By Dean Brown.

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Good morning,

Apparently, if Donald Trump’s Republicans have a bad night in the U.S. midterms next week, Canada could end up getting some of the blame.

Honestly, who didn’t see this coming?

CTV reported that U.S. Ambassador Pete Hoekstra told a closed-door business meeting that Canada could be blamed if Republicans lose key races, including Michigan and Maine.

The U.S. Embassy disputes that account and says his comments were taken out of context.

Hoekstra has repeatedly warned Canada about alleged political interference, while the embassy says Americans will ultimately decide their own elections based on domestic issues. Read more about the dispute

And that is where this gets interesting.

WATCH MY BREAKDOWN OF THE U.S. INTERFERENCE STORY →

The U.S. Embassy has accused Canadian politicians of trying to influence the midterms through things like anti-tariff advertising and public pressure on American lawmakers.

Mark Carney rejected those allegations as having “no merit,” while Canadian diplomats have been told to stay away from U.S. candidates during the final stretch of the campaign. See the reporting on Canada’s response

The important distinction is:

A Canadian minister saying:

“Your tariffs hurt Canada, and we want them removed.”

is very different from:

“Vote for this candidate.”

That does not mean countries should casually involve themselves in each other’s elections.

It means the standard should be consistent.

And that is why some Canadians are finding the accusation a little rich.

Elon Musk has publicly commented that Quebec, Alberta and Saskatchewan would be better off separating from Canada.

Trump has also publicly celebrated provincial political results in Canada. See the AP report on U.S. political commentary about Canada

Political commentary by itself does not prove an election-interference operation in either direction.

That is the standard I would use.

Canada and the European Union are meeting in Montreal this week, and the relationship being discussed goes much deeper than another trade agreement.

The two sides are working toward an Alliance for the Future covering economic security, critical minerals, AI, digital infrastructure, defence, research and mobility. See the Canada-EU summit agenda

You may have seen headlines about Canada becoming an EU “associate member.”

That wording was dropped from the draft declaration after objections because the status had no clear legal definition.

The current language is closer to an ever closer association.

Canada is not joining the EU.

But the relationship is getting deeper. See Reuters’ reporting on the draft declaration

Europe is already Canada’s second-largest trading partner, with roughly $178 billion in goods and services trade in 2025.

Canada is also the only non-European country participating in the EU’s €150-billion SAFE defence-procurement program.

So the goal is not:

That is unrealistic.

The goal is:

More customers.

More defence opportunities.

More technology partnerships.

More places to sell Canadian resources and manufactured goods.

That is a much more practical definition of diversification.

The Bank of Canada raised its policy rate Wednesday from:

It was the first increase since July 2023. Read the Bank’s decision

If you saw my video, you already know why I think some of the reaction online got ahead of itself.

Some Canadians absolutely will pay more.

But the Bank did not raise rates because every measure of inflation is suddenly out of control again.

Headline inflation was 3.1% in September.

But inflation excluding gasoline was only 2.2%, while CPI-trim and CPI-median were 1.8% and 1.9%. See the Bank’s latest inflation breakdown

The Bank is worried about what happens next.

Energy costs are already feeding into transportation and business expenses.

The Bank expects more companies to pass those costs onto customers, and it now expects inflation to average roughly 3% in 2027, about a full percentage point higher than it projected in July. See the Bank’s updated outlook

That is why it acted.

Higher interest rates cannot produce more oil.

They can’t.

The Bank is trying to stop an energy shock from spreading into everything else.

If you have an existing fixed-rate mortgage:

Your contracted rate stays the same.

If you have a variable-rate mortgage, HELOC or prime-linked line of credit:

A quarter-point increase on a $100,000 interest-only balance works out to roughly $21 more per month, assuming your rate rises by the full quarter point.

But it is not everybody’s mortgage suddenly exploding overnight.

The Bank also said there could be a need for another increase.

That is not the same thing as saying another hike is guaranteed.

The next decision is December 9. See the Bank’s latest rate statement

WATCH MY BREAKDOWN OF WHY THE BANK RAISED RATES →

This headline sounds like Ottawa just handed a tech company $1.6 billion.

That is not quite what happened.

The federal government announced an investment of up to:

one of Canada’s largest AI companies.

But this is an equity investment.

Canada is buying an ownership stake.

That is very different from a conventional grant.

If Cohere becomes more valuable, taxpayers could benefit.

If the company struggles or fails, taxpayers can lose money.

Cohere is raising a funding round targeting $7 billion CAD at a proposed valuation of about $35.7 billion, although Ottawa’s eventual ownership stake has not been disclosed.

The bigger reason Ottawa says this matters is sovereignty.

Cohere specializes in AI systems for governments, enterprises and regulated businesses where control over data and infrastructure matters.

That fits directly into the same strategy we are seeing with Europe, defence and critical minerals:

Whether government should act like a venture-capital investor in private AI companies is a legitimate debate.

But this is not simply a $1.6-billion corporate cheque.

That distinction matters.

The Competition Tribunal ordered Rogers to pay $15 million over advertising for its Infinite wireless plans.

The issue was not that customers were completely cut off.

The dispute was whether calling the plans “unlimited” created a misleading impression when speeds could be significantly reduced after customers used a set amount of high-speed data.

The full reasons have not been released yet, so I would wait before drawing bigger conclusions about what telecom companies will or won’t be allowed to call unlimited.

But this could matter well beyond Rogers.

See what the Competition Bureau says happened →

Cleveland-Cliffs currently has 175 workers laid off at Stelco’s Hamilton operations.

Ottawa says those layoffs violate legally binding employment commitments made when the company bought Stelco in 2024.

The company disagrees.

It says the commitment was based on annual average employment, not a promise that temporary layoffs could never happen.

That distinction may end up being the heart of the legal fight.

What makes this even more interesting is another reported commitment.

Cleveland-Cliffs had agreed to advocate for policies beneficial to Canadian and American steel producers.

Its CEO later publicly supported higher U.S. tariffs on Canadian steel.

If this goes to court, we may finally learn how much those foreign-investment promises are actually worth once business conditions change.

The federal budget lands November 5.

Its title is:

That tells you quite a bit about where Ottawa wants the argument to go.

Economic sovereignty.

Industrial independence.

Trade diversification.

Major projects.

Investment.

The harder question is what all of that costs.

The Parliamentary Budget Officer has recently downgraded Canadian growth while federal borrowing and debt are rising.

So the budget tension is going to be:

That is what I’ll be looking for next Thursday.

There is a thread running through almost everything this week.

Washington is accusing Canadians of getting too involved in American politics.

Canada is trying to build a deeper relationship with Europe.

Ottawa is buying into a Canadian AI company.

The Bank of Canada is responding to global energy shocks.

And next week’s budget is literally being framed around the idea of Canada controlling more of its economic future.

That does not mean Canada is suddenly becoming independent from the United States.

We are nowhere close to that.

But the political argument has changed.

For years, the question was mostly:

Now it is increasingly:

That is a much bigger project.

Until Monday,

Dean

P.S. My videos on the U.S. interference fight and the Bank of Canada hike both took off this week. If you missed them, start with the interference one. I think that story is going to get louder before Tuesday’s midterms.