Tausi Insider

Bill Browder was once Russia’s biggest foreign investor, but in 2005 Vladimir Putin declared him a "threat to national security." Christopher Katsarov/Tausi Insider Canada stands with Ukraine, but Ottawa’s inability to fight financial crime is enabling Russia’s war machine. That stark assessment comes from Bill Browder, a man who has risked his life to expose how Russian President Vladimir Putin has enriched himself through corruption, money laundering and flagrant violations of human rights. The U.S.-born British citizen, who co-founded hedge fund Hermitage Capital Management, was once Russia’s biggest foreign investor. But these days, he’s considered an enemy of the Russian state. Not familiar with his story? Let me catch you up so it’s clear why the Canadian government must heed his call. Mr. Browder made his fortune in Moscow during the 1990s and the early aughts by investing in newly privatized Russian companies. But his time in the “Wild East” came to an end in 2005 w...

The economic update that was meant to shed light on how Canada will compete with new clean-spending measures in the United States and elsewhere has instead sowed confusion about one of the key elements of that strategy. Last spring, the federal government announced that it was exploring carbon contracts for differences (CCFDs). As presented then, the mechanism would guarantee companies making clean-technology investments of financial benefits from planned carbon-price increases, even if the price did not actually go up to $170 per tonne by 2030 as planned. Since August, when Washington committed US$370-billion to climate-related measures via the Inflation Reduction Act, Ottawa has faced increased pressure to follow through. Prime Minister Justin Trudeau has suggested that Canada’s national carbon price means it doesn’t need to match subsidies in the U.S. But Canadian industries have complained that political uncertainty around the market-based mechanism – including whether it will be...

Parliamentary Budget Officer Yves Giroux's office decided to crunch the numbers to estimate what would happen if the Bank of Canada overstepped with its rate increases. Dave Chan/Tausi Insider After six interest rate increases totalling 3.5 percentage points – and with the promise of still more to come – there’s a growing urgency to the questions the Bank of Canada faces about its aggressive pursuit to snuff out inflation. How high is the central bank willing to go? How far is too far? And how much economic collateral damage might the bank inflict if its policy tips into overzealousness? With the question becoming an increasing preoccupation of Ottawa policy makers and a broad swath of the Canadian public, the Office of the Parliamentary Budget Officer decided to crunch the numbers to estimate what would happen if the Bank of Canada overstepped with its rate increases. Predictably, it’s not good. Arguably, it might be tolerable. But surprisingly, it might not make much difference...

A closed business in downtown Vancouver, on April 19, 2020. DARRYL DYCK/The Canadian Press Ottawa’s contentious use of Canadians’ mobility data early in the COVID-19 pandemic should serve as a warning the government needs to strengthen its proposed new private-sector privacy law, the Toronto internet-security and human-rights organization Citizen Lab says. The report adds to broad criticism from the privacy community of the Consumer Privacy Protection Act, which was introduced as part of Bill C-27 in June. A Citizen Lab report released Tuesday argues the federal government’s use of location data from Telus Corp. and BlueDot Inc. – which allowed Ottawa to track the movement of millions of devices to understand population movements in the era of rolling COVID-19 lockdowns – could create a slippery slope in which such data could restrict human rights. Even though that data about people’s movements had been stripped of identifying information, or “de-identified,” some data sets can be me...

Bank of Canada senior deputy governor Carolyn Rogers takes part in a news conference in Ottawa, on Oct. 26. PATRICK DOYLE/Reuters Recent homebuyers with variable-rate mortgages will find the adjustment to higher interest rates more painful, said Bank of Canada senior deputy governor Carolyn Rogers. Speaking before the networking group Young Canadians in Finance in Ottawa Tuesday, the senior deputy governor said the share of households with a variable-rate mortgage has increased over the last year. These mortgage holders are especially affected by interest rate hikes. “Mortgage costs for some Canadians have already increased, and they will likely increase for others in time,” Rogers said, according to her prepared remarks. Housing activity boomed during the pandemic as Canadians rushed to take advantage of low interest rates. Now, as interest rates climb back up, recent homebuyers with variable-rate mortgages are seeing their borrowing costs go up. New research from the Bank of Canada...

Homes on Sherman Brock Circle in Newmarket, Ont. on Mar 30, 2021. Fred Lum/the Globe and Mail Canada’s financial system should be able to weather a period of heightened stress, but many recent home buyers could experience a “painful” squeeze as interest rates continue to rise, the Bank of Canada’s second-in-command said Tuesday. In a speech in Ottawa, senior deputy governor Carolyn Rogers said long-standing vulnerabilities in Canada’s housing market worsened through the COVID-19 pandemic as home prices soared and buyers increasingly relied on variable-rate mortgages, which are linked to the central bank’s benchmark lending rate. Now that interest rates are rising and home prices are falling, many of these home buyers are experiencing a nasty adjustment, Ms. Rogers said. The most common variable-rate product has fixed monthly payments. With every interest rate hike, more of the borrower’s monthly payment goes toward interest. However, when the monthly payment no longer covers any prin...

