Canadian Economic News, August 2021 edition

COVID-19 timeline

• On August 5th, the Government of the Northwest Territories announced it had extended the territory-wide Public Health Emergency until August 17th. On August 23rd, the Public Health Emergency was extended until August 31st. On August 31st, the Public Health Emergency was extended until September 14th.
• On August 5th, the Government of Nunavut announced it had extended the territory's public health emergency until August 19th. On August 20th, the public health emergency was extended until September 2nd.
• On August 6th, the Government of Nova Scotia announced it was renewing the state of emergency, effective August 8th, until August 22nd. On August 20th, the Government renewed the state of emergency until September 5th.
• On August 24th, the Government of Manitoba announced it was extending the state of emergency for a period of 30 days.
• On August 25th, the Government of the Yukon announced that the state of emergency declared on March 27, 2020, in response to COVID-19 would end effective midnight.

Selected COVID-19 responses

• The Government of Newfoundland and Labrador announced on July 30th that the province would be moving to step two of the reopening plan on August 1st, and that:
  • Outdoor gatherings may increase to 500 people;
  • Indoor gatherings may increase to 350 people with physical distancing;
  • No capacity restrictions at retail stores, restaurants, and lounges;
  • Indoor and outdoor sports tournaments permitted with COVID-19 protocols; and
  • Recreational and arts facilities follow the limits for formal gatherings.
• The Government of Manitoba announced on August 3rd that it would implement new public health orders on August 7th, one month earlier than forecast, and that the following sectors would be allowed to open without restrictions:
  • Indoor and outdoor gatherings at private residences;
  • Gyms and fitness centres;
  • Libraries;
  • Personal services such as hair and nail salons;
  • Day camps; and
  • Retail businesses, markets, garden centres, and malls.
• The Government also said that other sectors would open with limited restrictions including:
  • Restaurants and bars will no longer need to restrict the size or space between tables and dining will not be restricted to households or vaccinated individuals;
  • Museums, galleries, and movie theatres will remain limited to 50% capacity but will no longer be restricted to vaccinated individuals;
  • Casinos and bingo halls, professional sporting events, horse and auto racing, and concert halls may now open to 100% capacity but will continue to be limited to vaccinated individuals;
  • Indoor and outdoor sports and recreation will fully reopen with limits only on spectator capacity;
  • Overnight camps will be permitted with limits on camper cohorts; and
  • Remote working will no longer be required or recommended by public health.
• On August 24th, the Government announced that new public health orders will require all designated provincial public service workers who have ongoing contact with vulnerable populations, especially children, to be fully immunized for COVID-19 by October 31st or undergo regular testing.
• On August 27th, the Government announced it had developed new requirements for people to be fully immunized to participate in certain events and activities. The Government said these requirements would come into effect by public health order on September 3rd for all health regions and would include:
  • Indoor and outdoor ticketed sporting events and concerts;
  • Indoor theatre/dance/symphony events;
  • Restaurants (indoor and patio dining);
  • Nightclubs and all other licensed premises;
  • Casinos, bingo halls, and VLT lounges;
  • Movie theatres;
  • Fitness centres, gyms, and indoor sporting and recreational facilities (excluding youth recreational sport); and
  • Organized indoor group recreational classes and activities, and indoor recreational businesses.
• The Government of Nunavut on August 3rd released Nunavut's Path: Living with COVID-19, which outlines the minimum public health measures required to manage existing risk, identifies public health measures according to three separate, community-specific vaccination levels, and identifies how to declare future outbreaks.
• On August 17th, the Government announced it had suspended Nunavut's Common Travel Area with the Northwest Territories (N.W.T.) following the increased risk of COVID-19 in the N.W.T.
• The Government of Yukon announced on August 3rd that effective August 4th, it would lift some public health restrictions, including:
  • Self-isolation after domestic travel will no longer be required for vaccinated or unvaccinated people; and
  • Bars and restaurants will be able to return to full capacity for bar and countertop service.
• On August 20th, the Government released Forging Ahead: The Yukon's Continuing Response to COVID-19, which included details about how the Yukon would begin to move forward without widespread public health measures.
• The Government of Canada announced on August 13th its intent to require vaccination as early as the end of September across the federal public service and no later than the end of October for employees in the federally regulated air, rail, and marine transportation sectors. The Government said the vaccination requirement will also extend to certain travellers, including all commercial air travellers, passengers on interprovincial trains, and passengers on large marine vessels with overnight accommodations, such as cruise ships.
• The Government of Ontario announced on August 17th it was making COVID-19 vaccination policies mandatory in high-risk settings, pausing the province's exit from the Roadmap to Reopen, and providing third doses of the COVID-19 vaccine to vulnerable populations.
• The Government of New Brunswick announced on August 19th it had agreed to a mandatory vaccination or testing policy for all provincial government employees and that, once in place, will require all provincial government employees to be fully vaccinated or submit to regular testing until they have received both vaccine doses. The Government said that vaccination will also be a condition of employment for new hires.
• The Government of British Columbia announced on August 20th that it was introducing new public health orders covering the entire Interior Health region to manage COVID-19 activity and that effective midnight:
  • Low-intensity indoor group exercise is permitted to a maximum 10 people per class; high-intensity indoor group exercise is not permitted.
• Effective August 23rd:
  • Gatherings in vacation rentals are limited to five guests;
  • Indoor personal gatherings are limited to five guests;
  • Outdoor personal gatherings (e.g. birthday parties, backyard BBQs, block parties) are limited to no more than 50 people; and
  • Organized indoor gatherings (e.g. weddings, funerals, seated events) are limited to 50 people, and outdoor gatherings are limited to 100 people.
• The Government said these measures will remain in place until the end of September.
• On August 23rd, the Government announced that proof of vaccination will be required in British Columbia for people attending certain social and recreational settings and events, including indoor ticketed sporting events, indoor and patio dining in restaurants, fitness centres, casinos, and indoor organized events like conferences and weddings. The Government said that as of September 13th, one dose of vaccine will be required for entry to these settings and that by October 24th, entry will require people to be fully vaccinated.
• The Government of the United States announced on August 20th it was extending restrictions on non-essential travel at land and ferry crossings with Canada and Mexico through September 21st.
• The Government of Nova Scotia announced on August 23rd it was targeting September 15th as the start of the next phase of its reopening plan and that at that time the only restrictions that will remain in place for the general population within Nova Scotia are those related to the management of COVID-19 cases. The Government also said it was leaving border policies in place through the fall, including isolation based on vaccination status and testing, and that effective August 25th, the border policy will also apply to people coming from New Brunswick due to a rise of COVID-19 activity in that province.
• The Government of Quebec on August 24th confirmed plans to introduce a vaccine passport beginning September 1st. The Government said use of the passport will be limited to activities deemed non-essential and which take place in places where the risk of transmission between individuals is high, including events and festivals, performance halls and halls where sporting events take place, casinos, cinemas, training halls, team sports, bars, restaurants, and certain extracurricular activities.

