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In today's Morning Brief, some economists say recent government subsidies — which have ranged from $1.7 million for a Brampton, Ont., pasta plant, to billions in subsidies for EV plants — make little economic sense.

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Ottawa is spending $1.7M for 10 new jobs at a pasta plant. Are these corporate subsidies worth it?

When the federal government said earlier this week its investment of $1.7 million in a Brampton, Ont., pasta plant would create 10 jobs, some questioned whether that taxpayer money was being put to good use.

One economics professor tweeted he was "legit astonished" by the investment in Italpasta.

"Do they not understand just how insane this is? That spending north of $170k for *one job* is an embarrassment, not an achievement?" wrote Stephen Gordon of Laval University.

And that was just a fraction of the billions in subsidies that were announced recently for the creation of electric vehicle-related plants in Ontario.

While some economists say they understand the political motives for such corporate government subsidies, they say they make little economic sense.

  • Honda to invest $15B to build 4 new EV plants in Ontario
  • Federal, Ontario governments will break even in 20 years on $28.2B EV plant subsidies: report

"There is really no underlying economic rationale," said Robert Gillezeau, assistant professor of economics at the University of Toronto's Rotman School of Management. "I think those spends are more about politics than they are about economic development."

"You're introducing an economic inefficiency to the market."

The $1.7-million subsidy for Italpasta Ltd., billed as the largest pasta manufacturer in Canada will help it "increase production to keep up with growing demand," according to Filomena Tassi, the minister responsible for the Federal Economic Development Agency for Southern Ontario.

"Investments like these are making a difference in our economy & helping businesses grow," Tassi tweeted.

Her press secretary says the money is a 100 per cent repayable loan that Italpasta will use to buy new equipment.

"[That] allows them to triple the production of their pasta products, all while reducing their energy consumption and carbon footprint," Edward Hutchinson said in an email to CBC News.Read the full story here.

Edmonton Oilers advance to Western Conference final

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(Darryl Dyck/The Canadian Press)

The Edmonton Oilers held off a late comeback attempt by the Vancouver Canucks to win Game 7 of their Stanley Cup playoff series. The Oilers got the win by a score of 3-2, thanks to second period goals by Cody Ceci, Zach Hyman and Ryan Nugent-Hopkins, who is pictured above. Conor Garland and Filip Hronek scored for Vancouver in the third period but it wasn't enough. Edmonton will now play the Dallas Stars in the Western Conference final starting Thursday in Texas.Read the full story here.

In brief

In a new report, a think-tank within Employment and Social Development Canada cites 35 "plausible" global disruptions that could reshape Canada and the world in the near future.The Policy Horizons Canada (PHC) panel drafted the list and then asked more than 500 stakeholders within and outside government to suggest which ones were more likely, when they might happen and how one might trigger others. The authors of the report point out that the list is an exploration of theoretical — not guaranteed — threats. They say that even "seemingly distant or improbable" calamities can become reality and thinking about them helps governments create "robust and resilient policies." Leading the report's top ten list — those threats that could have the greatest impacts and are most likely to happen — is the threat to truth. PHC's report says that in as little as three years, the world's "information ecosystem" could be flooded with misinformation and disinformation created by both people and artificial intelligence.Read the full story here.

New home construction in Ontario has slowed to a pace not seen since 2018, putting Premier Doug Ford's government further off track from hitting its housing targets.Housing starts in April in urban areas of Ontario were down a whopping 37 per cent from the same month last year, according to the latest figures reported by the Canada Mortgage and Housing Corporation (CMHC). Economists see no signs of the slowdown reversing in the months to come, creating the potential for a grim 2024 when it comes to new home construction. "Over the rest of the year, we expect [housing starts] to continue to trend down in the province and particularly in the GTA," said Anthony Passarelli, CMHC's lead economist for southern Ontario. It's a problem not unique to Ontario. TD Economics predicts that housing starts nationally "will continue to decline through the remainder of this year, reflecting more recent weakness in pre-sale activity in key markets like Toronto, elevated construction costs and high interest rates."Read the full story here.

