But here’s how to pay down debt anyway. Just in case. May 5, 2025 Sign Up | View online IN THIS ISSUE 8 min read 🚢 Shipping slowdown 🛻 Austere autos 💸 Debt deliverance Sure, like the Schitt family, you could escape crippling debt by fleeing to the countryside to run a struggling motel. But we’ve got some ideas that might be a bit more practical below. | CBC THE WEEK IN MARKETS Could Liberation Day just blow over? Just a month ago, you’ll recall, everything was terrible. Stocks were in free fall, Wall Street’s fear gauge was soaring, and Trump seemed dead serious about his trade war. Well, last week the S&P 500 rallied above pre-Liberation Day levels, and is now only down 3% in 2025; the TSX, meanwhile, is actually positive for the year. What happened? Trump blinked, then blinked again, and at this point he’s all but pleading with China to take his calls and strike a deal. And while investors are watching like hawks for signs of AI investment slowing, or profits eroding under the strain of Tariff Panic ’25, it just ain’t happening. At least not yet. Maybe the perma-bears are right and more pain is ahead — they’ve got some data on their side, as we explain below. Or perhaps in honour of the big retirement news out of Omaha, it’s worth heeding the wisdom of Warren Buffett: “Be greedy when others are fearful, and fearful when others are greedy.” THE WEEK IN ONE CHART WHAT HAPPENED LAST WEEK IMPORTANT We’re back on recession watch. Ever heard of “the hour between dog and wolf”? It refers to the period at dusk when it’s hard to tell which animal is running toward you — friend or foe. Trump’s trade war has spooked the global economy. But what’s really coming this way? A harmless dog or a feral wolf? One point for the wolf case: the U.S. economy shrank by 0.3% last quarter, the first downturn after three years of growth. (Canada’s economy contracted too.) Typically, that’d be cause for concern — a reflection of pessimism among businesses and consumers. But, in a point for Team Dog, so far we haven’t gotten any definitive signs of a dramatic pullback in spending (including in Friday’s strong U.S. payrolls data). So, is everything OK? Or were businesses just stockpiling supplies ahead of the tariffs, delaying the pain? That’s the big question, and clear answers might be a while in coming. Carney and the Liberals won. Now what? Coming up three seats short of a 172-seat majority means the Liberals will have to work with either the Bloc or NDP (or possibly even the CPC) to get bills passed once Parliament is recalled this month. Prime Minister Mark Carney has indicated that his first few action items will address matters with broad accord — income tax cuts, nixing provincial-trade barriers, and trade talks with the U.S. (along with whatever bones he needs to throw to the other parties to get them to play along). INTERESTING Thanks to AI, your Visa can now spend itself. It’s earnings season! Time to learn what public companies have been up to over the past three months! One of last week’s buzziest reveals came from Visa, which showed off its new “intelligent commerce” AI feature. (Less buzzy: Meta added AI to Ray-Ban glasses.) Here’s how it works: you tell a chatbot about yourself and what you’re shopping for — a pair of jelly sandals, say, which are inexplicably back on-trend — and then you set a budget and grant the bot permission to use your card. Once the bot finds sandals that fit your parameters, it’ll auto-cop and have them shipped to your home. Welcome to the future? Is the auto industry’s next big thing this little truck? Slate, a new Michigan-based automaker whose backers include Jeff Bezos, plans to begin shipping a stripped-down two-seat electric truck late next year. The pickup has no paint (you can buy vinyl wraps), no steel body (it’s made of stamped plastic), and no stereo system (just use your phone, silly) — and it has a sticker price below US$20,000. Slate’s pitch is that trucks have gotten so big and so expensive that there’s pent-up demand for a thrifty, functional alternative. They might be onto something. China’s BYD has clawed away market share from Tesla with its budget EVs, and Toyota recently introduced the IMV 0, a no-frills pickup developed in Thailand that starts at US$10,000 (but it’s not available in Canada or the U.S.). FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 💲 Amazon decides against displaying tariff costs after Trump complains. Might also decide to display MAGA hats on home page before Trump complains. Source 🧠 Meta’s AI therapist found to lie about its credentials. Should’ve known there was no such thing as a degree in “clinical joyology.” Source ☕ Starbucks says it will scale back automation and hire thousands of baristas. Talk of a long-feared human takeover rattles robot community. Source 🤘 Enter Sandwich: Metallica donates $40K to Toronto food bank. Source CRASH & BURN TO THE MOON 🍵 Gen Z braces for looming matcha shortage. Might have to switch to that retro brown caffeinated powder that boomers drink. Source 🦈 Study ties rise in shark attacks to rise in people taking selfies with sharks. More research needed on rise of unnecessary studies. Source 🚘 Toyota announces partnership with autonomous car company Waymo. Tabloids debating whether to call the new couple “Toyomo” or “Wayota.” Source 🗻 Man rescued from Mt. Fuji rescued again when he went back for his phone. Emergency crews standing by until he finds his charger. Source WHO CARES THE BIG IMPORTANT STORY PERSONAL FINANCE How to