Canada’s spy agency has issued a warning about the national security risk posed by some foreign investment — but isn’t saying which state-owned enterprises and foreign state actors it’s particularly worried about.
The message was delivered in the Canadian Security Intelligence Service’s 2019 annual public report, tabled in Parliament today.
“Economic espionage activities in Canada continue to increase in breadth, depth and potential economic impact. Hostile foreign intelligence services or people who are working with the tacit or explicit support of foreign states, attempt to gather political, economic, commercial, academic, scientific or military information through clandestine means in Canada,” the report says.
“As difficult as it is to measure, this damage to our collective prosperity is very real.”
The report says that while most foreign investment in Canada is above-board, “a number of state-owned enterprises and private firms with close ties to their government and or intelligence services can pursue corporate acquisition bids in Canada or other economic activities.”
“Corporate acquisitions by these entities pose potential risks related to vulnerabilities in critical infrastructure, control over strategic sectors, espionage and foreign influenced activities, and illegal transfer of technology and expertise,” says the annual report.
“CSIS expects that national security concerns related to foreign investments or other economic activities in Canada will continue.”
The report is just the latest word of caution from CSIS about the rise of economic espionage in Canada. Director David Vigneault has called state-sponsored commercial espionage the “greatest threat” to Canada’s economy.
The 34-page report warns of foreign economic espionage several times, but doesn’t name the state actors involved. Earlier this year, however, the National Security and Intelligence Committee of Parliamentarians (NSICOP), a review body made up of MPs and senators, released a report specifically calling out China and Russia for running “significant and sustained” foreign interference activities in Canada.
CSIS report flags ‘incel’ movement
CSIS’s annual report identified also touched on the threat posed in Canada by violent, ideologically-motivated individuals, including those associated with the so-called “incel” online movement.
Toronto police say they’re treating the killing of a woman at a Toronto massage parlour in February as an act of terrorism after uncovering what they say is evidence suggesting it was inspired by incel ideology.
Supporters of this misogynistic online movement typically express frustration toward women over their own lack of sexual success, and sometimes threaten violence against them. Toronto police and RCMP classify it as an “ideologically motivated violent extremist” movement.
Alek Minassian, the accused driver in the 2018 Toronto van attack that killed 10 people and injured 16 others, said in a police interview he was inspired by incel ideology.
Minassian told police shortly after the attack that his actions were retribution for years of sexual rejection and ridicule by women. His judge-only trial was scheduled to begin in early 2020 but has not yet started.
CSIS says threat actors’ reliance on encrypted technology online remains an obstacle for intelligence agencies.
“They can evade detection by police and intelligence officials, which often presents a significant challenge when governments investigate and seek to prosecute threat actors,” the report says.
“Terrorist entities use cyberspace to enhance the security of their activities … Radicalization, both offline and online, remains a significant concern to Canada and its allies.”
Wednesday’s report also looked at the number of security screenings CSIS has performed over the last fiscal year as part of its mandate. The security assessments help flag security concerns linked to terrorism and espionage, and help departments and agencies with decisions about whether to grant, deny or revoke security clearances.
Through the Immigration and Citizenship, program it screened 217,400 citizen applications and 41,000 refugees last year.
More China coal investments overseas cancelled than commissioned since 2017
More China-invested overseas coal-fired power capacity was cancelled than commissioned since 2017, research showed on Wednesday, highlighting the obstacles facing the industry as countries work to reduce carbon emissions.
The Centre for Research on Energy and Clean Air (CREA) said that the amount of capacity shelved or cancelled since 2017 was 4.5 times higher than the amount that went into construction over the period.
Coal-fired power is one of the biggest sources of climate-warming carbon dioxide emissions, and the wave of cancellations also reflects rising concerns about the sector’s long-term economic competitiveness.
Since 2016, the top 10 banks involved in global coal financing were all Chinese, and around 12% of all coal plants operating outside of China can be linked to Chinese banks, utilities, equipment manufacturers and construction firms, CREA said.
But although 80 gigawatts of China-backed capacity is still in the pipeline, many of the projects could face further setbacks as public opposition rises and financing becomes more difficult, it added.
China is currently drawing up policies that it says will allow it to bring greenhouse gas emissions to a peak by 2030 and to become carbon-neutral by 2060.
