron DeSalesTax” over his previous support for such a levy – that have steadily pushed down his polling numbers. The former president’s criminal indictment last month also helped coalesce flagging Republican support around him.
Florida Governor Ron DeSantis speaks to the crowd before a Make America Great Again campaign rally in Tampa, Florida, on Oct. 29, 2020.RICARDO ARDUENGO/AFP/Getty Images
China and Russia strengthen ties with new economic deals
Leaders of the G7 issued a stern condemnation of both China and Russia in Hiroshima this weekend, taking aim at Beijing’s tacit support for Moscow’s invasion of Ukraine. Their words, however, did not appear to have their desired impact, as China and Russia moved to further strengthen their partnership in the face of Western hostility.
Prime Minister Mikhail Mishustin became the highest-ranking Kremlin official to visit China since the war broke out on Wednesday, when he met with his Chinese counterpart Li Qiang and signed a number of new economic deals.
Russian Prime Minister Mikhail Mishustin, left, and Chinese President Xi Jinping shake hands prior to their talks in Beijing, China, May 24, 2023.Alexander Astafyev/The Associated Press
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ALSO ON OUR RADAR
Russia’s Wagner boss says more than 20,000 of his troops died in Bakhmut battle: The head of the Russian private army Wagner has again broken with the Kremlin line on Ukraine, saying its goal of demilitarizing the country has backfired, acknowledging Russian troops have killed civilians and agreeing with Western estimates that he’s lost more than 20,000 men in the battle for Bakhmut.
BMO and Scotiabank earnings disappoint as economic hurdles weigh on growth: Canadian bank earnings season launched with a pair of disappointments, as economic uncertainty and the weight of higher interest rates hit profits at Bank of Nova Scotia and Bank of Montreal.
Proposed bill to give MPs, senators choice not to swear oath to King Charles: A Liberal MP is preparing a bill to scrap the requirement for parliamentarians to pledge loyalty to King Charles, giving them the choice to swear an oath to Canada instead.
How OPSEU president JP Hornick wants to build a “different kind of unionism”: The president of the Ontario Public Service Employees Union aims to root out cronyism and make equity a core tenet in decision-making.
Ring of Fire project at risk due to red tape and cumbersome consultation process, billionaire owner says: Andrew Forrest, the Australian billionaire owner of the most promising mining assets in the Ring of Fire, says the viability of the key critical minerals project is at risk because of Canada’s high regulatory burden, the cumbersome consultation process and persistent delays in building crucial infrastructure.
NEW PODCAST EPISODES
Better For It: How Knix founder Joanna Griffiths built an underwear empire in a room full of naysayers
City Space: Urban wildlife: How humans and animals can better co-exist in cities
MARKET WATCH
Canada’s main stock index was down more than 200 points Wednesday, with financials, metals and industrials leading the decline, while U.S. stock markets also retreated as debates over the country’s debt ceiling remained unresolved.
While much of the blame for the market’s downward trend has been placed on the ongoing debt ceiling talks, there are other factors weighing on stocks, said senior investment adviser at iA Private Wealth Allan Small, including uncertainty about whether the Federal Reserve will pause its interest rate hikes next month.
Meeting minutes from the central bank showed officials were divided earlier this month on whether to pause interest rate hikes at the upcoming meeting in June.
The S&P/TSX composite index was down 218.32 points at 19,927.69.
In New York, the Dow Jones industrial average was down 255.59 points at 32,799.92.The S&P 500 index was down 30.34 points at 4,115.24, while the Nasdaq composite was down 76.08 points at 12,484.16.
In Canada, all eyes were on earnings reports from the big banks, with Bank of Montreal and Scotiabank showing the weight of weakening economic conditions in their results Wednesday.
Both banks reported higher expenses and more money set aside for bad loans, as well as slowing loan growth, leading to a decline in earnings. The fact that bank earnings are slowing isn’t a surprise given the economic conditions, said Small, though the reports so far have fallen short of analysts’ expectations.