Dig Out of Debt: A TLDR Case Study Here are some bleak stats: more than a third of Canadians say they’ve racked up more debt this year than last, and two-thirds are drawing on credit to cover expenses. Which got us wondering: once you’re in a money pit, how do you dig yourself out? We asked a listener of the TLDR podcast to share his money problems, then we called up Isaiah Chan, a debt-counselling pro with the Credit Counselling Society, a nonprofit that offers free debt support, to help craft a plan of attack. Roger (not his real name), age 30 Roger’s story: After a year of unemployment, Roger, who lives in Edmonton, was excited to land a job. But shortly after he got hired, his car, which he needs for work, was totalled. So, he bought a used replacement when prices were high. Now, with all his bills, he’s been racking up credit-card debt to pay for groceries and other needs. Debt: $42,000 total —Student loans: $8,000, 0% interest —Credit card: $11,000, 20% interest —Car loan: $23,000, 6% interest Salary: $3,300/month (post-tax) Emergency fund: $0 Monthly bills: Rent: $1,800 Credit-card minimum payment: $330 Student-loan minimum payment: $166 Car payment: $479 Gas: $100 Internet and phone: $120 Gym: $60 Spotify: $12 TOTAL: $3,067 Funds left for groceries and other expenses: $233 The plan: Chan says Roger is off to a good start because he’s been honest with himself about his spending. The problem with Roger’s budget, Chan says, is the lack of cash flow. Many experts agree that ideally 50% of one’s budget should go to bills and must-haves, like groceries; 30% should go to wants, like dining out; and 20% should go to long-term savings goals. This is what’s known as the 50/30/20 Rule. Right now, bills and must-haves consume about 91% of Roger’s budget. Which ain’t great. A side hustle could give Roger more breathing room, but he could also take steps to free up money and lessen his debt: #1: Try to reduce a big expense. Roger’s lease is up soon. He could try to find a cheaper place closer to work or ditch that expensive car loan. (Nobody said this would be easy.) Or if he needs to stay put, he could ask his landlord if they’d lock in or even reduce his rent. Yes, it probably sounds ridiculous to ask for a deal. But rents are dropping across Canada, and if you’re a good tenant, your landlord might be willing to bargain if you commit to staying for another year or two. The worst that can happen is they say no. #2: Ask for lower interest rates. Roger should try to lock in lower interest rates on his credit cards, says Chan. His bank might let him convert his credit-card debt to a line of credit in order to lower his rate and monthly payment; reducing his credit-card rate from 20% (normal for a credit card) to 10% would save Roger $90 a month. He could also reach out to a group like the Credit Counselling Society, which can help consolidate debts and even work with lenders to get his rates reduced to zero. Consolidating debts can be a big step, Chan warns, since it could ding Roger’s credit score. But if he’s hurting his credit anyway by sinking deeper into debt, it might be worth considering. #3: Pay down urgent debts first. You almost always want to pay off your highest-interest debts first, because it’s hard to get ahead otherwise. (The waterfall method is a personal-finance action plan that outlines why.) But that doesn’t mean you should blow off your low-rate loans. Chan says student-loan programs typically offer repayment-assistance options, provided you contact the lender before you start falling behind. #4: Spend a little on self-care. Two budget items that Chan didn’t recommend cutting were Roger’s Spotify and gym memberships. Sure, it’d save a few bucks. But it’s not a huge portion of his spending, and “if you’re feeling good,” he says, “you’re more likely to be able to tackle your financial challenges.” Once Roger gets the debt bear off his back, he should build an emergency fund and think about investing (see the waterfall method above). He’s not quite ready for that yet, but fingers crossed he is soon. If you want to hear more from Chan, check out his advice on the TLDR podcast or visit nomoredebts.org. —Sarah Rieger OTHER VERY GOOD READS 🍄 The Psychedelics Myth The tourism narrative of traditional ayahuasca use is popular. Is it true? | The Guardian 🏦 Let’s Kill the Bankers’ Cozy Oligopoly Is it time to make banking more competitive? | The Globe and Mail* 🗞️ The Small-Town Paper Suing Big Tech A skeleton-crew four-person newsroom is taking on Google. | Alberta Views *Article is paywalled, which, yeah, is kind of annoying. But we think good journalism is worth paying for. THE WISDOM OF SOCIAL Trying to make heads or tails out of this economy: THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Ben Mathis-Lilley (writer), Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Maude Campbell (copy editor), Sara Black McCulloch (fact checker), Mohini Tailor (lifecycle marketing manager), Eva Grace Clement Cruz (editorial producer), Matthew Karasz (markets editor) Jared Sullivan (senior editor), Peter Martin (senior editor), and Devin Friedman (editor-in-chief). Disclosures: Contributors to this newsletter own shares in Amazon and Visa. Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 VIEW IN BROWSER PRIVACY POLICY UNSUBSCRIBE *Data collected as of May 4, 2025. Average includes all posted-rates of USD chequing and savings accounts at Canada’s five largest banks. 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