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Canada joined the U.S. and other Western allies, including NATO, in accusing the Chinese government of masterminding a sophisticated hack of Microsoft’s services in early 2021 – but they stopped short of imposing sanctions against Beijing.

The broad coalition said it’s “confident” the security breach of Microsoft Exchange, a type of e-mail server software, can be traced back to state actors affiliated with the People’s Republic of China. Some 400,000 servers were affected by the cyberattacks discovered in early March.

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“This activity put several thousand Canadian entities at risk – a risk that persists in some cases even when patches from Microsoft have been applied,” said Foreign Affairs Minister Marc Garneau.

The Chinese embassy in Ottawa was not immediately available for comment. China’s foreign ministry spokesman Zhao Lijian said the accusation was “fabricated out of thin air” for political goals.

Read more: Japan says companies targeted by China-backed cyberhacking group

A man walks past the office of Microsoft in Beijing on Jan. 24, 2019.

THOMAS PETER/Reuters

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Ottawa scraps delay on law giving small businesses tax breaks

The federal government retreated from delaying until next year the implementation of new legislation designed to give small businesses more generous tax treatment.

The federal Finance Department initially contended the tax changes wouldn’t take effect until Jan. 1. But legislative experts, and federal legislation, say the bill came into force on June 29, the same day it received royal assent. Now, after criticism from business groups, the government has agreed that the legislation is already in effect.

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Under Bill C-208, a Conservative private member’s bill, small- and medium-sized business owners can claim proceeds from the sale of shares to an adult child or grandchild as capital gains, rather than dividend payments. Capital gains are subject to a lower tax rate. The bill was not supported by a majority of the Liberal caucus.

Confusion over the law’s implementation date led Wayne Easter, the Liberal finance committee chair, to convene a one-day session to clarify the situation. The meeting will go ahead as scheduled today. Finance Minister Chrystia Freeland said in a statement the government still intends to introduce amendments, but will “honour the spirit” of the original bill.

Ontario students should be back in class, barring severe COVID-19 surge

Back-to-school season should look more or less normal for Ontario students, according to the province’s COVID-19 Science Advisory Table and pediatric hospitals.

As long as Ontario’s case counts don’t spike, students can hope for a fall return with extracurricular activities, no lineups for daily health checks at the door and optional masking.

Ronald Cohn, the president and chief executive officer of Toronto’s Hospital for Sick Children, said schools “should not be used as a lever for pandemic control unless we find ourselves in a catastrophic circumstance.”

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Catch up on more pandemic-related news:

Subscribe to our Olympics newsletter: Tokyo Olympics Update features original stories from Globe reporters in Canada and Tokyo, will track Team Canada’s medal wins, and looks at past Olympic moments from iconic performances.

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ALSO ON OUR RADAR

Fear, grief haunts Asia Bibi, who fled Pakistan with a target on her back: Asia Bibi was accused of blasphemy by Pakistan, and although Canada has provided refuge to her and her husband, she still lives in fear of being assassinated.

Markets tumble as anxiety creeps in among investors over COVID-19 surge: In one of the biggest setbacks for financial markets since the vaccination campaign kicked off earlier this year, stocks, commodities, bond yields and the loonie fell sharply. The drop across the board has sparked renewed anxieties about another wave of COVID-19 infections, casting doubt on the durability of the global economic recovery.

Haiti’s acting PM to cede power: Claude Joseph, the acting prime minister of Haiti, is resigning to make way for Ariel Henry, who had been due to replace him the week the country’s president was assassinated. Both men had declared themselves to be Haiti’s legitimate prime ministers after Jovenel Moïse’s killing.

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Marineland faces order to fix water system after inspection finds mammals ‘in distress’: Ontario’s watchdog for animal welfare found that marine mammals at the tourist attraction were “in distress” because of poor water quality. Marineland has been ordered to repair the water systems in pools that are home to belugas, dolphins, walruses and other mammals at its Niagara, Ont., park.

