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Canada Evening Update: Air Canada in exclusive talks to buy Transat; Scheer outlines economic priorities

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WHAT YOU NEED TO KNOW

Air Canada in exclusive talks to buy Transat in $520-million deal

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Air Canada says it has entered exclusive talks to buy Montreal-based airline and tour operator Transat A.T. Inc. for $13 a share in a transaction worth $520-million.

The country’s largest airline said the deal presents a “made-in-Quebec” path to better job security for employees of both companies and offers travellers a greater array of routes and holiday packages.

The takeover, subject to shareholder and regulatory approvals, comes on the heels of Onex’s $3.5-billion deal for WestJet Airlines, which it plans to take private (for subscribers).

Context: Globe subscribers, check out what we know so far about the potential deals.

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Conservative Leader Andrew Scheer outlines economic priorities, takes aim at Trudeau’s leadership and spending

Conservative Leader Andrew Scheer said in a speech today that his economic policy will be a dramatic departure from Prime Minister Justin Trudeau’s and took aim at the country’s increasing deficits under Trudeau’s leadership and his spending.

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If the October federal election brings his party to power, he said his government would seek to balance the budget, but stopped short of saying when or how that would happen. Scheer also said he would:

  • Scrap the carbon tax.
  • Repeal Bill C-69, relating to the federal assessment process for major construction projects.
  • End the ban on tanker traffic off the coast of British Columbia.

Bank of Canada says household debt, housing worries easing but raises other concerns

Threats to the financial system from household debt and home prices have “declined modestly," the Bank of Canada said in its 2019 Financial System Review. That’s because people are borrowing less, while the country’s two hottest real-estate markets – Toronto and Vancouver – have cooled in response to higher interest rates and stricter mortgage rules.

But the central bank raised other worries, including the probability of a severe recession, which it says is “elevated and increasing.” It blamed the deteriorating risk environment on slower economic growth, trade tensions and weakness in the oil and gas sector. Other concerns include rising corporate debt and risks related to climate change.

The latest on Canada-China relations: Trudeau reacts to detained Canadians being officially arrested

Justin Trudeau reacted to Beijing’s formal arrest of two Canadians accused of violating national security, saying China’s behaviour is increasingly at odds with that of democratic nations around the world (for subscribers).

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Former diplomat Michael Kovrig and entrepreneur Michael Spavor were detained in China on Dec. 10, in apparent retaliation for the Dec. 1 arrest in Vancouver of Huawei executive Meng Wanzhou at the request of the United States.

Kovrig and Spavor have been held for months in harsh conditions without access to lawyers. The were "officially arrested” recently for state-secrets-related crimes, China’s foreign ministry spokesman Lu Kang said.

Separately, Nova Scotia Premier Stephen McNeil said he told a senior Communist Party official during recent trade talks that Canadians need to feel “safe” and protected by the rule of law as he boosts tourism ties between his province and China.

Tensions have escalated between Ottawa and Beijing, spilling over to trade, with China suspending imports from Canadian pork producers and blocking shipments of canola products (for subscribers).

And on the China-U.S. trade file: Beijing is also targeting U.S. pork, with Chinese buyers dropping orders for 3,247 metric tonnes – the biggest cancellation in more than a year, according to U.S. Department of Agriculture data.

ALSO ON OUR RADAR

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Bank of Montreal cutting jobs: Bank of Montreal is trimming the ranks of its capital-markets arm, cutting about 100 jobs as the bank continues to hunt for ways to control its costs (for subscribers).

Trump fully pardons Conrad Black: Donald Trump has granted a full pardon to former Canadian media baron Conrad Black, a long-time friend and one-time business partner who has written a biography and numerous columns lauding the U.S. President.

N.S. woman survives knife attack after playing dead, running 10K for help: A Nova Scotia woman survived a knife attack on the Appalachian Trail by playing dead after being beaten and stabbed – and then ran 10 kilometres for help, police in Virginia say (for subscribers).

Rolling Stones Ontario date: The Rolling Stones are getting back on the road after postponing their tour because Mick Jagger needed medical treatment, including one Canadian stop: June 29 at Burl’s Creek Event Grounds in Oro-Medonte, Ont., northeast of Barrie (for subscribers).

MARKET WATCH

Canada’s main stock index rose for the third straight day, boosted by energy stocks which gained on the back of higher oil prices (for subscribers). The Toronto Stock Exchange’s S&P/TSX Composite index closed up 125.72 points at 16,443.86.

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Wall Street stocks were buoyed by deal-making news and solid earnings from Cisco and Walmart. The Dow Jones Industrial Average rose 214.66 points to 25,862.68, the S&P 500 gained 25.36 points to end at 2,876.32 and the Nasdaq Composite added 75.90 points to close at 7,898.05.

Got a news tip that you’d like us to look into? E-mail us at tips@globeandmail.com. Need to share documents securely? Reach out via SecureDrop.

TALKING POINTS

Solving the problems that plague our cities might be easier than you think

“They do require a clear-eyed vision of the future we are seeking to create as a country, a rethinking of how we approach innovation, a recommitment to delivering solid public-policy outcomes through feasible actions, a decoupling of the thinking that new ideas requires huge sums – and the gumption to act now.” - Jennifer Keesmaat, former chief planner of Toronto

Two Supreme Court justices, enduring mental illnesses decades apart, show how far we’ve come

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“If the highest court in the entire country can at last recognize just how wrong it is to stigmatize and punish its members just for being ill, hopefully so can everyone else.” - David Butt, criminal lawyer

A long series looms as the Raptors let Game 1 slip away against the Bucks

“The evening’s greatest takeaway was that this series has the feel of something that could go on for a while. The two teams seem evenly matched – which is usual at this point – but also interestingly matched. Tactics will play a major role here.” - Cathal Kelly

LIVING BETTER

Decade-long mortgages have always been a really bad idea for almost everyone. One big reason: The best 10-year fixed rates have never outperformed the best five-year fixed rates over any 10-year period in modern history. But HSBC has just announced a 3.24 per cent 10-year fixed rate, the lowest 10-year fixed rate ever advertised by a lender in Canada, according to RateSpy.com data. Bank of Canada Governor Stephen Poloz recently called on lenders to sell more long-term mortgages, to reduce financial system and borrower risk.

LONG READ FOR A LONG COMMUTE

Let’s teach our teens how to show a little kindness

"I called the principal, [my son’s] homeroom teacher and the conversations sounded canned and downright infuriating. ‘Boys will be boys,’ ‘high school is tough’ a social hierarchy that, by definition, needs a bottom tier where my son was firmly and painfully planted. But what if, I thought, what if we just stop buying into those lines of reasoning? What if we made it cool to be kind? I could see the hashtag already.

“The idea attracted like-minded souls and within a couple of weeks I had joined forces with two incredible mothers, one whose son was brutally beaten up on his way home from school a few weeks into the new year. We met with the school administrators to pitch a kindness campaign, challenging all kids in all grades to perform three acts of kindness every day. Sit with someone eating alone. Say a kind word to someone who seems lost. Look someone in the eye and smile. Each act could be posted on a shared student Instagram account run by the school, where it would all be on display. Every single good act. Every day. Celebrate. Cheer it on. Create a shift in culture, one act at a time.” Read Ioanna Roumeliotis’s First Person essay here.

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