Plus: why Rogers paid $11B for hockey. April 7, 2025 Sign Up | View online IN THIS ISSUE 8 min read 🌪️ Tumultuous tariffs 🏒 Sports spending 🇨🇦 Canada changes This week, we’re travelling way back in time, to the dimly remembered year of 2015. Jump into the DeLorean in the Big Important Story. | Amblin Entertainment THE WEEK IN MARKETS So that happened. Late last week, U.S. stocks suffered their 11th-biggest two-day drop in modern market history — in select company with the 1929 Great Depression, Black Monday in 1987, the 2000 dot-com bubble, and the 2020 COVID-19 global shutdown. The S&P 500 closed the week down a grisly 11%, a slide that vaporized US$6 trillion in value. The TSX, for its part, dropped 10%, and the VIX, Wall Street’s so-called fear gauge, spiked to 45, a number surpassed only by COVID and the 2008 financial crisis. (On Sunday night, stock futures opened lower, setting the stage for more pain on Monday.) There’s no sugarcoating data like this, and no disputing what triggered the rout: Donald Trump’s draconian global tariffs, which target everyone from longstanding U.S. allies to south Pacific penguins to uninhabited islands. (Canada got something of a break; see below.) The States’ effective tariff rate now stands at around 25%, up from 5% — the highest level in a century. The question looming over all of us is whether something fundamental has changed — a reshuffling of long-standing trade partnerships, an end to the stock market’s seemingly endless ability to bounce back, a precursor to a global recession — or if this is just another temporary Trump-induced convulsion. The great hope is that he’ll back down like he usually does, and market stability will soon be restored. The trouble is companies have to make business decisions now, which is why tariffs are so disruptive. Will trade costs remain high for the foreseeable future? Do you cut payroll? Pass on those expenses to your consumers? Consult a crystal ball? All the giant market calamities of the past were generally short-lived. Maybe this one will be too (and history suggests not to panic). But Trump keeps trying to steer the global economy like it’s a pinpoint Tesla Model S, when in reality it’s more like a Cybertruck — push it too far and it might burst into flames. THE WEEK IN ONE CHART FWIW we ran this poll before last week’s sell-off, but still… WHAT HAPPENED LAST WEEK IMPORTANT Canada celebrates Liberation Day with a counterpunch. Trump spared Canada from the latest round of market-rattling tariffs, but that didn’t stop Prime Minister Mark Carney from firing a limited counterstrike anyway — up to 25% tariffs on U.S. vehicles not covered by CUSMA. Carney is trying to soften the blow for Canadian consumers and automakers, but fighting a trade war is hard when one side appears to be using GenAI to pick its targets. Wait, is that a joke? Nope! The jury is still out, but there’s mounting evidence that the White House did indeed use an AI tool like Grok, ChatGPT, Gemini, or Claude to arrive at its widely panned tariff math. That helps to explain why, as we alluded to up top, not even penguins were spared. INTERESTING Rogers paid $11B so you can watch the Leafs lose. The telecom behemoth has re-upped with the NHL in a 12-year, $11 billion TV deal, which is a giant sum for hockey broadcasting rights — double the previous deal. Why’d Rogers pay so much? Cord cutters. In order to hang on to TV subscribers, Rogers is packing its flagship sports channel, Sportsnet, with premium content, and the new hockey deal includes playoff games and the Stanley Cup Finals. Rogers just bought the Maple Leafs and a controlling share of the Raptors, and it already owned the Blue Jays, so the NHL deal means it’ll always be able to broadcast at least one of its teams. One can’t help but wonder if the company is willing to spend $11 billion on hockey, why is it being so stubborn about paying slugger Vladimir Guerrero, Jr., US$500 million to make the Jays watchable for the next decade? Disaster capitalism is booming. Drop sellers on Amazon are trying to cash in on U.S.-Canada trade tension by playing both sides of the geopolitical imbroglio, simultaneously selling “51st State” and “Canada Is Not For Sale” merch. Canadians are predictably testy about it — 68,000 people have signed a petition demanding that Amazon take action, and nothing snaps Amazon to attention like a Canadian petition... —Brennan Doherty FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 🚬 Philip Morris stock (briefly) reaches all-time high. Smoking while pacing and pulling out your hair expected to be big this year. Source 🏭 Automaker Stellantis temporarily shuts down Canadian plant. Figure they’ll start imploding now and beat the rush. Source 🪙 Federal minimum wage rose 45 cents. Workers can celebrate by taking half the family to McDonald’s in a few months! Source 🍻 Far fewer Canadians travelled to the U.S. over spring break. Frat boys feeling so patriotic they wanted to be appalling right here at home. Source CRASH & BURN TO THE MOON 🥵 Research shows people will be 40% poorer if the planet warms by 4˚C. One plus: you’ll need 60% less bronzer. Source 😎 Companies are using image of Nvidia CEO Jensen Huang to sell leather jackets to people who want that just-lost-$28-billion look. Source 🤖 Tinder adds AI bots to teach users how to flirt. Lesson 1: don’t tell dates you’ve been flirting with bots all day. Source 🫦 Two men sue OnlyFans when they suspect they’re not speaking to actual models. Easter Bunny, Santa Claus, Bigfoot lawyering up. Source WHO CARES THE BIG IMPORTANT STORY MONEY & THE WORLD Six Huge Ways Canada Has Changed Over the Past 10 Years Ten years is an eternity in a modern economy. And that’s roughly how long Justin Trudeau served as prime minister. A whole lot changed during his decade in office, and if Trudeau’s successor holds on to the job for as long as he did, he or she will surely lead Canada through even more changes. Trudeau’s legacy is for others to debate — we focus on money and markets around here — but, with a federal election coming up, we thought we’d zero in on six concrete ways Canada has transformed since 2015. Because when you’re headed somewhere new, it helps to know where you’ve been. Canada’s tech scene boomed. Then our talent got raided. By the mid-2010s, Nortel was dead, BlackBerry was dying, and Canada’s tech scene was DOA. Then came Shopify. Its IPO in 2015 gave Canadian tech its Amazon — a centre of gravity for an entire industry. Today Toronto is home to North America’s third-largest tech workforce, and its stiffest challenge is persuading talent to remain in Canada. Shopify stayed put, but promising Canadian companies often decamp for the U.S., along with nearly 25% of Canadians with a STEM degree. For the past decade, we had a good strategy for restocking the talent pool, but, well, about that… Immigration drove the economy. Then came the backlash. Few countries have been more welcoming than Canada since 2015: immigration has nearly doubled, pushing Canada’s foreign-born population up to nearly 25% — the highest share among G7 countries. The newcomers have fuelled innovation, expanded the labour force, and increased consumer spending — but public sentiment began to shift as the influx put even more strain on the already-strained housing market. Canada’s doors aren’t closing, but, to hear the politicos describe it, Ottawa will need to walk a fine line between much-needed economic growth and keeping the public happy. Child care got cheaper! And not just by a little bit, either, thanks to the broad rollout of $10-a-day kid care beginning in 2021. This chart illustrates just how quickly day-care prices have plunged since then. The housing market has gone from outrageous to out of control. In 2015, the average Canadian home price was $413,000. By the end of 2024, that number had jumped to $720,000, far outpacing wage growth. We continue to have one of the world’s least-affordable housing markets, and the gap between the home-owning haves and the renting have-nots keeps widening. Prospective buyers are giving up hope, while property owners keep watching their net worth climb. It’s a cultural powder keg. No wonder all the major PM candidates are promising to build more homes — fast. Inflation returned with a vengeance from a generation-long slumber. For Canadians raised on the promise of stable prices, the past five years have been a shock to the system: prices have climbed faster than any time since the early ’90s, shooting up by 30% since late 2019. And with other trends like “shrinkflation” (same price, smaller product) and “tipflation” (25% for handing over coffee), a staple of Econ 101 is now back in our vocabulary for good. Cannabis has become a top cash crop. Canada legalized recreational weed in 2018. Today the industry employs north of 150,000 people, and more than one in three Canadian adults are customers. In the first three years of legalization, cannabis contributed $43.5 billion to the national GDP. If anything, weed is too plentiful now: most legal dispensaries are losing money. Goal for the next decade: build houses as fast as we open pot shops? —Owen Guo Last week in this space, we linked to a chart showing long-term stock returns, but the link was busted. Here’s the chart. Sorry about that. OTHER VERY GOOD READS 🚢 China’s New Barges Are a Warning for Taiwan* The vessels appear designed for an invasion. | The New York Times 🐻 You Probably Shouldn’t Panic Sell to Avoid Drawdowns History suggests caution during times of turbulence. | Wealthsimple Magazine 🗿 Trump’s Aggressive Push to Roll Back Globalisation* On the risks of a 1930s-style trade war. | Financial Times 🇨🇦 The Case for 100 Million Canadians Economic growth requires population growth. | The Walrus *Article is paywalled, which, yeah, is kind of annoying. But we think good journalism is worth paying for. THE WISDOM OF SOCIAL We’re just not going to open our trading app for a while… 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), Dan Xin Huang (news editor), (Ambrose Martos (fact checker), Ciara Rickard (copy editor), Clare Douglas (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). Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 VIEW IN BROWSER PRIVACY POLICY UNSUBSCRIBE Mortgage Rate: Rate as of April 3, 2025. High ratio insured mortgage rates shown. Based on a $300,000 mortgage with less than 20% down payment. Pine's annual percentage rate and the annual interest rate for these mortgages are the same, and the property valuation fee is waived. Rate may be changed at any time without notice. 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