Meet Canada’s Olympic flag-bearers: Three-time Olympic basketball player Miranda Ayim and Nathan Hirayama, who is co-captain of the men’s rugby sevens team and is making his Olympic debut, will carry the Canadian flag on Friday.

Prince Harry writing ‘intimate’ memoir to be published in late 2022: Prince Harry has an “intimate and heartfelt” memoir in the works that promises to offer a “definitive account of the experiences, adventures, losses, and life lessons that have helped shape him,” according to a statement from Penguin Random House. Financial terms were not disclosed, though the publisher said the proceeds would go to charity.


MORNING MARKETS

Europe rebounds: European shares bounced back from their worst day of the year on Tuesday, but German bond yields slipped to fresh five-month lows as a reminder that investors remained worried the spread of the Delta coronavirus variant could derail the economic recovery. Just before 6 a.m. ET, Britain’s FTSE 100 rose 0.62 per cent. Germany’s DAX and France’s CAC 40 gained 0.46 per cent and 0.86 per cent, respectively. In Asia, Japan’s Nikkei fell 0.96 per cent. Hong Kong’s Hang Seng slid 0.84 per cent. New York futures were higher. The Canadian dollar was trading at 78.45 US cents.


WHAT EVERYONE’S TALKING ABOUT

The moon’s ‘wobble’ ought to be the wakeup call we need to build resilient cities

“We normally think about climate change as a steady slope – a bit hotter or wetter each day, adding up over time – but such non-linear and tipping-point events in climate science throw all that out.” - Elliott Cappell, director for climate change and environmental, social and governance at WSP Canada

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Thirty years after Gwen Jacob’s arrest for going topless, little has changed

“More than ever, our bodies are being objectified, commodified and hypersexualized, and social media has strengthened the pressure to achieve an impossible ideal. Instead of celebrating diversity, we now have digital filters that attempt to make us all look the same.” - Stéphane Deschênes, owner of Bare Oaks Family Naturist Park


TODAY’S EDITORIAL CARTOON

David Parkins

David Parkins/The Globe and Mail


LIVING BETTER

Should sunscreen be applied directly onto the skin or over my moisturizer?

Whether to apply sunscreen directly onto the skin or over your moisturizer depends on the type of sun protection you have, according to dermatologist Ben Barankin. For example, if you’re using a creamy, moisturizing sunscreen, you can apply that first and then moisturize about a minute later.

Globe Craft Club: join artist Jenny May for some mosaic fun

For anyone who has ever hung onto a lone earring or a broken tchotchke they can’t bear to part with, Jenny May has a class for you. The London, Ont., artist is leading a Facebook Live session with Globe Craft tonight at 7 p.m. ET on how to turn found and salvaged objects into an eclectic mosaic.

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MOMENT IN TIME: July 20, 1885

Métis leader Louis Riel goes on trial for treason

A studio portrait of Louis Riel, circa 1876.

Manitoba Archives via CP

Métis leader Louis Riel appeared in a Regina courtroom on this day in 1885. He was charged with high treason (under a 1352 British statute from the reign of Edward III) for his role in the North-West Rebellion. Even though dozens of Métis and First Nations men had been arrested and charged with rebellion crimes, the Conservative government of Sir John A. Macdonald wanted to use the state trial to blame Riel, and Riel alone, for the troubles that spring. Believing himself to have a messianic mission, Riel used his testimony, especially his closing remarks, to affirm the rights of the Métis people while castigating the federal government for its complete disregard of the region and its interests. He refused to support the basis of his own lawyers’ defence – that he was insane – fearing that his life’s work on behalf of the Métis people would be undermined. The six-man jury took just 30 minutes to reach a guilty verdict, but recommended mercy. Despite several appeals and doubts about his mental fitness, Riel was hanged at Regina on Nov. 16. He was buried in the cathedral cemetery in Saint Boniface, Man. Bill Waiser


Read today’s horoscopes. Enjoy today’s puzzles.


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