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Nifty fifty

It’s getting hot in here…and by ‘it’ we mean inflation

Srivindhya Kolluru
June 06, 2022

Good morning. If you’ve been feeling a bit meh about work and life recently, you’re not alone. Deloitte’s 2022 Gen Z and Millennial Survey found people in these generations have a lot on their minds: the rising cost of living, climate change, geopolitical conflicts, the ongoing pandemic and wealth inequality.

…That’s a lot to be preoccupied with.

In this edition:

🏦 BoC’s mega rate hike☕️ Timmies lands in hot coffee water 📺 Netflix’s password-sharing dilemma

— Vindhya Kolluru, Editor

* Market data as of 8:00 pm ET Sunday, June 5.

FINANCE

The lowdown on Canada's rising interest rates

Credit: GIPHY

"I mean, it's one interest rate hike, Michael. What could it cost? 50 basis points?"

Actually, yes.

This past week, the Bank of Canada (BoC) lifted its key interest rate by 50 basis points (that’s finance-speak for 0.5%) from 1% to 1.5% to control decades-high inflation.

Why another hike? As you have probably noticed, everything — from restaurant menu prices to grocery staples to clothes — is more expensive. Inflation hit 6.8% in April, which is more than twice what we’d consider normal. That said, we’ll count ourselves lucky that we aren’t in Turkey, where inflation is 73.5% (yes, you read that right).

On top of existing supply chain snarls and labour shortages, the war in Ukraine has thrown our markets in for yet another loop by contributing to rising food and energy prices — all of that combined has put Canada’s economy under enormous pressure.

The BoC wants to help stabilize our economy by taming inflation, and it does so by raising its benchmark interest rate.

Elsewhere in the 🌎: Canada isn’t unique in the challenges we’re up against. Central banks all over the world are hiking their rates to address inflation, with the U.S. also announcing a 0.5% rate hike — the nation’s biggest increase in 22 years — just last month. For more on how interest rates around the world stack up, check out this visual.

How will the rate hike impact me? The downside of higher interest rates is that it will lead to higher mortgage payments for homeowners with variable rate loans and in extreme cases, could even force some people to default on their loans.

What’s next? The BoC is hinting that its overnight interest rate will climb even higher — possibly to 3%, which is higher than the 2% predicted last month, during its next policy decision meeting in July. For as long as we see the prices of stuff go up, we can probably expect the BoC will continue to increase its key interest rate.

— Ruhee Ismail-Teja

On our radar

Hannah Grey, a venture capital (VC) firm run by Kate Beardsley and Jessica Peltz-Zatulove (and named after their respective daughters), raised an inaugural US$52 million fund to support start-ups that are redefining everyday experiences.
Camille Hunt spoke to Vancouver Tech Journal on the origins of her company, First Course Foods, which creates ready-to-eat baby food that’s tasty, innovative and pleases even the pickiest of toddlers.
Montréal-based VC firm Brightspark Ventures promoted Éléonore Jarry-Ferron to partner. Jarry-Ferron previously worked at Ernst & Young, and as a university student, she co-founded Front Row Ventures, Canada’s first student-run VC firm.
After 14 years in the role, Sheryl Sandberg has stepped down as the Chief Operating Officer of Facebook parent company Meta — she will continue to serve on the tech giant’s board of directors. Sandberg has been credited with transforming Facebook into the advertising behemoth it is today.

FOOD

Timmies is watching your every step

Credit: Conor Samuel / Unsplash

Canada’s favourite coffee chain is in hot coffee water after an investigation revealed that the Tim Hortons mobile app was collecting extensive data from users without their permission. Yikes.

A joint investigation between the Office of the Privacy Commissioner of Canada (OPC) and government agencies in B.C., Quebec and Alberta, has been underway over the past two years. This all began when a story by the Financial Post revealed Tim Hortons could track users’ location data — even when the app was not open.

Why it’s a big deal: Geolocation data is valuable information to companies as it paints a detailed picture of who their customers are, including things such as where they live, work, shop, travel and visit. Once it’s analyzed, personal data can be used to inform advertising, promotion and product strategies all the while unbeknownst to the user.

We’ve all been guilty of accepting terms and conditions without fully understanding what we are signing up for. In many cases, the vague or confusing language used in these agreements may provide leeway for more data to be collected.

Double-double tracking: This report, however, found that the contractual language that Tim Hortons used wouldn’t “appear to constitute adequate protection” of its users’ personal information. As a result, Tim Hortons agreed to implement recommendations that the coffee chain:

Delete any remaining location data and direct third-party service providers to do the same;
Establish and maintain a privacy management program for apps; and
Report on measures it has taken to comply with the recommendations.

The bottom line: Technology surveillance and data privacy will continue to be a contentious issue and one that Canadians will need to discuss to ensure our privacy is protected against corporate interests.

— Sabrina Dotsch

ENTERTAINMENT

Netflix is no longer chill with password-sharing

Credit: Venti Views / Unsplash

We have good news for those of you still sharing your Netflix password with your sister who lives 1,000 km away or even your sister’s friend’s ex from four years ago.

Netflix’s pilot program to crack down on users sharing their accounts with people outside of their household isn’t going according to plan, at least in Peru.

The backstory: Even though it's technically not allowed, Netflix has generally been chill about letting subscribers share their Netflix accounts with people outside of their immediate household. At one point, CEO Reed Hastings even said password-sharing is a good thing, noting that it would introduce more people to Netflix and encourage them to subscribe…but alas, that hasn’t been the case.

Netflix saw its first drop in total subscribers in over a decade in the first quarter of 2022 and partly attributed the loss to password-sharing.
The estimated $2 billion Netflix loses from password-sharing, combined with the astronomical budget Netflix sets aside for producing content (I mean, just look at the new season of Stranger Things), has the streaming giant scrambling to recoup its losses and revive its stock price, which has tumbled over 40% since March.

Netflix has been testing a paywall to claw back some of the money it loses to password-sharing by charging a ~US$2 fee to users in Peru, Chile and Costa Rica who share their accounts with people outside of their household.

But: According to a report from Rest of World, subscribers in Peru who were part of Netflix’s test said the streaming giant’s loose definition of “household” was confusing and the level of enforcement differed from one user to another.

Netflix doesn’t have plans to expand the password-sharing test to Canada right now, but users have nonetheless been worried.

Too little too late: That’s what one analyst had to say about Netflix’s efforts to restrict password-sharing, adding that people who don’t want to fork out a fee could cancel their subscriptions altogether and jump ship to a cheaper streaming service.

— Vindhya Kolluru