Canadian Economic News, August 2024 Edition

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• South Africa-based Gold Fields Limited announced it had entered into a definitive agreement to acquire all of the common shares of Toronto’s Osisko Mining Inc. for a fully diluted equity value of approximately $2.16 billion. Gold Fields said the transaction will be finalised in the fourth quarter of 2024, if approved by Osisko Mining shareholders, and will give it full control of the Windfall Project in Quebec, currently jointly and equally owned and managed by Gold Fields and Osisko Mining.

• Oakville, Ontario-based Algonquin Power & Utilities Corp. announced it had agreed to sell its renewable energy business (excluding hydro) to a wholly owned subsidiary of LS Power of New York for a total consideration of up to USD $2.5 billion excluding debt. Algonquin said the transaction is expected to close in the fourth quarter of 2024 or the first quarter of 2025, subject to the satisfaction of customary closing conditions, including the approval of the U.S. Federal Energy Regulatory Commission and approval under applicable competition laws.

• Calgary-based Tourmaline Oil Corp. announced it had entered into a definitive agreement with Calgary-based Crew Energy Inc. to acquire all of the issued and outstanding common shares of Crew Energy in exchange for 18.8 million Tourmaline common shares and the assumption of net debt of approximately $240 million, for a total consideration of approximately $1.3 billion. Tourmaline said that the acquisition is expected to close in October 2024, subject to customary closing conditions.

• Ireland-based Linde announced it had signed a long-term agreement for the supply of clean hydrogen to Dow’s Fort Saskatchewan, Alberta, Path2Zero Project. The company said it will invest more than $2 billion to build, own and operate the integrated clean hydrogen and atmospheric gases facility.

Transportation

• Montreal-based Canadian National Railway Company (CN) announced on August 22nd that it had formally locked out employees represented by the Teamsters Canada Rail Conference (TCRC) after the union did not respond to another offer by CN in a final attempt to avoid a labour disruption. On August 26th, CN said it had received an order from the Canada Industrial Relations Board (CIRB) imposing binding arbitration between CN and the TCRC.

• Calgary-based Canadian Pacific Kansas City Limited (CPKC) announced on August 22nd it had locked out employees who are members of the Teamsters Canada Rail Conference (TCRC) – Train and Engine division and the Rail Traffic Controller division. On August 24th, CPKC announced it would restart railway operations on August 26th following the Canada Industrial Relations Board (CIRB) order requiring CPKC to resume operations and TCRC employees to resume their duties.

• The Government of Canada announced on August 22nd that it was invoking Section 107 of the Canada Labour Code to direct the Canada Industrial Relations Board (CIRB) to assist the parties in settling the outstanding terms of their collective agreements by imposing final binding arbitration.

Finance

• Toronto based Scotiabank announced it had entered into an agreement to acquire an approximate 14.9% ownership stake in KeyCorp of Ohio, a financial services company, for USD $2.8 billion. Scotiabank said the investment will be completed in two stages, with an initial investment of 4.9% expected to close in the fourth quarter of fiscal 2024, and the second stage of approximately 10% expected to close in fiscal 2025, subject to clearances and regulatory approvals.

Manufacturing

• Ohio based Goodyear Tire & Rubber Company announced that it was investing more than $575 million to expand and modernize its Napanee, Ontario plant, which the company said will bring 200 new, highly skilled manufacturing jobs to Eastern Ontario. Goodyear said construction began earlier this year and is expected to be completed by the middle of 2027. The Government of Canada stated it will invest $44.3 million via its Strategic Innovation Fund to support the project, while the Government of Ontario, through Invest Ontario, will contribute an additional $20 million.

Wildfires

• The Municipality of Jasper announced that all residents could return home on August 16th and that barring any unforeseen challenges, schools in Jasper will be ready to welcome students back on September 17th.

• Due to the ongoing Flanagan fire & LATE fire in northern Saskatchewan, the surrounding communities in the area were asked to evacuate on August 16th.

• The Government of Quebec announced it had decided to lift the ban on open fires in or in the vicinity of a forest and that the decision results in the complete lift of the ban on August 10th, which had been in effect since August 5th.

Other news

• The Government of Canada announced it intends to implement a 100% surtax on all Chinese-made electric vehicles (EVs), including electric and certain hybrid passenger automobiles, trucks, buses, and delivery vans, effective October 1st. The Government also said it intends to apply a 25% surtax on imports of steel and aluminum products from China, effective October 15th.