Wildfires

• On August 3rd, the Government of British Columbia announced it had extended the provincial state of emergency until August 17th to support the ongoing co-ordinated response to the wildfire situation and ensure public safety. On August 17th, the Government extended the state of emergency until August 31st. On August 31st, the Government extended the state of emergency until September 14th.

Resources

• Calgary-based Imperial Oil Limited announced it was moving forward with plans to construct a renewable diesel complex at its Strathcona refinery near Edmonton. Imperial said the new complex is expected to produce more than 1 billion litres of renewable diesel from locally sourced and grown feedstocks and that a final investment decision will be based on several factors, including government support and approvals, market conditions, and economic competitiveness.
• Brazil-based Vale S.A. announced that a new five-year collective bargaining agreement with United Steelworkers (USW) Local 6500 in Sudbury was ratified, ending the labour disruption that began June 1, 2021. Vale said employees would return to work the week of August 9th, with production ramping up in the weeks ahead.
• Australia-based BHP announced it had approved $7.5 billion in capital expenditure for the Jansen Stage 1 potash project in Saskatchewan. BHP said Jansen is expected to produce approximately 4.35 million tonnes of potash per year, with first ore targeted in 2027.
• Vancouver-based Conifex Timber Inc. announced it would temporarily curtail lumber production at its Mackenzie, British Columbia, sawmill for two weeks commencing August 23, 2021.

Manufacturing

• Massachusetts-based Moderna, Inc. and the Government of Canada announced a Memorandum of Understanding to build a messenger RNA (mRNA) vaccine manufacturing facility in Canada. The parties said the collaboration aims to provide Canadians with access to a domestically manufactured portfolio of mRNA vaccines against respiratory viruses, including COVID-19, seasonal influenza, respiratory syncytial virus (RSV), and potential other vaccines.
• Unifor announced on July 31st that Local 112 and 673 members at Bombardier Aviation's Downsview plant in Toronto had voted to ratify new three-year collective agreements, which cover approximately 1,500 Bombardier Aviation workers.

