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The Canadian Take

Good day,

Canada and the United States are back at the table with just days left before another major tariff deadline.

We’re also looking at the real economic cost if CUSMA falls apart, how Toronto’s Ontario Line went from roughly $11 billion to around $30 billion, whether Ontario’s new-home tax rebate is actually working and Manitoba’s first supervised consumption site.

Canada U.S. Trade
Canada and the U.S. are trying to put a deal in front Trump

Canadian Trade Minister Dominic LeBlanc and chief negotiator Janice Charette are back in Washington as Canada faces new 50 per cent tariffs on roughly $20 billion worth of exports beginning August 19.

The biggest development is that Canadian and American officials are now working on a framework that could be presented directly to Trump before the deadline.

Canada wants more than a temporary delay.

Ottawa says negotiations include the new tariffs, existing steel and aluminum duties, autos and the broader future of CUSMA. Global Affairs says talks have intensified around creating a more predictable trading relationship.

The difficult part is what Canada may have to give up.

Reuters reports that discussions have included Canadian tariffs on some U.S. vehicles, dairy quota administration and possibly getting American alcohol back into provincial liquor stores.

None of those concessions has been finalized.

The alcohol issue is especially complicated because Ottawa does not actually control most provincial liquor stores. Even if Carney agreed to something, provinces would still have to cooperate.

And Canadians may not buy much U.S. alcohol anyway.

The bigger reason Canada wants a deal is CUSMA.

A new Oxford Economics analysis estimates that a serious breakdown of the trade agreement could mean roughly 102,000 fewer Canadian jobs in 2027, while the U.S. could lose about 214,000.

The same report estimates a successful renegotiation could instead support about 98,000 additional Canadian jobscompared with the current tariff-heavy environment.

Those are models, not guarantees. The report was also commissioned by the Canadian American Business Council, which supports closer trade integration.

Still, the basic point is hard to ignore. Canada can diversify away from the United States, but replacing our largest customer cannot happen quickly.


Transit
Toronto’s $11 billion subway is becoming a $30 billion subway

When Ontario announced the Ontario Line in 2019, the estimated cost was about $10.9 billion.

The latest Metrolinx estimate is now roughly $29 billion, and with another major contract recently awarded, projections suggest the final number could approach $34 billion.

The 15.6-kilometre Ontario Line will have 15 stations and connect with several TTC and GO routes.

At $29 billion, that works out to roughly $1.9 billion per kilometre.

So how did the cost get this high?

Part of the answer is that the original $10.9-billion estimate came extremely early, before final designs, property acquisition, utility relocation and many construction risks had been properly priced.

Construction costs also surged after 2019, especially for steel, concrete, labour and financing.

And building a subway through downtown Toronto is complicated. Crews have to work around existing tunnels, utilities, high-rise foundations and active rail corridors.

But none of that completely removes the accountability question.

The latest CityNews reporting shows the cost has nearly tripled while the expected opening has also moved into the early 2030s.

The project itself could still be worthwhile. Metrolinx expects up to 388,000 daily boardings, and Toronto has needed additional downtown transit capacity for decades.

The issue is whether taxpayers were ever given a realistic price in the first place.

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Housing
Ontario cut the tax on new homes and sales jumped

The federal government received 10,006 applications for its early-retirement program before last week’s deadline.

The program allows approved employees to receive an immediate pension based on their years of service without the usual early-retirement penalty.

Ottawa sent information to roughly 68,000 potentially eligible workers as it tries to reduce the size and cost of the federal public service.

But 10,000 applications do not automatically mean 10,000 government positions will disappear.

Some applications may be rejected. Departments may also replace workers whose jobs are still considered necessary.

The government could save money by eliminating positions after people retire, but it also risks losing experienced employees and slowing services.

There is also a familiar government problem to watch: retired workers leaving payroll and later returning as higher-priced consultants.

Public Health
Manitoba opens first supervised consumption site

Manitoba’s first supervised consumption site is now fully operational in Winnipeg.

The Indigenous-led facility at 366 Henry Avenue allows adults to bring their own drugs and consume them while trained staff are nearby to respond to overdoses and connect people with health care, treatment and social services.

The site does not sell or provide illegal drugs.

The basic harm-reduction argument is straightforward.

Someone consuming fentanyl or another dangerous drug near naloxone and trained staff is less likely to die than someone using alone.

The Manitoba government says the site is also intended to reduce public drug use, discarded needles and blood-borne infections while connecting people with recovery services.

People under 18 are not permitted to use the consumption area. Youth seeking help are supposed to be redirected to other services.

The strongest criticism is what happens around the facility.

Opponents worry about neighbourhood disorder, public drug activity and governments spending money managing addiction instead of expanding detox and treatment.

That is why the real test should be measurable.

Winnipeg should track overdoses reversed, treatment referrals, ambulance calls, neighbourhood complaints, police calls and whether people using the facility actually move into recovery.

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Wildfires
B.C’s wildfire emergency is becoming a rebuilding crisis

The Bald Range wildfire is now mapped at roughly 17,800 hectares, after forcing thousands of people from communities around Summerland and Peachland.

Homes have been destroyed and an 80-year-old woman died while evacuating.

The immediate evacuation emergency has started shifting toward a much longer problem: temporary housing, insurance, rebuilding and restoring damaged communities.

Another 100 firefighters from Mexico have arrived to reinforce B.C. crews.

There is also an interesting scientific effort happening above the fires.

NASA flew an ER-2 high-altitude research aircraft over British Columbia to study fire-generated thunderstorms known as pyrocumulonimbus clouds.

The aircraft is based on the design of the old U-2 reconnaissance plane, which explains some of the “spy plane” headlines.

NASA is not spying on Canada.

Researchers are examining how enormous wildfires can push smoke high into the atmosphere and create their own weather systems, including lightning and extreme fire behaviour.

The aircraft spent hours flying at roughly 60,000 feet over the Interior.

Quick things happening across Canada

  • Canadians are becoming more negative toward Americans themselves: A new poll found 48 per cent of Canadiansnow hold an unfavourable opinion of Americans, not just the U.S. government. That suggests the trade fight may be changing the relationship between the two populations, not only attitudes toward Trump.

  • Canadian astronaut Joshua Kutryk prepares for space: Kutryk is scheduled to join NASA’s SpaceX Crew-13 mission no earlier than September and spend about six months aboard the International Space Station. He will become the first Canadian to fly through NASA’s Commercial Crew Program.

  • Federal department ordered to compensate worker: A labour tribunal found Innovation, Science and Economic Development Canada mishandled a disability accommodation request involving its return-to-office policy. The department was reportedly ordered to pay about $28,000, but the ruling does not create a general right to remote work.

  • Alberta wants fewer political flags in schools: Proposed rules would normally allow schools to display only approved flags, primarily the Canadian and Alberta flags. The policy would affect Pride flags along with other non-approved political or social symbols and is part of a broader Alberta classroom-policy package.

  • NASA is using a former spy-plane design over B.C.: The ER-2 aircraft is collecting data on extreme wildfire clouds at roughly 60,000 feet. Researchers hope to better understand how intense fires generate storms and push smoke high into the atmosphere.

P.S. If Canada had to make one concession to get a broader U.S. trade deal, which would bother you least: American alcohol returning to provincial shelves, changes to auto tariffs or adjustments to dairy rules?

Hit reply and let me know.

If today’s issue helped, share it with another Canadian.

Until Tomorrow,
Dean.

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