Canadian Economic News, February 2021 edition

COVID-19 timeline

• The Government of British Columbia announced on February 2nd it had formally extended the provincial state of emergency until February 16th. On February 16th, the state of emergency was extended until March 2nd.
• The Government of Manitoba announced on February 2nd it was extending the provincewide state of emergency for a period of 30 days.
• The Government of the Northwest Territories announced on February 2nd it had extended the territory-wide Public Health Emergency until February 16th. On February 16th, the territory-wide Public Health Emergency was extended until March 2nd. On February 11th, the Government of the Northwest Territories extended the State of Emergency in the City of Yellowknife until February 25th. On February 25th, the State of Emergency in the City of Yellowknife was extended until March 11th.
• The Government of Nova Scotia announced on February 5th it was renewing the state of emergency effective February 7th until February 21st. On February 19th, the Government announced it was renewing the state of emergency effective February 21st until March 7th.
• The Government of Canada announced on February 19th that non-essential travel restrictions with the United States had been extended until March 21st. The Government also said that restrictions on non-U.S. international travel into Canada had been extended until April 21st.

Selected COVID-19 responses

• The Government of Canada announced on February 2nd it had signed a memorandum of understanding with Novavax, Inc. of Maryland to pursue the production of its COVID-19 vaccine at the National Research Council of Canada's Biologics Manufacturing Centre in Montreal.