Former Bank of Canada governor Stephen Poloz delivers a keynote address to a business conference in Ottawa, on Nov. 24. Adrian Wyld/The Canadian Press Former Bank of Canada governor Stephen Poloz says the effect of interest rate hikes will be larger than people anticipate. Speaking at a conference in Ottawa hosted by Western University’s Ivey Business School, the former governor warns today’s economy is more sensitive to interest rates than it was 10 years ago. Poloz estimates annual inflation will fall to about four per cent on its own as external factors, such as higher commodity prices, ease. He says policy action will need to do the rest of the work to get inflation back down to the central bank’s two per cent target. Poloz is defending the use of the word “transitory” to describe inflation pressures, noting that international contributors to inflation are already dissipating. However, the former central bank governor says it takes time for that development to be reflected in the...

Former Bank of Canada governor Stephen Poloz delivers a keynote address to a business conference in Ottawa, on Nov. 24. Adrian Wyld/The Canadian Press Former Bank of Canada governor Stephen Poloz says the effect of interest rate hikes will be larger than people anticipate. Speaking at a conference in Ottawa hosted by Western University’s Ivey Business School, the former governor warns today’s economy is more sensitive to interest rates than it was 10 years ago. Poloz estimates annual inflation will fall to about four per cent on its own as external factors, such as higher commodity prices, ease. He says policy action will need to do the rest of the work to get inflation back down to the central bank’s two per cent target. Poloz is defending the use of the word “transitory” to describe inflation pressures, noting that international contributors to inflation are already dissipating. However, the former central bank governor says it takes time for that development to be reflected in the...

Ian Scott, Chair and CEO of the Canadian Radio-television and Telecommunications Commission, during his keynote speech at the 2019 Canadian Telecom Summit, on June 2, 2019. Fred Lum/Tausi Insider Ian Scott says he never really considers the legacy he will leave after departing as leader of Canada’s telecom regulator. Soon, the industry will do it for him. Mr. Scott is almost certainly entering the final weeks of his five-year term as the chairman of the Canadian Radio-television and Telecommunications Commission – the chief watchdog for the broadcasting and telecom industries. According to the commission, Mr. Scott’s term will end Jan. 4, 2023, but a new chair has yet to be announced. His initial term was already extended four months. As with each chair before him, Mr. Scott was faced with numerous competing demands: calls for greater competition; investment in physical networks; and support for smaller and regional telecoms fighting the industry incumbents for market share. All this...

Minister of Foreign Affairs Melanie Joly and Minister of Public Safety Marco Mendocino announce Canada's Indo-Pacific strategy in Vancouver on Nov. 27. DARRYL DYCK/The Canadian Press Shawn Barber is a former foreign service officer and Canadian ambassador. Until June of this year he was the head of the economic security task force for Public Safety Canada. He lives in Washington. Canada’s new Indo-Pacific Strategy offers an opportunity for the federal government to take the urgent action required to respond to the threats China poses to our economic security, particularly our innovative technology sector. But while it is a good start, it’s not enough. Canada’s strategy needs to go much further. Failure to act now could not only have dire consequences for our national security but also erode our long-term economic competitiveness. As Canadian Security Intelligence Service director David Vigneault said in 2021 about Chinese industrial espionage: “It is our country’s future that is ...

The Competition Tribunal hearing into the proposed $26-billion merger of Rogers Communications Inc. RCI-B-T and Shaw Communications Inc. SJR-A-X has shifted to the potential cost savings that would be generated by combining Canada’s two largest cable companies. Cost savings, or efficiencies, are a critical issue because Canadian competition law allows a merger to close if it results in lower total costs for the combined business – even if the merger lessens competition. The provision in question is called the efficiencies defence and is contained within section 96 of the Competition Act. Rogers and Shaw are not publicly disclosing the dollar value of the efficiencies that they expect their merger to generate, although several witnesses have testified on behalf of the companies with regards to these calculations. That testimony has occurred largely out of the public eye, during confidential sessions, and documents relating to the expert testimony are heavily redacted. Shaw Communicati...

Canada’s impending ban on foreigners purchasing residential real estate is complicating how businesses hire, promote and transfer immigrant workers because of an information vacuum about the final rules. The Prohibition on the Purchase of Residential Property by Non-Canadians Act, passed by Parliament earlier this year, will restrict foreigners from buying homes in Canada starting next month. That ban will remain in place for two years – supposedly to curb investor speculation in the housing market. Although the legislation will come into force on Jan. 1, 2023, the federal government still hasn’t released the final regulations outlining how the prohibition will work. Those details are essential because they will specify which non-Canadians, both individuals and corporations, will be exempt from the ban. Our legislators, however, seem unaware that 2023 is less than 30 days away. But you can be damn sure the businesses and foreign workers who have to comply with the law are acutely awa...