Technical difficulties delayed the delivery of your Business Brief this morning. Our apologies.
Good morning. The Globe and Mail’s inaugural Intersect conference brought together business leaders and policymakers to plot Canada’s next steps as a trade war threatens the country’s sovereignty. Below, a look at the risks and rewards for a country on the verge of building big.
In the news
Defence: Prime Minister Mark Carney said Canada is too reliant on the United States for security as he announced a significant boost in military spending to meet NATO’s 2-per-cent military expenditure target this fiscal year, five years ahead of schedule.
Deals: Canadian waste management giant GFL Environmental Ltd. is in talks to sell a stake in its infrastructure arm in a deal that would value the spinoff’s equity at about $3.3-billion.
Finance: The CEO of the Canadian arm of China’s largest bank was fired after pushing to comply with Canadian laws on foreign interference, according to a lawsuit that says his efforts led to clashes with officials in Beijing.
On our radar
- Apple’s annual software developer conference is overshadowed this week by an unprecedented set of technical and regulatory challenges.
- Top U.S. and Chinese officials were meeting to ease a growing trade dispute, which is widening from tariffs to rare-earth restrictions and raising fears of a global supply-chain shock and slower growth.
Michael Sabia speaks at the Intersect 2025 conference yesterday in Toronto.Jenna Muirhead/The Globe and Mail
In focus
Big dreams, big risks
Canada should seize the global clean energy opportunity as the U.S. slows its climate ambitions, Hydro-Québec CEO Michael Sabia says, calling the American retreat a “hallelujah” moment for Canadian leadership.
“If they pause, we go forward,” Sabia said yesterday at The Globe‘s Intersect/25 conference in Toronto. “That’s our moment – and it needs to be seized now.”
Crown-owned utilities such as Hydro-Québec are uniquely positioned to ramp up investment while private markets remain cautious, said Sabia, who also served as CEO of the Caisse de dépôt et placement du Québec for more than a decade.
The utility is aiming to boost its capital spending from $8-billion to $12-billion this year to accelerate grid expansion and electrification, he said.
Global investment in renewables is hitting record highs, with projected energy spending of US$2.2-trillion in 2025 – double the amount forecast for fossil fuels, Sabia said. Despite political headwinds and inflationary pressures in the U.S. and Europe, the “underlying signal” from global boardrooms is that capital is flowing into clean power.
Sabia also called for smarter risk-sharing between governments and their financing agencies, such as the Canada Infrastructure Bank, to unlock large-scale infrastructure investment. Long-term capital won’t fund early-stage, high-risk projects, he said, unless governments step in with “bridge capital” to shoulder the initial uncertainty.
Pushing traditional infrastructure investors to take on startup risk doesn’t work, he said. “It’s like asking a hockey player to go play in the NFL.”
Sabia’s call to accelerate investment is being echoed across the provinces and corporate Canada after Prime Minister Mark Carney unveiled plans to implement a streamlined approval process for major nation-building projects such as trade corridors, energy projects and mines.
The CEO drew applause when he ended a comment about ramping up investment with a rallying cry: “Both for the economy now and for our future: Charge ahead. Go forward.”
Premiers Doug Ford and Tim Houston – whom the Ontario Premier referred to as a “stud” as he praised his Nova Scotian peer’s work on breaking down interprovincial trade barriers – both sparked applause when they said they had no plans to allow U.S. alcohol on their provinces’ shelves.
David MacNaughton, a former Canadian ambassador to the U.S. who took the stage afterward, said watching the two premiers talking about working together represented a once-in-a-generation moment where Canadian politicians are united in “aspirational talk.”
“Trump is forcing Canada to finally get its act together.”
The risky business of ‘optimism bias’
If yesterday was any measure, Canada’s leaders do not appear to be suffering from a lack of hope.
But a new report from KPMG Canada, set to be released this morning, shows that delivering on those goals will require more than enthusiasm. Corporate leaders expressed strong support for accelerating infrastructure — but also pointed to persistent delays, resource constraints and the need for clearer oversight.
Nine in 10 said governments need to unlock public-private capital and streamline review processes to keep pace with rising demand. Most pointed to the need for a national utility corridor and upgrades to ports, which they described as “woefully unproductive.”
And the company’s infrastructure experts warned that Canada is entering a “megaproject era” with limited financial and human resources. Delays and overruns remain common, driven by poor planning, shifting project scopes, regulatory bottlenecks, and what the KPMG report calls “optimism bias” – underestimating the complexity of large-scale builds.
Building in the wrong direction?
And it’s possible a focus on megaprojects misses a deeper reason Canada continues to lag its peers in business investment and productivity, said Dan Breznitz, Munk Chair of Innovation Studies at the University of Toronto. The country lacks a strategy to capture and control the high-value stages of the industries it supports.
“We are a resource-rich country that can play a critical role in global supply chains,” he said. “And instead, what we do is dig things out of the ground, mash them so they don’t look like rock, send them to Norway for processing, and eventually watch them come back here for 15 seconds of work before going into a battery plant that isn’t ready yet.”
Ownership and control, not effort or ambition, are what ultimately determine where economic value lands, Jim Balsillie, former CEO of Research in Motion, said in an earlier presentation. “Canada took a different path by doubling down on low-cost labour without a strategy to own the IP, control the data or capture high-value segments,” he said. “This is more than a productivity gap – it’s a strategic misstep.”
With a file from Mark Rendell
More from Intersect:
- Canada’s innovation policies need an overhaul to boost economy, experts say
- CIBC CEO says Canada needs to be on ‘wartime footing’ to bolster productivity
- Ontario, Nova Scotia premiers say they won’t follow Alberta in buying U.S. alcohol again
Charted
Powering back up?
Once a market darling for its blend of renewables, utilities and rising dividends, Algonquin Power fell hard under the weight of overexpansion, debt and two dividend cuts. But after shedding its green energy assets and rebranding as a “pure-play” utility under new CEO Rod West, the company is staging a comeback, David Berman writes – with a 26-per-cent share rally this year and bold promises of renewed profit growth. Investors are buying in, but with much of the rebound already priced in, the next phase hinges on whether Algonquin can actually deliver.
Bookmarked
On our reading list
Abroad: Investors are eyeing Latin America as they diversify away from Wall Street.
Opinion: “National interest” framework for project approvals must reflect the rights of Indigenous peoples.
Download: The June edition of Report on Business magazine.
Morning update
Global markets were mixed as trade talks between the United States and China extended to a second day, raising some hopes that tensions between the world’s two largest economies may be easing. Wall Street futures were little changed, while TSX futures pointed higher as oil prices climbed.
Overseas, the pan-European STOXX 600 was flat in morning trading. Britain’s FTSE 100 rose 0.52 per cent, Germany’s DAX declined 0.43 per cent and France’s CAC 40 edged down 0.03 per cent.
In Asia, Japan’s Nikkei closed 0.32 per cent higher, while Hong Kong’s Hang Seng slipped 0.07 per cent.
The Canadian dollar traded at 73.05 U.S. cents.