Morning Update: Freeland warned bank founders about risk of Chinese coercion

Good morning,

Finance Minister Chrystia Freeland is raising national-security concerns about Wealth One Bank of Canada, telling three of its founding shareholders that they could be susceptible to Chinese government coercion, according to two sources.

The shareholders are also facing allegations from other Canadian financial institutions that they have engaged in money laundering, according to a letter sent by Freeland to the three individuals late last year.

Toronto-based Wealth One and these principal shareholders have been under national-security investigation by the Canadian Security Intelligence Service since 2021, and most recently by officials in the federal Finance Department who deal with national security, according to the two sources.

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Ottawa paid out more than $37-billion in pandemic wage subsidies to businesses with tax debts

The federal government paid $37.7-billion in pandemic wage subsidies to businesses with tax debts, and $1-billion to insolvent companies, raising new concerns about the level of screening Ottawa applied to its most generous COVID-19 support program.

The $37.7-billion represents over 37 per cent of the total cost of the Canada Emergency Wage Subsidy, which accounted for $100.7-billion of the $210.7-billion spent on pandemic benefits to individuals and businesses.

The CEWS was paid directly to employers experiencing significant revenue declines during the pandemic, as a way of helping them keep employees on payroll. The fact that billions went to companies with tax or insolvency problems exposes issues with the program’s design, given that many of the businesses were already struggling for reasons unrelated to COVID-19 and were not likely able to maintain their staffing levels.

War’s anniversary rings hollow for Ukrainians who have felt under siege since 2014

Ask a Ukrainian where they were on Feb. 24 of last year and they’ll likely tell you they were awakened just before dawn by the first sirens and explosions of Vladimir Putin’s invasion. But ask them where they were when Russia’s war against Ukraine began and they’ll give you a very different answer.

Almost everyone in Ukraine agrees their country has been at war since February, 2014, when pro-Western protesters in Kyiv overthrew the Russian-backed government of Viktor Yanukovych. Almost simultaneously, Putin sent masked soldiers into the strategic Crimean Peninsula, in the south. The troops seized government buildings and military sites in a stealth operation that culminated with Putin declaring a month later that he had annexed Crimea to the Russian Federation.

• The Globe’s eyes in Ukraine: Photojournalists on the war images that stay with them forever
• Putin says Russia will deploy nuclear missiles

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Also on our radar

Foreign homebuyer ban slows construction: Canada’s ban on foreign purchases of residential property is creating barriers to construction of new rental housing, another unintended consequence stemming from a law that was supposed to help Canadians buy more homes by barring foreign competition.

Police-involved fatal incidents on the rise in Canada: Police use of deadly force is rising in Canada despite pledges from political leaders to curb the violence, according to newly released research. Canadian police officers killed 69 people in 2022, the highest known total in a single year, according to data gathered by a group of academics and members of advocacy organizations.

Israeli strikes hits Gaza: Israel’s forces conducted strikes in the Gaza Strip today after rockets were fired from the area, the military said, a day after a raid in the flashpoint city of Nablus sparked clashes in which 11 Palestinians were killed and over 100 wounded.

• Israel’s Itamar Ben-Gvir brings fury from the right-wing fringes to Netanyahu’s government

Non-binary person says OHIP discriminated against him: A non-binary person is accusing OHIP of discrimination after the Ontario government-run insurance plan denied him coverage for the gender affirming surgery he sought.

Google tests blocking of news content for some Canadians: Google is testing ways of blocking Canadians’ access to news websites in response to the federal government’s online news bill, which would force the company and other tech giants to compensate news organizations for using their work.

Telescope uncovers massive galaxies: Astronomers have discovered what appear to be massive galaxies dating back to within 600 million years of the Big Bang, suggesting the early universe may have developed quickly to produce these “monster” galaxies.

Morning markets

Chip earnings, rate concerns drive sentiment: Global shares mostly eked out slim gains on Thursday as strong earnings in the semiconductor sector were overshadowed by news that the Federal Reserve would continue on its path of raising rates to quell inflation, but by taking smaller steps. Just after 5:30 a.m. ET, Britain’s FTSE 100 slid 0.43 per cent. Germany’s DAX gained 0.33 per cent and France’s CAC 40 was up 0.26 per cent. Hong Kong’s Hang Seng lost 0.35 per cent. Markets in Japan were closed. New York futures were positive. The Canadian dollar was higher at 73.87 US cents.

What everyone’s talking about

Editorial: “Alberta Premier Danielle Smith wants to clean up old wells, ones that haven’t produced any oil or natural gas for decades yet still blight the province’s landscape. She’s got the right goal in mind – industry has been far too slow remediating old wells – but where Ms. Smith goes wrong is the proposed method.”

Rob Carrick: “For now, a lot of households are in a tough spot financially as a result of high inflation and interest rates. Only when the big spenders start pulling back do we have a hope of seeing lower rates and more modest price increases.”

Today’s editorial cartoon

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Living better

Tune up your RRSPs with a few helpful tweaks

When it comes to saving for retirement, don’t wait too long to get it done. It’s never too late, but time is your ally. Let’s look at three RRSP tips to improve the outlook for your financial future.

Moment in time: Feb. 23, 1945

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U.S. flag is raised on Iwo Jima

The photo has been seen around the world – Associated Press photographer Joe Rosenthal’s Pulitzer Prize-winning image of six U.S. Marines raising the American flag on Iwo Jima’s Mount Suribachi. It was the second flag to be planted on the summit that day, after the first one was deemed too small to be seen from the far side of the volcanic island. Mr. Rosenthal had heard that a second group of Marines were making their way to the top, made the trip past Japanese mines and arrived just in time to immortalize Harold Keller, Ira Hayes, Harold Schultz, Harlon Block, Franklin Sousley and Michael Strank as they hoisted the larger Stars and Stripes into place. What the photo does not show, of course, is the tremendous savagery of the previous four days of fighting and the subsequent three weeks on Iwo Jima. Japanese troops had constructed a network of tunnels, forcing U.S. soldiers to systematically extirpate them from the sand and ash. Strank, Sousley and Block would be killed in the battle, along with some 6,800 other Marines. The Japanese fought to the death, with more than 18,000 fatalities, making the path ahead in the Pacific War abundantly clear and terrifying. Massimo Commanducci

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