Canadian Economic News, January 2021 edition

COVID-19 timeline

• The Government of Manitoba announced on January 4th it was extending the provincewide state of emergency for a period of 30 days.
• The Government of British Columbia announced on January 5th it had formally extended the provincial state of emergency until January 19th. On January 19th, the Government extended the state of emergency until February 2nd.
• The Government of the Northwest Territories announced on January 5th it had extended the territory-wide Public Health Emergency until January 19th. The Government announced on January 14th it had extended the State of Emergency in the City of Yellowknife until January 28th. On January 19th, the Government extended the territory-wide Public Health Emergency until February 2nd, and on January 28th, it extended the State of Emergency in the City of Yellowknife until February 11th.
• The Government of Nunavut announced on January 7th it had extended the territory's public health emergency until January 21st. The Government on January 21st then extended the public health emergency until February 4th.
• The Government of Nova Scotia announced on January 8th it was renewing the state of emergency until January 24th. On January 22nd, the Government said it was renewing the state of emergency until February 7th.
• The Government of Ontario announced on January 12th it was declaring a second provincial emergency under s 7.0.1 (1) of the Emergency Management and Civil Protection Act and issued a stay-at-home order. On January 16th, the Government announced it was extending most orders currently in force under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020, until February 19th.

Selected COVID-19 responses

• The Government of Prince Edward Island announced on January 5th the further easing of public health measures within the province, including:
  • Organized gatherings can continue to operate with a total of 50 people but can now have up to two additional groups of 50 people with an approved operational plan;
  • Organized recreational and team sports may resume subject to the organized gathering limit of 50 people, but can now have up to two additional groups of 50 people with an approved operational plan; and
  • Restaurants and licensed premises can continue to offer in-room dining service with a closing time of 11 p.m. and a maximum table size of 10 people.

  On January 22nd, the Government announced the further easing of public health measures, including:

  • Organized gatherings can now have up to three additional groups of 50 people (up to 200 total);
  • Gyms/fitness facilities, museums, and libraries may now operate at capacity;
  • Retail stores, markets and craft fairs may operate at capacity;
  • Restaurants and licensed premises can continue to offer in-room dining service with a later closing time of midnight and a maximum table size of 10 people.
• The Government of Quebec announced on January 6th the implementation of additional measures, applicable until February 8th, to break the second wave of the COVID-19 pandemic, including:
  • a curfew will be in effect between 8 p.m. and 5 a.m.;
  • all business and office towers, restaurants, gyms, theatres, cinemas, and hair salons will be closed;
  • pharmacies and gas stations will remain open; and
  • primary schools will open on January 11th, secondary schools will open on January 18th.
• The Government of Ontario announced on January 7th it was extending online teacher-led learning until January 25th for elementary school students in the 27 Southern Ontario public health unit regions and extending the shutdown in Northern Ontario for another 14 days, aligning with the shutdown period in Southern Ontario. On January 12th, the Government announced additional public health measures, including:
  • Outdoor organized public gatherings and social gatherings are further restricted to a limit of five people;
  • All non-essential retail stores, including those offering curbside pickup or delivery, must open no earlier than 7 a.m. and close no later than 8 p.m.; and
  • Non-essential construction is further restricted.

  The Government also said that schools in Windsor-Essex, Peel Region, Toronto, York, and Hamilton will not return to in-person instruction until February 10th.

• The Government of Nova Scotia announced on December 31st that as of January 4th, restaurants and licensed establishments in areas of Halifax Regional Municipality and Hants County can reopen for dine-in service. The Government said that they must follow the provincewide restrictions, including ending service by 10 p.m. and closing by 11 p.m., and can continue takeout and delivery service with no restrictions. The Government also said that due to the recent spike in COVID-19 cases in New Brunswick, Nova Scotia was tightening border controls, including a new self-isolation requirement for people coming to Nova Scotia from New Brunswick. On January 22nd, the Government said that most public health restrictions would be extended until February 7th and that some restrictions for sports and arts and culture organizations would be eased starting January 25th.
• The Government of Manitoba announced on January 8th that the existing Critical (red) level restrictions had been extended until January 22nd. On January 21st, the Government announced it was in a position to cautiously reduce some restrictions and that the following changes would be in effect for Winnipeg (except for Churchill), Southern Health – Santé Sud, Interlake-Eastern and Prairie Mountain Health regions:
  • visit a household under a new 'rule of two', outdoor visits of up to five people;
  • stores can open for the sale of products provided they maintain occupancy limits of 25%;
  • operation of basic services that promote physical and mental health for Manitobans; and
  • barber shops and hair stylists to reopen at 25% capacity.

  On January 26th, the Government announced it was amending public health orders to put formal restrictions on interprovincial travel and that anyone entering Manitoba from anywhere in Canada will be required to self-isolate for 14 days. The Government said the restrictions will last for three weeks.

• The Government of New Brunswick announced on January 22nd that zone 4 (Edmundston region) would go into a full lockdown on January 23rd, under the province's mandatory order.
• The Government of Canada announced on January 29th that it and Canada's airlines had agreed to suspend all flights to and from Mexico and Caribbean countries until April 30th, effective as of January 31st. The Government also said that effective midnight February 3rd, in addition to proof of a negative pre-departure test, the Government will expand the existing international flight restrictions which funnel scheduled international commercial passenger flights into four Canadian airports: Montréal-Trudeau International Airport, Toronto Pearson International Airport, Calgary International Airport, and Vancouver International Airport and that the new restrictions will include scheduled commercial passenger flights arriving from the United States, Mexico, Central America, the Caribbean, and South America, which were exempted from the previous restriction.
• The Government of Alberta announced on January 29th the easing of certain health measures as of February 8th, including:
  • Children's sport and performance activities are permitted if they are related to school activities;
  • Only one-on-one training is permitted for indoor fitness activities; and
  • Up to a maximum of six people per table in restaurants, cafes, and pubs, with liquor service ending at 10 p.m. and in-person dining closing by 11 p.m.

Resources

• On January 20th, U.S. President Joe Biden announced he had revoked the Presidential permit, issued on March 29, 2019, that had been granted to TransCanada Keystone Pipeline, L.P. to construct, connect, operate, and maintain pipeline facilities at the international border of the United States and Canada. Calgary-based TC Energy Corporation announced that, as a result of the revocation of the Presidential permit, advancement of the project will be suspended.
• New Brunswick-based Irving Oil Ltd. announced it had reduced its workforce at its Saint John refinery by approximately 60 employees. The company also said it had earlier decided to reduce its contractor workforce at the Saint John refinery to 225 from a typical 1,000-person workforce in the first quarter.
• Calgary-based Enerplus Corporation announced it had entered into a definitive agreement to acquire all of the shares of Bruin E&P HoldCo, LLC, for total cash consideration of USD $465 million. The company said the acquisition is expected to close in early March 2021, subject to customary closing conditions.
• Vancouver-based Trevali Mining Corporation announced the planned restart of operations at its Caribou mine near Bathurst, New Brunswick. The company said the mine has been on a care and maintenance program since March 2020, and that it expects to return to mining in early February.

Manufacturing

• Oshawa-based General Motors of Canada Company announced that, subject to ratification of a tentative 2021 agreement reached with Unifor and confirmation of government support, General Motors plans to bring production of its recently announced BrightDrop electric light commercial vehicle, the EV600, to its CAMI manufacturing plant in Ingersoll, Ontario. GM said the investment is approximately $1 billion and that work will begin immediately to transform the CAMI plant to support electric vehicle production.

Transportation

• Calgary-based WestJet Airlines Ltd. announced it will eliminate more than 230 weekly departures, including 160 domestic, and remove approximately 30% of its currently planned February and March capacity from the schedule as frequently evolving advisories, travel restrictions, and guidance continue to negatively impact demand trends. WestJet said that as a result, the equivalent of 1,000 employees across the WestJet Group of Companies will be impacted through a combination of furloughs, temporary layoffs, unpaid leaves, and reduced hours.
• Montreal-based Air Canada announced it was adjusting its network under its COVID-19 Mitigation and Recovery Plan by further reducing first quarter system capacity by an additional 25%. Air Canada said that as a result, there will be a workforce reduction of approximately 1,700 employees, in addition to the over 200 impacted employees at its Express carriers.
• The Atlantic Canada Airports Association announced it had been advised by Air Canada that effective January 23rd, Air Canada would be suspending all service until further notice in Gander, Newfoundland and Labrador; Goose Bay, Newfoundland and Labrador; and Fredericton, New Brunswick. The Government of the Northwest Territories announced it had received notice that Air Canada was suspending all passenger operations to the Yellowknife Airport until further notice, effective January 23rd.
• Toronto-based Porter Airlines announced it was establishing March 29th as a revised tentative date for restarting flights based on the continuing surge in COVID-19 cases and corresponding public health measures.
• The Government of Canada announced it was lifting the existing Notice to Airmen (NOTAM) which prohibits the commercial operation of the Boeing 737 MAX in Canadian airspace on January 20, 2021, and that this will allow for the return to service of the aircraft in Canada.
• Edmonton-based Flair Airlines announced it was expanding with the addition of 13 new Boeing 737 MAX 8 aircraft. The company said it will lease the initial 13 aircraft from one of its financiers, 777 Partners, and that it will begin accepting delivery of the new aircraft in early 2021.
• Montreal-based Transat A.T. Inc. announced on January 29th the complete suspension of all scheduled Air Transat flights until April 30th following the Canadian government's request not to travel to Mexico and the Caribbean and the imposition of new quarantine and COVID-19 screening measures.
• Montreal-based TFI International Inc. announced it had signed a definitive agreement to acquire UPS Freight, the less-than-truckload (LTL) and dedicated truckload (TL) divisions of United Parcel Service, Inc. of Atlanta, Georgia, for USD $800 million. TFI International said the transaction is expected to close in the second quarter of 2021, subject to customary closing conditions including regulatory approvals.

Other news

• The Bank of Canada announced it was maintaining its target for the overnight rate at the effective lower bound of 0.25%. The target for the overnight rate was reduced by 150 basis points in March 2020. The Bank also said it was maintaining its forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week.
• Washington State-based Amazon.com, Inc. announced it had opened its first sortation centre in Quebec, in Longueil, in 2020, and is opening another sortation centre in Coteau-du-Lac in 2021. The company said both centres will create more than 1,000 jobs. Amazon also said it is opening two new delivery stations in Quebec in 2021 and a third in Quebec in 2022.

United States and other international news

• U.S. President Joe Biden announced on January 25th he had signed an executive order that the United States Government should, consistent with applicable law, use terms and conditions of Federal financial assistance awards and Federal procurements to maximize the use of goods, products, and materials produced in, and services offered in the United States.
• The U.S. Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 0.00% to 0.25%. The last change in the target range was a 100 basis points decrease announced in March 2020. The FOMC also said the Federal Reserve would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals.
• The European Central Bank (ECB) announced the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50%, respectively; the purchases under the pandemic emergency purchase programme (PEPP) will continue with a total envelope of €1,850 billion until at least the end of March 2022; and net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion.
• The Bank of Japan (BoJ) announced it will apply a negative interest rate of -0.1% to the Policy-Rate Balances in current accounts held by financial institutions at the BoJ and that it will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent.
• 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.
• The U.K. Government announced on January 4th a national lockdown and said restrictions are expected to last until the middle of February. Restrictions include the closure of all schools; non-essential retail, hospitality and personal care services; entertainment venues; and indoor and outdoor sports facilities. Restaurants can continue delivery, takeaway or click-and-collect of food.

Financial market news

• West Texas Intermediate crude oil closed at USD $52.20 per barrel on January 29th, up from a closing value of USD $48.52 at the end of December. Western Canadian Select crude oil traded in the USD $32 to $45 per barrel range throughout January. The Canadian dollar closed at 78.25 cents U.S. on January 29th, down from 78.54 cents U.S. at the end of December. The S&P/TSX composite index closed at 17,337.07 on January 29th, down from 17,433.36 at the end of December.