But it was responsible for more than half the world’s coal-fired power generation last year, and it will not start to cut coal consumption until 2026, President Xi Jinping said in April.
Environmental groups have called on China to stop financing coal-fired power entirely and to use the funds to invest in cleaner forms of energy, and there are already signs that it is cutting back on coal investments both at home and abroad.
Following rule changes implemented by the central bank earlier this year, “clean coal” is no longer eligible for green financing.
Industrial and Commercial Bank of China, the world’s biggest bank by assets and a major source of global coal financing, is also drawing up a “road map” to pull out of the sector, its chief economist Zhou Yueqiu said at the end of May.
(Reporting by David Stanway; Editing by Kenneth Maxwell)
Bank of Montreal CEO sees growth in U.S. share of earnings
Bank of Montreal expects its earnings contribution from the U.S. to keep growing, even without any mergers and acquisitions, driven by a much smaller market share than at home and nearly C$1 trillion ($823.38 billion) of assets, Chief Executive Officer Darryl White said on Monday.
“We do think we have plenty of scale,” and the ability to compete with both banks of similar as well as smaller size, White said at a Morgan Stanley conference, adding that the bank’s U.S. market share is between 1% and 5% based on the business line, versus 10% to 35% in Canada. “And we do it off the scale of our global balance sheet of C$950 billion.”
($1 = 1.2145 Canadian dollars)
(Reporting by Nichola Saminather; Editing by Leslie Adler)
GameStop falls 27% on potential share sale
Shares of GameStop Corp lost more than a quarter of their value on Thursday and other so-called meme stocks also declined in a sell-off that hit a broad range of names favored by retail investors.
The video game retailer’s shares closed down 27.16% at $220.39, their biggest one-day percentage loss in 11 weeks. The drop came a day after GameStop said in a quarterly report that it may sell up to 5 million new shares, sparking concerns of potential dilution for existing shareholders.
“The threat of dilution from the five million-share sale is the dagger in the hearts of GameStop shareholders,” said Jake Dollarhide, chief executive officer of Longbow Asset Management. “The meme trade is not working today, so logic for at least one day has returned.”
Soaring rallies in the shares of GameStop and AMC Entertainment Holdings over the past month have helped reinvigorate the meme stock frenzy that began earlier this year and fueled big moves in a fresh crop of names popular with investors on forums such as Reddit’s WallStreetBets.
Many of those names traded lower on Thursday, with shares of Clover Health Investments Corp down 15.2%, burger chain Wendy’s falling 3.1% and prison operator Geo Group Inc, one of the more recently minted meme stocks, down nearly 20% after surging more than 38% on Wednesday. AMC shares were off more than 13%.
Worries that other companies could leverage recent stock price gains by announcing share sales may be rippling out to the broader meme stock universe, said Jack Ablin, chief investment officer at Cresset Capital.
AMC last week took advantage of a 400% surge in its share price since mid-May to announce a pair of stock offerings.
“It appears that other companies, like GameStop, are hoping to follow AMC’s lead by issuing shares and otherwise profit from the meme stocks run-up,” Ablin said. “Investors are taking a dim view of that strategy.”
Wedbush Securities on Thursday raised its price target on GameStop to $50, from $39. GameStop will likely sell all 5 million new shares but that amount only represents a “modest” dilution of 7%, Wedbush analysts wrote.
GameStop on Wednesday reported stronger-than-expected earnings, and named the former head of Amazon.com Inc’s Australian business as its chief executive officer.
GameStop’s shares rallied more than 1,600% in January when a surge of buying forced bearish investors to unwind their bets in a phenomenon known as a short squeeze.
The company on Wednesday said the U.S. Securities and Exchange Commission had requested documents and information related to an investigation into that trading.
In the past two weeks, the so-called “meme stocks” have received $1.27 billion of retail inflows, Vanda Research said on Wednesday, matching their January peak.
(Reporting by Aaron Saldanha and Sagarika Jaisinghani in Bengaluru and Sinead Carew in New York; Additional reporting by Ira Iosebashvili; Editing by Sriraj Kalluvila, Shounak Dasgupta, Jonathan Oatis and Nick Zieminski)
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