Finance and insurance

• Toronto-based Brookfield Asset Management Reinsurance Partners Ltd. and American National Group, Inc. of Texas announced they had entered into a definitive merger agreement whereby Brookfield Reinsurance will acquire American National in an all-cash transaction valued at approximately USD $5.1 billion. The companies said the merger is expected to close in the first half of 2022, subject to certain customary closing conditions, including antitrust clearance and receipt of insurance regulatory approvals.
• Toronto-based WPT Industrial Real Estate Investment Trust (WPT) and Blackstone Real Estate Income Trust, Inc. (BREIT) of New York announced that WPT had entered into an arrangement agreement under which BREIT will acquire all of the outstanding units of WPT in an all-cash transaction valued at USD $3.1 billion including the assumption of debt. The companies said the transaction is expected to close in the fourth quarter of 2021, subject to customary conditions, including WPT shareholder approval.
• Toronto-based ECN Capital Corp. announced it had entered into a definitive agreement with Truist Bank of North Carolina to sell all of the issued and outstanding equity interests in each of Service Financial Company, LLC and Service Finance Holdings, LLC for cash proceeds of USD $2.0 billion. ECN said the transaction is expected to close in the fourth quarter of 2021, subject to standard licensing and regulatory approvals and the satisfaction of customary closing conditions.

Other news

• Yukon's minimum wage increased from $13.85 per hour to $15.20 per hour on August 1st.
• New York-based Pfizer Inc. and Trillium Therapeutics Inc. of Mississauga announced that the companies had entered into a definitive agreement under which Pfizer will acquire Trillium for an implied equity value of USD $2.26 billion. The companies said the transaction is subject to court, regulatory, and shareholder approvals as well as certain other closing conditions customary for transactions of this nature.

United States and other international news

• The Bank of England's Monetary Policy Committee (MPC) voted to maintain the Bank Rate at 0.1%. The MPC also voted to maintain the stock of sterling non-financial investment-grade corporate bond purchases at £20 billion, and to continue with the existing programme of U.K. government bond purchases, maintaining the target for the stock of these government bonds at £875 billion.
• The Reserve Bank of Australia (RBA) maintained the targets for the cash rate and the yield on 3-year Australian Government bonds at 0.10%. The last change in the target for the cash rate was a 15 basis points reduction in November 2020. The RBA also said it would continue to purchase government securities at the rate of AUD $5 billion a week until early September and then AUD $4 billion a week until at least mid-November.
• The Reserve Bank of New Zealand (RBNZ) kept the Official Cash Rate (OCR), its main policy rate, unchanged at 0.25%. The last change in the OCR was a 75 basis points reduction in March 2020.
• The Monetary Policy and Financial Stability Committee of Norway's Norges Bank decided to keep the policy rate unchanged at 0.0%. The last change in the policy rate was a 25 basis points reduction in May 2020.
• On August 28th, United States President Joseph R. Biden, Jr., declared that an emergency exists in the State of Mississippi and ordered Federal assistance to supplement State, Tribal, and local response efforts due to the emergency conditions resulting from Hurricane Ida beginning on August 28, 2021, and continuing.
• On August 29th, United States President Joseph R. Biden, Jr., declared that a major disaster exists in the State of Louisiana and ordered Federal aid to supplement State, tribal, and local recovery efforts in the areas affected by Hurricane Ida beginning on August 26, 2021, and continuing.
• California-based Square, Inc. and Afterpay Limited of Australia announced they had entered into a Scheme Implementation Deed under which Square has agreed to acquire all of the issued shares in Afterpay for an implied value of approximately USD $29 billion. The companies said the transaction is expected to close in the first quarter of 2022, subject to shareholder and regulatory approvals and other customary conditions.
• New York State-based PepsiCo, Inc. announced it had entered into an agreement with PAI Partners (PAI) of France to sell Tropicana, Naked, and other select juice brands across North America for cash proceeds of approximately USD $3.3 billion. Pepsi said the transaction is expected to close late in 2021 or early 2022, subject to customary conditions, including works council consultations and regulatory approvals.
• Germany-based adidas AG announced it had entered into a definitive agreement to sell Reebok to Authentic Brands Group (ABG) of New York for a total consideration of up to €2.1 billion. The company said the transaction is expected to occur in the first quarter of 2022, subject to customary closing conditions.

Financial market news

• West Texas Intermediate crude oil closed at USD $68.50 per barrel on August 31st, down from a closing value of USD $73.95 at the end of July. Western Canadian Select crude oil traded in the USD $48 to $57 per barrel range throughout August. The Canadian dollar closed at 79.26 cents U.S. on August 31st, down from 80.24 cents U.S. at the end of July. The S&P/TSX composite index closed at 20,582.94 on August 31st, up from 20,287.80 at the end of July.