Toronto and Vancouver are heading toward higher home prices
That's according to a new report from economist Benjamin Tal, who says demand will push prices higher despite government efforts to cool the markets (for subscribers). "If you think those cities are unaffordable now, just wait," said Tal, deputy chief economist at CIBC World Markets. Home sales in the two cities might soften in the next year, but a lack of supply will eventually push things back up.
Canada's banking regulator recently revealed new mortgage stress-test rules that will make it harder to qualify for new mortgages. But Tal argues that prospective buyers will find workarounds like turning to private lenders who aren't bound by the new regulations. He also says policy makers are also underestimating demand from new immigrants, foreign students and foreign workers.
This is the daily Morning Update newsletter. If you're reading this on the web, or if someone forwarded this e-mail to you, you can sign up for Morning Update and all Globe newsletters here.
If you like this newsletter, you might want to subscribe to our Evening Update newsletter. It's a roundup of the important stories of the day that will be delivered to your inbox every weekday around 5 p.m. ET.
Canada's new approach to Trump's NAFTA demands could risk blowing up talks
Ottawa is aware that taking a hard line on Washington's "poison pill" protectionist proposals could jeopardize negotiations, but that's a risk it has deemed worth taking, sources say. The new strategy will be used when talks resume in Mexico City this week. The Trudeau government will aim to counteract the tough stance by trying to reach quick deals on less contentious issues. Sources say some of the major deal-breakers proposed by the U.S. include demands for 50-per-cent U.S. content in Canadian- or Mexican-made vehicles, and a sunset clause that would kill NAFTA in five years unless all three countries agree to keep it in place.
Donald Trump Jr. exchanged direct messages with WikiLeaks on Twitter
The President's son released his interactions with the organization's Twitter account after The Atlantic reported on them. The messages, which were sent between September of 2016 through July of this year, had been turned over to committees investigating Russian interference in last year's election. Trump Jr. asked WikiLeaks about a rumoured upcoming leak and also wrote that he would "ask around" about a political action committee mentioned by the site. A lawyer for Trump Jr. said "we have no concerns about these documents." But the top Democrat on the House intelligence committee, Adam Schiff, said the messages demonstrate "once again a willingness by the highest levels of the Trump campaign to accept foreign assistance."
The death toll in the Iran-Iraq earthquake has surpassed 450
The magnitude 7.3 quake hit a border region that was rebuilt after an eight-year war between the two countries in the 1980s. Iran's government oversaw the construction of a low-income housing project in the area which was criticized for being built cheaply. Rescue operations in Iran have come to a close as the focus shifts to setting up makeshift camps and treating the thousands who were injured.
IN CASE YOU MISSED IT
Toronto is set to become Lyft's first international destination
The ride-hailing company will begin servicing the city in time for the holiday season. While Uber is still the biggest player in the market, Lyft has been gaining ground. In the U.S., Uber dropped from 83 per cent of ride-sharing spending to 78 per cent earlier this year after being hit with a series of scandals. Lyft, meanwhile, rose from 16 per cent to 21 per cent. Like Uber, Lyft has also fought local governments over attempts to regulate it as a taxi company.
Strong German economic growth data drove the euro to a three-week high on Tuesday and gave European stocks a lift after five days of falls put them at a two-month low. The uplift to sentiment came after disappointing Chinese industrial and retail figures had subdued Asia. Tokyo's Nikkei ended flat, while Hong Kong's Hang Seng lost 0.1 per cent, and the Shanghai composite shed 0.5 per cent. In Europe, London's FTSE 100 was up 0.2 per cent by about 5:35 a.m. ET, with Germany's DAX and the Paris CAC 40 little changed. New York futures were down, and the Canadian dollar was at just about 78.5 cents (U.S.). Oil prices held largely steady.
We've launched a new Top Business: Evening Edition newsletter providing a summary of the biggest business headlines of the day. You can sign up for it here.
WHAT EVERYONE'S TALKING ABOUT
What's so scary about free speech on campus?
"Back in the 1960s, a free-speech movement swept North American campuses and launched a new era of social and political ferment. It was a heady, liberating time – time for dissent, challenge and dangerous ideas. It was perhaps the counterculture's finest hour. Today, university campuses are where free speech goes to die. Undesirable speakers are cancelled or shut down and unpopular opinions are suppressed. The inheritors of the counterculture believe that free expression is like kryptonite – so deadly that it will cause lethal damage unless it is contained or neutralized." – Margaret Wente
Toronto finally finds the courage to address its commuting mess
"Rush hour on Toronto's King streetcar is usually hell on steel wheels. The packed streetcars that travel the city's busiest above-ground public transit route trundle along at the pace of a Victorian landau, stuck in traffic like everyone else. Walking is often faster. Cyclists fly past. So commuters who boarded the King car on Monday, the first weekday of a year-long experiment in getting the lead out, were amazed, even a little bewildered, when they looked out the front windshield and saw, well, nothing. … Finally, after years of chin stroking, the city has found the courage to do something bold about its commuting mess. Finally, it is coming to understand that cities that want to avoid strangling on their own growth have to change how they move people around." – Marcus Gee
Taxing marijuana: Start low and go slow
"A carton of 200 cigarettes costs $135.40 in Manitoba, of which $96.14 is taxes. In Quebec, by comparison, a carton costs $88.67, of which $55.68 is taxes. Should we be taxing marijuana to that degree? Some day, perhaps, but at this point the goal is to undermine the black market, and to do so, prices must be competitive. When people start smoking pot – for medicinal reasons or otherwise – they are advised to "start low and go slow." That is sage counsel for the tax man as well." André Picard
With osteoarthritis and exercise, some pain leads to gains
Roughly three million Canadians struggle with osteoarthritis. Regular exercise is the only way to reduce the joint pain and keep mobility in check, but at the same time it can hurt and even speed up the disease's impact. Some forms of exercise, though, may be less impactful on joints than others. One study comparing running and cycling found that even though the cumulative stress placed on the knee was equal, biking was a safer option.
MOMENT IN TIME
Ray Charles arrested for drugs
Nov. 14, 1961: "A fellow who lives in the dark has to have something," a 31-year-old Ray Charles told police on this day, upon his arrest on drug charges in Indianapolis. It was not an unreasonable explanation, coming from a blind, black musician living in a country in which African-Americans were by law treated as second-class citizens. Detectives said they found a hypodermic syringe, a cold cream jar full of marijuana and 10 empty gelatin capsules containing heroin residue in his hotel room. The case would be dismissed, but in 1964 the Hit the Road Jack hitmaker was again arrested for drug possession. In 1966, an unrepentant superstar reflected upon his fondness for non-prescription narcotics and treatment for addiction with the songs I Don't Need No Doctor and Let's Go Get Stoned. "I don't regret a damn thing," he would later say. – Brad Wheeler
Morning Update is written by Arik Ligeti.