• The Government of Canada announced new measures to address fraud in Canada’s Temporary Foreign Worker (TFW) Program, including:

  • Enforcing consistent application of the 20% cap policy for temporary foreign workers. This includes the policy for the “dual intent sub-stream”, which applies to temporary foreign workers who intend to apply for permanent residency. Employers using this stream will be subject to more stringent guidelines;
  • Applying a stricter and more rigorous oversight in high-risk areas when processing Labour Market Impact Assessments (LMIAs) and when conducting inspections;
  • Considering LMIA fee increases to pay for additional integrity and processing activities; and,
  • Looking to implement future regulatory changes regarding employer eligibility, including factors such as a minimum number of years of business operations or history of lay-offs by the employer.

• The Government of Canada announced the approval of a proposal by the Government of Quebec to temporarily refuse to process new Labour Market Impact Assessment applications for the Temporary Foreign Worker Program low-wage stream in the Montréal economic region. The Government said that as a result, processing of these applications will be suspended for six months, starting on September 3rd, 2024, for job offers located in the Montréal economic region with wages below $27.47 per hour, which is the current Quebec median hourly wage.

• The Government of British Columbia announced that the U.S. Department of Commerce released its final determinations for the fifth Administrative Review (AR5) in the antidumping and countervailing duty investigations of imports of certain softwood lumber products from Canada. The Government said the newly increased rates are effective August 19th and include a total AR5 All Others rate of 14.54%.

• The Government of British Columbia announced a $560 million investment in student housing that includes 1,508 beds. The Government said this puts B.C. on track to meet or exceed the provincial targets of building 12,000 beds by 2028. The Government said construction is set to begin in fall 2026 and is expected to be open for students in phases, starting in fall 2028 and completing in fall 2029.

• The Government of Yukon announced on August 20th that it had made an application to the Ontario Superior Court of Justice to have a receiver appointed over the assets of Victoria Gold Corporation, including the Eagle Mine. The Government said the Court granted the government’s application and appointed PricewaterhouseCoopers as the receiver who will be responsible for the financial resolution throughout the mitigation and clean-up of Eagle Mine.

• UK-based nVent Electric plc announced it had entered into a definitive agreement to sell its Thermal Management business to funds managed by Brookfield Asset Management of Toronto for a cash purchase price of $1.7 billion. nVent said the transaction is expected to close by early 2025, subject to customary closing conditions, including regulatory approvals.

• Toronto-based Canada Jetlines, a Canadian leisure airline, announced that the continuing operations of the company have been dependent upon the company's ability to raise adequate financing and to grow the airline to the point where it can commence profitable operations and that as a result, Canada Jetlines said that the company will need to raise additional capital to continue operations.

United States and other international news

• The Bank of England's Monetary Policy Committee (MPC) voted to reduce the Bank Rate by 25 basis points to 5.00%. The last change in the Bank Rate was a 25 basis points increase in August 2023.

• The Reserve Bank of Australia (RBA) left the cash rate target unchanged at 4.35%. The last change in the cash rate target was a 25 basis points increase in November 2023.

• The Reserve Bank of New Zealand (RBNZ) lowered the Official Cash Rate (OCR), its main policy rate, by 25 basis points to 5.25%. The last change in the OCR was a 25 basis points increase in May 2023.

• The Monetary Policy and Financial Stability Committee of Norway's Norges Bank left the policy rate unchanged at 4.5%. The last change in the policy rate was a 25 basis points increase in December 2023.

• The Executive Board of Sweden's Riksbank lowered the repo rate by 25 basis points to 3.50%. The last change in the repo rate was a 25 basis points reduction in May 2024.

• Virginia-based Mars, Incorporated and Kellanova of Illinois announced they had entered into a definitive agreement under which Mars has agreed to acquire Kellanova for a total consideration of $35.9 billion, including assumed net leverage. Mars said the transaction is expected to close within the first half of 2025, subject to Kellanova shareholder approval and other customary closing conditions, including regulatory approvals.

• The World Health Organization (WHO) announced it had determined that the upsurge of monkeypox (mpox) in the Democratic Republic of the Congo (DRC), and a growing number of countries in Africa, constitutes a public health emergency of international concern (PHEIC) under the International Health Regulations (2005) (IHR).

Financial market news

• West Texas Intermediate crude oil closed at USD $73.55 per barrel on August 30th, down from a closing value of USD $77.91 at the end of July. Western Canadian Select crude oil traded in the USD $57 to $68 per barrel range throughout August. The Canadian dollar closed at 74.12 cents U.S. on August 30th, up from 72.42 cents U.S. at the end of July. The S&P/TSX composite index closed at 23,346.18 on August 30th, up from 23,110.81 at the end of July.