He doesn’t expect the trend to reverse any time soon. “We could see a few quarters of numbers in decline.”
In one “bright spot,” tech continues to outperform the markets’ year to date, said Small, as the sector recoups some of its 2022 losses. He thinks some optimism from investors over artificial intelligence is also helping boost tech stocks.
“It’s the NASDAQ and the tech names that are leading the charge,” said Small.
But markets overall appear to be in a lull, he said, as uncertainty about interest rates weighs heavy on investors.
Once markets have a better idea of what’s ahead, Small thinks equities will pull out of their current range and make gains.
“I think we’re going to stay range bound … until the Fed stops raising rates, which hopefully will be next month,” he said.
The Canadian dollar traded for 73.63 cents US compared with 74.05 cents US on Tuesday.
The July crude contract was up US$1.43 at US$74.34 per barrel and the July natural gas contract was up eight cents at US$2.57 per mmBTU.
The June gold contract was down US$9.90 at US$1,964.60 an ounce and the July copper contract was down nine cents at US$3.56 a pound.
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TALKING POINTS
Parliament has spoken: We need an independent public inquiry
“The King’s representative in Canada must remain above partisan politics; that maxim should apply not just to the current resident of Rideau Hall but to past office holders, as well. Mr. Johnston may well believe he has fulfilled that duty, but the fact remains that he is publicly defending the government’s actions and opening himself up to criticism.” – The Editorial Board
If Canada wants a seat on the UN’s Human Rights Council, it needs to step up on its own record
“While Canada has been vocal in condemning atrocities in Ukraine and recognizing the genocides of the Rohingya and Uyghur populations (in Myanmar and China, respectively), critics point out that the country’s human-rights policies are often linked to issues that do not harm its economic or political interests. Canada’s silence on human-rights violations by India, Israel, Egypt and Tunisia, among others, has drawn particular criticism, with even its positioning on Saudi Arabia being called hypocritical owing to its arms sales to the kingdom.” – Taha Ghayyur
The bad news personal finance story of the year so far is the housing market revival
“A housing rebound would feed inflation and help keep interest rates at their current heights for longer than previously thought. People who have paid off all or most of their mortgages would benefit from higher home prices, while younger Canadians with big mortgages and other debts would suffer. Our housing market is built to a large extent on unfairness. Stand by to see how much worse things can get.” – Rob Carrick
LIVING BETTER
Non-sugar sweeteners aren’t effective for weight control and could be harmful long-term, WHO says
Last week, the World Health Organization released a new guideline on non-sugar sweeteners (NSS), warning against their use for weight loss or for preventing unhealthy weight gain.
Based on a comprehensive evidence review, the organization concluded that NSS offered no long-term benefit for reducing body fat in adults and children. What’s more, the findings suggested that consuming these sweeteners over the long-term could have unwanted health effects. Here’s a rundown of the WHO guideline, plus tips for reducing sweeteners in your diet.
TODAY’S LONG READ
Music icon Tina Turner, the Queen of Rock ‘n’ Roll, dies at age 83
Pop Star Tina Turner performs on stage of the Kremlin Palace of Congresses, in Moscow, Russia, Nov. 5, 1996.STRINGER/Reuters
Tina Turner, the American-born singer who left a hardscrabble farming community and abusive relationship to become one of the top recording artists of all time, died on Wednesday at the age of 83.
Turner began her career in the 1950s during the early years of rock and roll and evolved into an MTV phenomenon.
In the video for her chart-topping song “What’s Love Got to Do with It,” in which she called love a “second-hand emotion,” Turner epitomized 1980s style as she strutted through New York City streets with her spiky blond hair, wearing a cropped jean jacket, mini skirt, and stiletto heels.
Evening Update is written by Emerald Bensadoun. If you’d like to receive this newsletter by e-mail every weekday evening, go here to sign up. If you have any feedback, send us a note.