Here are five things you need to know this morning:
Liberal race off and running: It’s been another eventful 24 hours in Canadian politics as former Bank of Canada head Mark Carney and former finance minister Chrystia Freeland have both officially tossed their hat into the ring to be the next leader of the Liberal Party and Canada’s Prime Minister. Carney kicked off his campaign at an event in Edmonton yesterday, offering an economy-focused pitch pumping up his bona fides on the file. Freeland, meanwhile, is making it official this morning on social media, noting an official launch party will be on Sunday.
TikTok on the clock: The clock is still ticking on TikTok’s status in the U.S. as a Sunday deadline for the app’s Chinese owners to either divest its U.S. operations or face a ban rapidly approaches. The Supreme Court has promised to rule on the company’s last-ditch appeal of the ruling, but they’ve signaled they are unlikely to overrule the ban. And even if they were going to, they are running out of runway to do it before the Jan. 19 deadline. It’s far from clear what’s going to happen to the app and its 170 million U.S. users, and many market participants aren’t expecting any clarity one way or the other before markets close today. Mark Kelley at Stifel told Bloomberg this morning that his base case scenario is that the decision gets extended so that it’s a football for the incoming Trump administration set to come in next week. Kelley doesn’t expect a ban overall, but if one were to happen, the obvious beneficiaries would be companies like Meta, Google and Snap, which would see a surge in advertising dollars currently being gobbled up by TikTok.
C.D. Howe weighs in on ‘Kafkaesque’ capital gains tax situation: Think tank the C.D. Howe Institute has weighed in on the capital gains tax conundrum, calling the current uncertainty a “quagmire” and a “nightmarish scenario for taxpayers.” If you haven’t been following the story, last year the Liberals proposed an update to capital gains rules to increase the inclusion rate for the first time in almost two decades. But after being carved out of the budget and moved forward as standalone legislation, that law died on the vine when Trudeau prorogued parliament. That seems like good news for investors who didn’t like the rule in the first place, but it is complicated by the fact that the Canada Revenue Agency has been operating as though the bill would become law since June, and already charging it for 2024. This week, Conservative Leader Pierre Poilievre gave some clarity on the topic by definitively stating that if he is elected, he will not move ahead with those changes, but that’s not much help to businesses that have already been tax planning on the assumption it will be the law of the land. C.D. Howe calls the whole thing “Kafkaesque,” which my long dormant memory of myriad college-era English lit classes deems appropriate. Much like Gregor Samsa, we’ll see what this debacle metamorphosizes into.
TD Bank speeds up CEO transition: TD Bank is moving up the timeline for its executive transition, announcing this morning that Raymond Chun will be CEO as of February 1. That’s more than two months earlier than the previously announced plan. Five long-serving directors will also leave the board, and the chair, Alan MacGibbon will step down and retire as director by the end of this year. TD says 41 executives at the bank saw their bonus pay slashed last year, resulting in total reductions of $30 million. The company has been dogged by violations of money-laundering guardrails in its U.S. operations, resulting in an asset cap that increased scrutiny that is weighing on the shares. TD normally trades at a premium to the average of its Big Six bank rivals, but currently trades at a discount.
Lundin Mining misses production estimates:
We’ll be watching shares in Lundin Mining today after the Vancouver-based miner reported preliminary copper production for the fourth quarter that missed the average analyst estimate. Lundin hit a record high production in its recently completed fiscal year, but for the current one it expects production of all metals to decline due to divestment of mines in Portugal and Sweden.