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Industry minister echoes Shopify calls to boost ambition in Canada

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TORONTO – Canada’s industry minister has thrown his support behind a call from one of Shopify Inc.’s leaders for the country to get more ambitious.

“I could not agree more because for 10 years, I’ve always finished my speeches by saying, ‘Let’s seize the moment. Let’s be ambitious,'” François-Philippe Champagne said Thursday.

He was speaking at the Elevate tech conference in Toronto, where the tech community has been gathering since Tuesday to discuss trends in the industry and beyond.

Among the buzziest talks was one from Shopify president Harley Finkelstein, who told the audience on opening night that he had noted a lack of ambition in Canada that he likened to a “600-pound beaver in the room.”

Adding ambition to the Canadian psyche is “unequivocally necessary,” so the country doesn’t become a nation of branch plants and instead fosters massive companies at home, the leader of the Ottawa-based e-commerce software giant said.

He added that the current lack of ambition had left Canadian companies with a reputation for being acquired, while U.S. businesses are known for being the dominant “acquirees.”

“When someone calls me and says, ‘I’m thinking of selling my company to Google,’ my usual answer is, ‘Have you ever thought about one day you buy Google?'” Finkelstein said.

His remarks set off chatter across much of Canada’s tech ecosystem, with many backing his calls for the country to get bolder

But some disagreed.

Laura Lenz, a partner at the venture capital arm of pension plan Ontario Municipal Employees Retirement System, called Finkelstein’s narrative “tired” and lamented that it places “the blame of sluggish productivity squarely on the shoulders of founders and management teams working as hard as they ever have.”

“Maybe it’s time to take a broader view of the problem and the lack of infrastructure supports to keep these companies here at home,” she wrote on X, formerly known as Twitter.

She said the country has to address the lack of tax incentives, willingness to use and purchase Canadian software, and funding for companies, especially in their infancy or “seed stage.”

Abdullah Snobar, the executive director of the DMZ tech hub in Toronto, agreed that “Canada is failing to provide the right conditions of startups to thrive.”

“High costs of living, transportation, infrastructure and transportation — these things are making it next to impossible for entrepreneurs to succeed here,” he wrote on X.

However, on Thursday, Champagne argued the country is well-resourced and that talent is teeming in Canada.

He said Canada has the highest number of AI startups in the world, including Toronto firm Cohere, and when it comes to quantum computing, everyone in the global auto sector considers another one of the city’s companies, Xanadu, “the rock star.”

To be more ambitious, Champagne said the country has to “be more. Be more of everything.”

“I just wish we would all be bragger-in-chief,” he said. “There’s something in our DNA that we need to change somehow, to just be talking more about what we do.”

Aside from ambition, Champagne was questioned about the country’s approach to AI.

Canada is still working on an Artificial Intelligence and Data Act meant to guide how companies operating in the country will design, develop and deploy the technology.

It isn’t expected to come into effect until at least next year, so Champagne has been using a voluntary code of conduct as a stopgap.

The code asks signatories to build risk mitigation measures into AI tools, use adversarial testing to uncover vulnerabilities in such systems and keep track of any harms the technology causes.

Thirty companies, including BlackBerry, Cohere, Salesforce and CGI, have signed the code, but others including Shopify have railed against it, complaining it could hold innovators back.

Asked by moderator and tech personality Amber Mac whether more organizations could have signed the document in the one-year since it was released, Champagne joked he had a copy in his back pocket for any interested companies to sign.

“We may not have a law in the book as of yet but at least we have something,” he said.

“Honestly, the companies that have signed tell me that this has been beneficial.”

This report by The Canadian Press was first published Oct. 3, 2024.

Companies in this story: (TSX:SHOP)

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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.

“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.

“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”

Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.

On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.

If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.

These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.

If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.

However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.

He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.

“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.

Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.

The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.

Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.

Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.

Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.

Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.

Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”

In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.

“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:SHOP)

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.

The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.

The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.

RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.

The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.

RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:REI.UN)

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