• The Government of Quebec announced on February 2nd that reductions will be made to certain measures in force in order to promote a gradual resumption of economic activity and social life, including:
  • reopening of non-priority businesses, including personal care and beauty shops;
  • reopening of shopping centers, with adequate supervision of common areas to avoid any gathering and loitering;
  • reopening of libraries and museums; and
  • resumption of outdoor activities with four people maximum.
• The Government also said that from February 8th to February 21st, the curfew from 8 p.m. to 5 a.m. will remain in effect.
• The Government of Canada announced on February 4th two new Interim Orders which prohibit pleasure craft in Canadian Arctic waters and cruise vessels in all Canadian waters until February 28, 2022. The Government said this means cruise vessels carrying more than 100 people are still prohibited from operating in Canadian waters. On February 12th, the Government of Canada announced further testing and quarantine requirements for international travellers arriving to Canada's air and land ports of entry, including, as of February 15th, proof of a negative COVID-19 molecular test result taken in the United States within 72 hours of pre-arrival by land and, in addition, as of February 22nd, the requirement to take a COVID-19 molecular test on arrival by land or by air.
• The Government of Nova Scotia announced on February 5th that public health restrictions would be eased effective February 8th, including:
  • retail businesses can operate at 75% capacity;
  • fitness facilities can operate at 75% capacity;
  • recognized businesses and organizations can resume hosting events with 150 people outdoors, or 50% of a venue's capacity indoors; and that these events must stop any food or alcohol service by 10 p.m. and end by 11 p.m.;
  • spectators are allowed at events, including sports games and practices and arts and culture rehearsals and performances, except when they are held at schools.
• The Government also said that the general gathering limit remains 10. On February 9th, the Government announced that effective February 10th, due to the recent spike in COVID-19 cases in Newfoundland and Labrador, people entering Nova Scotia from Newfoundland and Labrador must complete the Nova Scotia Safe Check-in form before arriving and self-isolate for 14 days upon arrival.
• On February 26th, the Government of Nova Scotia announced that tighter restrictions were returning in areas of Halifax Regional Municipality (HRM) as well as in the communities of Enfield, Elmsdale, Mount Uniacke, and Hubbards effective February 27th and continuing until March 26th, including:
  • restaurants and licensed establishments must stop service by 9 p.m. and close by 10 p.m.;
  • faith-based gatherings can have 150 outdoors or 50% capacity to a maximum of 100 indoors;
  • wedding ceremonies and funerals can have 10 people but there can be no wedding receptions and no funeral visitation or receptions;
  • sports events, special events, arts and culture events and festivals are not permitted;
  • sports practices and training and arts and culture rehearsals can have 25 people without physical distancing but there can be no games, competitions, tournaments or in-person performances and there can be no spectators.
• The Government also asked all residents to avoid all non-essential travel within the province and elsewhere.
• The Government of Alberta announced on February 8th that step one of a four-step plan to ease restrictions was underway, which included permitting, provincewide:
  • school-related and limited indoor and outdoor children's sport and performance activities, up to a maximum of 10 individuals;
  • one-on-one indoor personal fitness with a trainer; and
  • dine-in service at restaurants, cafés, and pubs up to a maximum of six people per table with liquor service ending at 10 p.m. and in-person dining closing by 11 p.m.
• The Government of Alberta announced on February 10th the Critical Worker Benefit, a joint federal–provincial program that will see $465 million go to approximately 380,000 Alberta public and private sector workers as $1,200 cash payments. The Government said the benefit would be available to workers in the health-care, social services, education, and private sectors who deliver critical services to Albertans or support food and medical supply chains.
• On February 17th, the Government of Alberta announced the new Enhanced COVID-19 Business Benefit, whereby up to $30,000 in support will be available to small and medium-sized businesses that have been most affected by the pandemic and ongoing health restrictions. The Government said this additional $10,000 payment can be used to offset costs associated with COVID-19, like purchasing personal protective equipment, paying bills, or hiring staff.
• The Government of Ontario announced on February 8th that the provincial emergency declared under s 7.0.1 of the Emergency Management and Civil Protection Act (EMPCA) would be allowed to terminate at the end of February 9th. The Government also said that Hastings Prince Edward Public Health; Kingston, Frontenac, and Lennox & Addington Public Health; and Renfrew County and District Health Unit would no longer be subject to the Stay-at-Home order effective February 10th. Also on the 8th, the Government announced it was introducing an "emergency brake" to allow for immediate action if a public health unit region experiences rapid acceleration in COVID-19 transmission or if its health care system risks becoming overwhelmed.
  • On February 10th, the Government of Ontario announced it was extending electricity rate relief for families, small businesses, and farms to support those spending more time at home while the province maintains the Stay-at-Home Order.
  • On February 11th, the Government of Ontario announced it was postponing March break until April 12 to 16.
  • On February 12th, the Government said it was transitioning 27 public health regions out of the shutdown and that Toronto Public Health, Peel Public Heath, York Region Public Health, and North Bay Parry Sound District would remain in shutdown.
  • On February 19th, the Government of Ontario said it was maintaining the shutdown, the Stay-at-Home order, and all existing public health and workplace safety measures in the Toronto and Peel Public Health Regions, along with the North Bay Parry Sound District until at least March 8th.
  • On February 26th, the Government of Ontario announced it was activating an "emergency brake" in Thunder Bay District Health Unit and Simcoe Muskoka District Health Unit to move the regions to Lockdown.
• The Government of Manitoba announced on February 9th that, effective February 12th, the province was loosening a variety of restrictions, including:
  • allowing restaurants and licensed premises to reopen at 25% capacity;
  • allowing outdoor sports facilities to reopen for casual sports as well as organized practices and games;
  • allowing gyms, fitness centres, and yoga studios to reopen at 25% capacity;
  • allowing indoor sporting facilities such as rinks, gymnastic clubs, and martial arts studios to reopen at 25% capacity for individual instruction only;
  • allowing museums, art galleries, and libraries to operate at 25% capacity;
  • allowing personal service businesses, such as those providing pedicures, electrolysis, cosmetic application, tanning, tattooing, or massage services to reopen at 25% capacity.
• The Government of Nunavut announced on February 25th that it would ease some of its COVID restrictions on March 1st, and that in the Qikiqtani and Kitikmeot regions,
  • all schools may open at Stage 1, to full-time, in-classroom learning;
  • all halls, conference spaces, theatres, and places of worship may increase to 75% capacity;
  • food and licensed establishments may increase capacity to 75% and a maximum of six people per table;
  • all gyms, fitness centres, pools, libraries, museums, and galleries may open to 25 people or 50% capacity, whichever is less.
• The Government also said that in all Kivalliq communities except Arviat, schools may all open at Stage 1.
• The Government of Prince Edward Island announced on February 28th that the entire province would move to red level measures for a three-day period, which included:
  • No personal or organized gatherings;
  • Stay home as much as possible;
  • All recreational facilities are closed, including gyms, fitness facilities, bingo halls, casinos, museums, and libraries;
  • No organized sports or recreation activities;
  • Only essential businesses and services are permitted to be open with operation at 50% capacity;
  • Non-essential businesses may continue to operate by phone, virtual services, delivery or pick up;
  • For essential retail services, operation at 50% of standard operating capacity is permitted; and
  • Schools, post-secondary institutions, and training programs cross the province are closed.

Resources

• ARC Resources Ltd. and Seven Generations Energy Ltd., both of Calgary, announced they had entered into a definitive agreement to combine in an all-share transaction valued at approximately $8.1 billion, inclusive of net debt. The companies said the transaction is expected to close in the second quarter of 2021, subject to shareholder and regulatory approvals and other customary closing conditions. The companies also said that the preliminary pro forma 2021 outlook estimates capital investments of approximately $1.0 billion to $1.1 billion, which will primarily be focused on sustaining production at ACR's and Seven Generations' core operating properties.
• Calgary-based Crescent Point Energy Corp. announced it had entered into an agreement with Shell Canada Energy, an affiliate of Royal Dutch Shell plc of the Netherlands, to acquire Shell's Kaybob Duvernay assets in Alberta for $900 million. The company said the acquisition is expected to close in April 2021.
• The Canadian Malartic Mine announced that both its partners, Yamaha Gold Inc. and Agnico Eagle Ltd., had approved construction to transform the Odyssey Project into the Odyssey Mine over the coming years. The Canadian Malartic Mine said development will require an investment of approximately $1.7 billion over seven years and that the future mine's life is expected to extend until 2039.

