In this edition:
- Inflation rises to 3.2% in May
- Hovercraft service from Niagara to Toronto expects to get terminal permit by year’s end
- Niagara-on-the-Lake must raise taxes to cover its infrastructure deficit, says report
- Metrolinx writes off more than $500M in upgrades, cuts GO expansion spending
- Ontario invests $6 million in young entrepreneurs
- Canadian transit ridership falls for twelfth straight month
- Building construction investment rises in April
- Canada launches nuclear energy strategy
- Convenience retailers push back on proposed Bitcoin ATM ban
- Traffic flows through Hormuz, but escalating threats from both sides are causing ‘strait jitters’
- Focus on Technology
Did you know you can get the GNCC’s Daily Update emailed to you? Click here to sign up.
Picture credit: Monster Ztudio / Adobe Stock
Inflation rises to 3.2% in May
Canada’s annual inflation rate rose to 3.2% in May, up from 2.8% in April, as gasoline prices surged 33.2% year-over-year amid supply uncertainty tied to the closure of the Strait of Hormuz. Grocery inflation also continued to squeeze households, with food purchased from stores up 4.3% and fresh vegetables rising 9.0%, while shelter inflation eased slightly to 1.7% and rent growth slowed to its lowest pace since January 2022. The acceleration keeps cost pressures front and centre for consumers and employers alike, particularly as transportation and food costs feed through into household budgets and business expenses.
Photo credit: Hoverlink Ontario
Hovercraft service from Niagara to Toronto expects to get terminal permit by year’s end
The long-promised 30-minute hovercraft ride between Niagara and Toronto has a new checkpoint: authorization to build a terminal by the end of this year.
Hoverlink president Erika Potrz told The Lake Report that final permitting for the company’s 18-acre South Shore waterfront terminal on Lake Ontario is expected to be completed in late 2026. The company still hopes to launch the service in 2028.
Picture credit: Town of Niagara-on-the-Lake
Niagara-on-the-Lake must raise taxes to cover its infrastructure deficit, says report
Niagara-on-the-Lake councillors have endorsed a 1.5 per cent increase to residents’ taxes each year over the next 20 years to cover the town’s growing infrastructure deficit.
And while the hike is not a final decision by councillors, staff are recommending the town spend more on roads, sewers and culverts to improve public safety and prevent the decline of the municipality’s infrastructure.
Photo credit: Reimar / Adobe Stock
Metrolinx writes off more than $500M in upgrades, cuts GO expansion spending
Facing project overruns and more than half a billion dollars in writeoffs, Metrolinx is spending far less than planned on expanding GO train service — a massive program that is now facing “uncertainty,” the agency says.
The transit agency came in eight per cent over budget in the 2025-26 fiscal year, mostly due to overspending on the Eglinton Crosstown and Finch West LRTs and Yonge North and Scarborough subway extensions by almost $1 billion combined, according to a draft of its annual report released on Friday.
Metrolinx scaled back GO Expansion to a “minimum viable product” last year in the midst of its acrimonious split with Deutsche Bahn, focusing only on the Lakeshore East and West lines for now.
Picture credit: diegograndi / Adobe Stock
Ontario invests $6 million in young entrepreneurs
Ontario is investing an additional $6 million in Futurpreneur to help nearly 1,000 entrepreneurs aged 18 to 39 access financing, mentorship, networking and business planning supports. Futurpreneur offers collateral-free loans of up to $75,000, including matched financing from the Business Development Bank of Canada, along with two years of mentorship and resources.
The province says the investment will support more than 3,800 future jobs, building on Futurpreneur’s work with more than 1,700 Ontario businesses and over 7,300 jobs created to date.
Picture credit: Frédéric Prochasson / Adobe Stock
Canadian transit ridership falls for twelfth straight month
Urban transit ridership in Canada fell again in April, with 128.7 million passenger trips recorded, down 3.9% from the same month in 2025 and marking the twelfth consecutive year-over-year decline. Ridership also slipped 3.2% from March, in line with the usual seasonal shift as some commuters and students move to walking and biking. Despite fewer trips, operating revenue excluding subsidies rose 2.9% year-over-year to $338.3 million.
Picture credit: visoot / Adobe Stock
Building construction investment rises in April
Investment in building construction rose 2.3% to $23.6 billion in April, with residential construction leading the increase. Residential investment climbed 3.1% to $16.5 billion, driven by a 4.0% gain in multi-unit construction and a 2.0% increase in single-family homes, while non-residential investment edged up 0.7% to $7.1 billion.
Industrial construction posted the strongest non-residential growth, up 3.5% to $1.4 billion, with Ontario among the main contributors.
Picture credit: Ontario Power Generation
Canada launches nuclear energy strategy
The federal government has launched a new Nuclear Energy Strategy aimed at doubling Canada’s nuclear workforce by 2050, attracting billions in private investment, and expanding nuclear generation, uranium development and nuclear innovation. Natural Resources Canada says the sector already supports 90,000 direct and indirect jobs, contributes $22 billion annually to the economy, and provides about 13% of Canada’s electricity, largely through 17 CANDU reactors in Ontario and New Brunswick. The strategy also highlights support for projects such as the Darlington New Nuclear Project, expected to be the first small modular reactor deployment in the G7, as Canada looks to meet rising demand for reliable, non-emitting electricity.
Photo credit: Tomasz Zajda / Adobe Stock
Convenience retailers push back on proposed Bitcoin ATM ban
Convenience store operators and industry groups are urging Ottawa to regulate Bitcoin ATMs rather than ban them, arguing the machines provide steady rental income for small retailers while serving customers who use them legally. CCentral reports there are roughly 3,900 Bitcoin ATMs in Canada, with host locations receiving about $15 million a year in rent, while Canadian Anti-Fraud Centre data cited by industry players put crypto ATM losses at $14.2 million in 2024, about 2% of total reported fraud losses. Industry representatives said stronger licensing, fraud controls, transaction limits and enforcement against non-compliant operators would better protect consumers without removing a revenue source for independent stores.
Picture credit: Yellow Boat / Adobe Stock
Traffic flows through Hormuz, but escalating threats from both sides are causing ‘strait jitters’
The situation in the Strait of Hormuz remains precarious for shippers — traffic is still moving at far below pre-war levels despite a clear rebound in recent days — as companies assess threats and counter-threats between the US and Iran over the weekend.
Independent traffic service MarineTraffic reported Monday that 71 confirmed transits were recorded over the previous three days among ships that left their transponders on (a signal “pointing to improving confidence”). Before the war began, 100 ships often made passage in a single day.
Focus on Technology
AI is knocking: Canada’s next productivity story
Michelle Alexopoulos, Ottawa Economics Association/Bank of Canada
AI may seem like a relatively new trend, but the core technology has been percolating—and steadily improving—for about 75 years.1 What’s changed is that recent advances have made AI far more powerful and accessible. Based on its current and promised applications, AI represents a significant technological advance that has the potential to boost productivity and raise living standards.
As AI continues to improve and its adoption spreads, it could permanently change how the Canadian economy works. By lowering costs for businesses and improving efficiencies, AI could support higher wages, reduce prices for consumers and spur new investment.
There’s also the question of what AI will mean for jobs. When economists look back at past transformative innovations, they find that while the transition period may have been disruptive for workers, widespread adoption did not lead to net job losses. But some worry that this time will be different.
Through the Daily Updates, the GNCC aims to deliver important business news in a timely manner. We disseminate all news and information we feel will be important to businesses. Inclusion in the Daily Update is not an endorsement by the GNCC.