You don't have to go far back — 2012, or four elections ago — to find a time when the Alberta NDP hardly registered in Calgary.Sure, they ran candidates, but none of them seriously door-knocked or campaigned. They averaged less than five per cent of the votes in Alberta's largest city in 2012. It had been an Edmonton-centric party for decades, because that's where its leaders resided, and that was the only place in Alberta where it actually won seats. Times have changed. Calgary has changed. New Democrats certainly have changed, especially as they look beyond Rachel Notley for a new leader. The Alberta NDP is now a Calgary-dominated party. Nearly half of the party's membership ahead of the June leadership vote is Calgarian, according to a riding-by-riding breakdown of the party's 85,144 members. That compares with only one-quarter of members from Edmonton, while the rest hail outside the two major cities.There was buzz among party insiders that the party's centre of gravity would shift, particularly with the star candidacy of former Calgary mayor Naheed Nenshi, who joined the opposition party this spring to seek the leadership.Read the full analysis here.

Leaders of Israel and the Palestinian militant group Hamas may soon be the subjects of international arrest warrants over allegations they are responsible for war crimes and crimes against humanity.On Monday, the top prosecutor for the International Criminal Court (ICC), Karim Khan, sought warrants for Israeli Prime Minister Benjamin Netanyahu and Defence Minister Yoav Gallant, accusing them of multiple offences committed since Israel declared war against Hamas in response to the Oct. 7 militant attacks. Khan also applied for warrants for Hamas leader Yahya Sinwar, Mohammed Diab Ibrahim al-Masri (also known as Mohammed Deif), the commander-in-chief of Hamas's military wing, and Ismail Haniyeh, head of the Hamas political bureau, for crimes committed in Israel and Gaza. The possibility of the ICC prosecuting any of these individuals follows a separate case before the International Court of Justice (ICJ) brought forward by South Africa accusing Israel of committing genocide in Gaza. The ICC and the ICJ, both of which are based in The Hague, investigate serious crimes but serve different purposes and have different outcomes.Read here for more about the ICC and the ICJ — and how they operate.

WATCH|Karim Khan discusses the decision to apply for warrants for Israeli,Hamas leaders:

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ICC prosecutor says no one 'above the law' after seeking warrants for Israeli and Hamas leaders

14 days ago

Duration 3:21

Now here's some good news to start your Tuesday:Manitoba farmer Isaiah Hofer faced a conundrum when a strong growing season left him with a surplus of spuds. So he called up the Farmlink Project to give away millions of pounds of potatoes.Read the full story here.

First Person:I was a fool who fell for a scam. But at least I can laugh about it now

Kleo Mitsis writes that after a lifetime of saving frugally, he jumped on a chance to buy power tools from a stranger on the internet. After the seller backed out and he found himself filing a police report, he has advice for others on how not to fall for a scam.Read his column here.

Front Burner:Lessons for Canada from Europe's housing fails

Europe is in the grips of its own housing affordability crisis with some striking similarities to what we've seen in Canada.

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Front Burner30:43Lessons for Canada from Europe’s housing fails

Today in history: May 21

1923:Prohibition takes effect in Prince Edward Island.

1932:Amelia Earhart becomes the first woman to fly solo across the Atlantic Ocean. She landed in Northern Ireland about 15 hours after leaving Harbour Grace, N.L.

1953:A tornado hits Sarnia, Ont., killing five people, injuring 48. The twister struck the city's downtown section, causing damage to approximately 100 buildings and about 150 homes.

1990:Federal Environment Minister Lucien Bouchard praises the cause of Quebec separation and quits the federal cabinet and Progressive Conservative caucus. He later formed the Bloc Québécois, but left to lead the Parti Québécois and serve as premier of Quebec from 1996-2001.

With files from The Canadian Press, The Associated Press and Reuters

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