Manufacturing

• Montreal-based Bombardier Inc. announced it was launching a number of actions to improve profitability and cash generation and that, as a result, it was reducing its overall workforce by approximately 1,600 positions. Bombardier also said it will end production of Learjet aircraft later this year, allowing the Company to focus on its Challenger and Global aircraft families.
• Toronto-based De Havilland Aircraft of Canada Limited announced it will not produce new Dash 8-400 aircraft at its Downsview, Toronto, site beyond currently confirmed orders and that approximately 500 employees will be affected by the production pause.

Transportation

• Edmonton-based Flair Airlines announced that its network will expand beginning on May 1st as service is added to Ottawa, Kitchener-Waterloo, Halifax, and Saint John. Flair said it will also add service in June to Thunder Bay and Charlottetown, in July to Victoria, and in August to Abbotsford.
• Calgary-based WestJet Airlines Ltd. announced it would temporarily suspend operations to St. John's, Newfoundland; London, Ontario; and Lloydminster and Medicine Hat, Alberta, as of March 19th until June 24th.

Other news

• The Government of the Northwest Territories released its 2021-22 Budget on February 4th, which included investments in health, education, and the environment, as well as a proposal to reduce the small business tax rate to 2.0% from 4.0% effective January 1, 2021. The Government forecasts a $69 million operating surplus in 2021-22 and real GDP growth of 5.8% in 2021.
• The Government of Alberta released Budget 2021 on February 25th, which included a $1.25 billion contingency to fight COVID-19 as well as investments in infrastructure and targeted strategies to enhance and diversify sectors like agriculture, energy, technology, and tourism. The Government forecasts an $18.2 billion deficit for 2021-2022 and real GDP growth of 4.8% in 2021.
• Laurentian University of Sudbury announced it had commenced proceeding under the Companies' Creditors Arrangement Act (CCCA) to financially and operationally restructure the University. The University said current students will not see a change in their day-to-day education and Laurentian will continue actively recruiting new students.
• Montreal-based BCE Inc. announced an additional $1 billion to $1.2 billion over the next two years to roll out its fibre, rural Wireless Home Internet (WHI) and 5G networks. BCE said it plans to increase the number of new locations covered with fibre and WHI by as many as 900,000 in 2021.
• Toronto-based Brookfield Infrastructure Partners L.P. announced it had signed definitive agreements to sell 100% of its North American district energy business, Enwave, for total consideration of $4.1 billion. Brookfield said that Ontario Teachers' Pension Plan Board and Australia-based IFM Investors agreed to acquire 100% of Enwave's Canadian business while Queensland Investment Corporation (QIC) of Australia and Ullico Inc. of Washington, D.C., agreed to acquire 100% of Enwave's U.S. business. The company said the transactions are expected to close in mid-2021, subject to customary closing conditions.

United States and other international news

• On February 14th, U.S. president Joe Biden declared that an emergency exists in the State of Texas and ordered federal assistance to supplement state and local response efforts due to the emergency conditions resulting from a severe winter storm beginning on February 11, 2021, and continuing.
• The Bank of England's Monetary Policy Committee (MPC) voted to maintain the Bank Rate at 0.1%. The MPC also voted to (i) maintain the stock of sterling non-financial investment-grade corporate bond purchases at £20 billion, (ii) to continue with the existing programme of UK government bond purchases, and (iii) to maintain the target stock of purchased UK 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 maintained the parameters of the Term Funding Facility and decided to purchase an additional AUD $100 billion of bonds issued by the Australian Government and states and territories when the current bond purchase program is completed in mid-April. The Government said these additional purchases will be at the current rate of AUD $5 billion per week.
• 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 RBNZ also kept the Large Scale Asset Purchase (LSAP) Programme of up to NZD $100 billion and the Funding for Lending Programme (FLP) operation unchanged.
• The Executive Board of Sweden's Riksbank left the repo rate unchanged at 0.00% and said the rate is expected to remain at this level in the coming years. The Board also decided to continue to purchase assets within the envelope of SEK 700 billion and to offer liquidity within all the programmes launched in 2020.
• Buffalo, New York-based M&T Bank Corporation and People's United Financial, Inc. of Connecticut announced they had entered into a definitive agreement under which M&T will acquire People's United in an all-stock transaction valued at USD $7.6 billion. The companies said the merger is expected to close in the fourth quarter of 2021, subject to shareholder and regulatory approvals and customary closing conditions.
• Germany-based Siemens Energy AG announced the reduction of approximately 7,800 jobs around the world in the Gas and Power segment, including approximately 3,000 jobs in Germany, 1,700 in the United States, and 3,100 at other locations around the world. Siemens said the reductions are planned by the end of the 2025 financial year, with a large part to be implemented by the end of the 2023 financial year.

Financial market news

• West Texas Intermediate crude oil closed at USD $61.50 per barrel on February 26th, up from a closing value of USD $52.20 at the end of January. Western Canadian Select crude oil traded in the USD $38 to $52 per barrel range throughout February. The Canadian dollar closed at 78.83 cents U.S. on February 26th, up from 78.25 cents U.S. at the end of January. The S&P/TSX composite index closed at 18,060.26 on February 26th, up from 17,337.07 at the end of January.