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Streetwise Streetwise newsletter: CMHC head takes on real estate industry

Here are the top reads on deals and financial services over the last 24 hours,

'Lobby is on the wrong side of this issue’: CMHC head takes on real estate industry with defence of mortgage stress tests: Canada would need a “calamity” in the housing market to warrant adjusting the mortgage stress test, which is helping affordability, according to the head of Canada’s national housing agency. Evan Siddall, chief executive officer of Canada Mortgage and Housing Corp., said in an interview Monday that he became a passionate defender of the tougher mortgage qualification rule because he felt no one else was publicly standing up to support the federal program against criticisms from groups working in the real estate sector. Story (Janet McFarland and James Bradshaw, for subscribers)

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Pension funds tout rewards of active investing: The active investing approach used by the Canada Pension Plan Investment Board appears to be paying off, adding nearly $50-billion to the fund’s asset base over the past 12 years, according to an analysis by the Parliamentary Budget Office (PBO). Since shifting away from a passive indexing strategy in 2006, the CPPIB has since invested heavily in alternative markets and private equity, building up large stakes in things such as office towers, toll highways and shopping centres around the world. Story (Tim Shufelt, for subscribers)

Is Indigo another candidate to go private?: At the end of May, Indigo Books & Music Inc. announced a loss of almost $37-million for the year ended March of 2019, and the stock promptly tanked 20 per cent on heavy volume. Chief executive officer Heather Reisman said the company had incurred significant expenses associated with store renovations and relocations, compounded by the Canada Post strike. Same-store sales were down 1.1 per cent, and the sole U.S. location is “going to do okay, but it is not knocking it out of the park.” Story (Robert Tattersall)

Startup airlines say consolidation will mean higher prices: The head of a Vancouver-based startup airline says the proposed takeovers in the Canadian aviation industry will bolster the country’s two dominant players and drive up ticket prices for travellers. Story (Eric Atkins, for subscribers)

Bay Street Deconstructed: A lesson in improving financial literacy and knowledge of finance careers: “Does anyone know what Bay Street means?”

“It’s a street in downtown Toronto,” shouts a student from the front of the cafeteria.

The response gets a room full of laughter among 90 Grade 10 students at Martingrove Collegiate Institute in west-end Toronto, who are attending an afternoon session on financial literacy.

But the answer reflects the growing concern among educators, policy-makers and politicians across the country about the lack of financial education within Canada’s secondary schools. Story (Clare O’Hara, for subscribers)

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MORE DEALS NEWS

Activist investor Bill Ackman opposes US$120-billion merger of United Technologies, Raytheon: Billionaire investor William Ackman’s activist hedge fund Pershing Square Capital Management LP is opposing United Technologies Corp.’s planned US$120-billion aerospace merger with defence contractor Raytheon Co., a person familiar with the matter said on Tuesday. Story (Reuters)

IN CASE YOU MISSED IT

Can an insurance company do banking better? Manulife takes a stab at it: Two words you never thought you’d say in imagining a brighter future for chequing and savings accounts: Manulife Bank. A non-factor for years, the banking division of insurance giant Manulife Financial Corp. is upping its game. On Monday, Manulife Bank introduced a package of services designed to claim a share of a market for daily banking that is crowded with big banks, alternative banks, credit unions and upstart financial technology companies. Opinion (Rob Carrick)

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