Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Business Briefing

Why Canadians should fear clandestine U.S. snooping program Add to ...

These are stories Report on Business is following Friday, June 7, 2013.

Follow Michael Babad and the Globe’s top business stories on Twitter.

Tech giants caught in up controversy
The world’s biggest Internet and technology companies are caught up in a storm of controversy this morning after revelations of a clandestine U.S. snooping program said to target foreigners.

Revelations of the program in The Guardian and The Washington Post involve Facebook Inc., Google Inc., Yahoo Inc., Apple Inc., Microsoft Corp., YouTube, Skype and others.

The companies appear to be targets rather than active participants in the program called Prism, some saying they didn’t know the scheme existed.

The revelations are raising concerns over the use of private data at a time when “personal information has become a red-hot commodity,” as Canada’s privacy watchdog put it.

There should be heightened concern in Canada because just yesterday, for example, privacy commissioner Jennifer Stoddart warned that the country’s laws have fallen behind as risks abound.

“While other nations’ data protection authorities have the legal power to make binding orders, levy hefty fines and take meaningful action in the event of serious data breaches, we are restricted to a ‘soft’ approach: persuasion, encouragement and, at the most, the potential to publish the names of transgressors in the public interest,” Ms. Stoddart said in her annual report to Parliament.

She was referring to the Personal Information Protection and Electronics Documents Act, which she warned was “conceived in another millennium” and not up to the current task.

“All told, stronger enforcement measures in PIPEDA would provide incentives for organizations to their responsibilities more seriously in the first place and build in privacy protections up front, knowing that the financial consequences of breach under a stronger regime could be real and significant,” Ms. Stoddart said.

According to the reports – and indeed the documents suggest this – Prism is run by the National Security Agency and is legal, if unknown, under U.S. law.

It is aimed at gleaning information from e-mail, online chats, photos, stored data, file transfers, video conferencing, social networking, and “notifications of target activity – logins, etc.,” according to the document that can be seen online from the Washington Post.

(I have this vision in my head of U.S. spooks sitting around, all wearing Google Glass eyewear to avoid getting repetitive strain injury.)

The U.S. Office of the Director of National Intelligence responded late yesterday – on its Facebook page, no less – saying that the “highest priority of the intelligence community is to work within the constraints of law to collect, analyze and understand information related to potential threats to our national security.”

The disclosure of this “top secret U.S. court document,” it added, threatens “irreversible harm” to America’s ability to respond to threats.

(Oh, yeah, and it only snoops on foreigners.)

The companies named took pains late yesterday to distance themselves, Apple saying it has never heard of Prism and allows no government agency to have access to its servers. Facebook, Google and Yahoo said much the same thing, while Microsoft said it responds only to court orders and subpoenas.

Ms. Stoddart warned yesterday that, in Canada, the modern era “demands a law that is strong and mature, nuanced and effective.

“The protection of privacy is not child’s play,” said the commissioner, who is seen leaving the agency after 10 years in the job.

(I’m going to post this on my Facebook page just to see if the Office of the Director of National Intelligence wants to be my friend.)

Jobs market surges
Canada's jobs market isn't just perking up, it's surging.

Or, as Royal Bank of Canada puts it, it was another month of "are you kidding me?"

The Canadian economy churned out a stunning 95,000 jobs in May, and, notably, most them were full-time, The Globe and Mail's Tavia Grant reports.

The unemployment rate dipped to 7.1 per cent, though it still remains above that 7-per-cent mark.

Driving the jobs gain, Statistics Canada said, was the construction industry, among others, and all in the private sector. And among the provinces, Ontario made significant headway, creating 51,000 positions, again mostly full-time.

The building industry added 43,000 jobs, and the ranks of construction workers are now up by 74,000, or 5.8 per cent, from a year ago.

Even Canada's hard-hit young people gained ground, with 54,000 new jobs, though their unemployment rate still stands at more than 13.6 per cent.

Canada has now gained 250,000 jobs, marking an increase of 1.4 per cent, in the past year. And all of them are full-time.

Canada's monthly numbers have been jumping around, and today's report shows May was no exception.

"In a report that seems to be ever more volatile, Canadian jobs figures surprised decisively to the upside in May," said chief economist Avery Shenfeld of CIBC World Markets.

"A gain of 95,000 jobs came with all the bells and whistles, with the job gains dominated by the private sector, by full-time employment, and by paid positions rather than self-employment ... The only negative was a drop in factory employment."

Assistant chief economist Dawn Desjardins looked at the three-month employment trend, which she found more closely tracked the economy's growth rate, slow in the last six months of 2012 but picking up steam early this year.

"We expect that the economy will be growing at a rate closer to its potential in mid-2013 and commensurate with that will be an increase in the average quarterly pace of job creation to just over 20,000 a month," she said.

"In turn, this will support a gradual decline in the unemployment rate to 6.9 per cent at the end of 2013 and 6.5 per cent at the end of 2014."

U.S. jobs market gains
The U.S. economy also turned in a better performance in May, according to today's jobs report, which sparked some juice in the markets.

Some 175,000 jobs were created, The Globe and Mail's Kevin Carmichael reports, better than expected, though the unemployment rate edged up to 7.6 per cent.

The United States needs to create about 100,000 jobs a month just to keep pace with demographic changes, let alone bring back the millions thrown out of work in the recession.

"By revealing a decent rise in payroll employment but a small rise in the unemployment rate, May’s Employment Report had something for everyone," said Paul Dales of Capital Economics.

"Our reading is that it leaves the Fed on track to taper the pace of its monthly asset purchases later this year."

Wallin quits Gluskin Sheff board
Gluskin Sheff and Associates says Pamela Wallin has tendered her resignation from its board as the scandal surrounding the independent senator’s expenses and resident province deepens, The Globe and Mail's Jacqueline Nelson reports.

Gluskin Sheff CEO Jeremy Freedman confirmed the report this morning.

Ms. Wallin had been a member of the Toronto-based investment manager’s board for seven years and has cited Toronto as her home in corporate filings.

Streetwise (for subscribers)

Economy Lab

ROB Insight (for subscribers)

Business ticker

Follow on Twitter: @michaelbabad

 

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories