Canadian Economic News, January 2025 Edition

Resources

• Calgary-based Canadian Natural Resources Limited announced a 2025 operating capital budget of approximately $6 billion, including capital related to a number of acquisitions, targeting production growth in 2025, as well as mid to long-term production and capacity growth.
• Calgary-based Shell Canada Limited and affiliates and Canadian Natural Resources Limited announced they had agreed to a provision in the 2017 Athabasca Oil Sands Project ("AOSP") transaction, where Shell will swap its remaining 10% interest in the Albian mines in exchange for an additional 10% interest in the Scotford upgrader and Quest Carbon Capture and Storage (CCS) facility. The companies said that post deal completion, Shell will have a 20% interest in the Scotford upgrader and Quest CCS facility and will fully exit AOSP's mining operations. The companies also said the transaction is expected to close in the first quarter of 2025, subject to regulatory approvals.

Manufacturing

• Winnipeg-based NFI Group Inc.'s subsidiary, Motor Coach Industries, announced it had been awarded a contract from Metrolinx, an agency of the Ontario government, for an initial firm order for 80 45-foot D45 CRT diesel commuter coaches along with a number of options that were added to NFI's fourth quarter 2024 backlog.
• Guelph, Ontario-based Linamar Corporation announced that it will invest approximately $1.1 billion in mobility technologies including Hybrid Propulsion Systems, Battery Electric Solutions, Propulsion technologies, Propulsion Agnostic Products, Inverter and Semi-conductor research, Energy Storage Systems, and Lightweight Structural Casting solutions across all propulsion types. Linamar said the investment will protect nearly 10,000 existing jobs and create over 2,300 new jobs in the Ontario automotive manufacturing sector. The Government of Ontario said that it will be providing more than $100 million in funding through Invest Ontario and that the Government of Canada is contributing up to $169.4 million towards the project through the Strategic Innovation Fund.

Other news

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 3.00%. The last change in the target for the overnight rate was a 50 basis points cut in December 2024. The Bank also announced its plan to complete the normalization of its balance sheet, ending quantitative tightening, and that the Bank will restart asset purchases in early March.
• TD Canada Trust, RBC Royal Bank of Canada (RBC), BMO Bank of Montreal, Canadian Imperial Bank of Commerce (CIBC), Scotiabank, and Laurentian Bank of Canada announced they were decreasing their Canadian dollar prime lending rates by 25 basis points from 5.45% to 5.20%, effective January 29th.
• The Government of Ontario announced it had approved Ontario Power Generation's (OPG) plan to proceed with the Project Definition Phase, the next step toward refurbishing Pickering Nuclear Generating Station's "B" units. The Government said that as part of the preparation for refurbishment, it had authorized OPG to sign a $2.1 billion contract with CanAtom Power Group, a joint venture between SNC-Lavalin Nuclear Inc. and Aecon Construction Group, for early engineering and procurement to prepare for the execution of the Retube Feeder and Boiler Replacement Program, creating more than 2,400 jobs across the province.
• The Government of Alberta announced that starting April 1st, parents with children zero to kindergarten age attending full-time licensed daycare facilities and family day home programs across the province will be eligible for a flat parent fee of $326.25 per month, or roughly $15 a day.
• Vaughan, Ontario-based GFL Environmental Inc. announced it had entered into a definitive agreement with funds managed by affiliates of Apollo Asset Management of New York and BC Partners LLP of the United Kingdom for the sale of its Environmental Services business for an enterprise value of $8.0 billion. GFL said the transaction is expected to close in the first quarter of 2025, subject to certain customary closing conditions.
• United Kingdom-based AstraZeneca announced an $820 million investment in Canada to support the move to a larger office facility in the Greater Toronto Area (GTA). The company said the investment will create more than 700 high-skilled jobs across all areas of the business.
• Red Deer, Alberta -based Peavey Industries LP announced it had sought and obtained an Initial Order for creditor protection under the Companies' Creditors Arrangement Act (CCAA) from the Court of King's Bench Alberta. Peavey said that following recently announced closures of 22 stores in Ontario and Nova Scotia, the Company will now begin store closing sales at all remaining locations across Canada, which includes 90 Peavey Mart stores and six MainStreet Hardware locations. The Company also said the closures and liquidation efforts would commence immediately.
• Mississauga-based Walmart Canada announced it will spend $6.5 billion over the next five years as it opens dozens of new stores, including in Port Credit and Oakville, Ontario this year, a distribution centre in Vaughan, Ontario this year, and new stores in Calgary, Edmonton, and Fort McMurray, due to open in 2027.

United States and other international news

• The U.S. Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 4.25% to 4.50%. The last change in the target range was a 25 basis points cut in December 2024. The Committee also said it will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
• 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 Bank of Japan announced it will encourage the uncollateralized overnight call rate to remain at around 0.50%. The last change in the uncollateralized overnight call rate was a 25 basis points increase to 0.25% in July 2024.
• The Executive Board of Sweden's Riksbank lowered the repo rate by 25 basis points to 2.25%. The last change in the repo rate was a 25 basis points reduction in December 2024.
• The European Central Bank (ECB) lowered its three key interest rates by 25 basis points to 2.75% (deposit facility), 2.90% (main refinancing operations), and 3.15% (marginal lending facility). The last change in the deposit facility was a 25 basis points reduction in December 2024.
• Missouri-based Emerson Electric Co., an energy and technology company, and Aspen Technology, Inc. of Massachusetts announced they had reached an agreement under which Emerson will acquire all outstanding shares of common stock of AspenTech not already owned by Emerson for USD $7.2 billion. The companies said the transaction is expected to close in the first half of 2025, subject to the satisfaction of customary closing conditions.

Financial market news

• West Texas Intermediate crude oil closed at USD $72.53 per barrel on January 31st, up from a closing value of USD $71.72 at the end of December. Western Canadian Select crude oil traded in the USD $58 to $66 per barrel range throughout January. The Canadian dollar closed at 69.04 cents U.S. on January 31st, down from 69.50 cents U.S. at the end of December. The S&P/TSX composite index closed at 25,533.10 on January 31st, up from 24,727.94 at the end of December.