Canadian Economic News, July 2021 edition

COVID-19 timeline

• On July 7th, the Government of the Northwest Territories announced it had extended the territory-wide Public Health Emergency through July 20th. On July 20th, the Government extended the Public Health Emergency until August 3rd.
• On July 8th, the Government of Nunavut announced it had extended the territory's public health emergency until July 22nd. On July 22nd, the Government extended the public health emergency until August 5th.
• On July 9th, the Government of Nova Scotia announced it was renewing the state of emergency, effective July 11th, until July 25th. On July 23rd, the Government extended the state of emergency until August 8th.
• On July 9th, the Government of Saskatchewan announced it would remove the public health orders related to COVID-19 and lift the state of emergency for the province on July 11th.
• On July 26th, the Government of Manitoba announced it was extending the state of emergency for a period of 30 days.

Selected COVID-19 responses

• The Government of Alberta announced on July 1st that all COVID-19 restrictions were now lifted. The Government said mandatory isolation and quarantine rules would remain in place, and that masking was still required in hospitals, continuing care, mass transit, ride shares, and taxis.
• The Government of Canada announced on July 2nd that beginning July 5th, fully vaccinated travellers, arriving by land or air, who are eligible to enter Canada and who comply with specific criteria, will not be required to quarantine or complete a day-8 test. The Government also said that fully vaccinated travellers arriving by air will not be required to stay at a government-authorized accommodation to await their on-arrival test result.
• On July 19th, the Government announced that on September 7th it intends to open Canada's borders to any fully vaccinated travellers who have completed the full course of vaccination with a Government of Canada-accepted vaccine. The Government said that as a first step, starting August 9th, Canada plans to begin allowing entry to fully vaccinated American citizens and permanent residents who are currently residing in the United States for non-essential travel. The Government also said that in addition to Montréal-Trudeau International Airport, Toronto Pearson International Airport, Calgary International Airport, and Vancouver International Airport, effective August 9th international flights carrying passengers will be permitted to land at the following Canadian airports: Halifax Stanfield International Airport; Québec City Jean Lesage International Airport; Ottawa Macdonald–Cartier International Airport; Winnipeg James Armstrong Richardson International Airport; and Edmonton International Airport.
• On July 30th, the Government announced the extension of certain COVID-19 support measures, including:
  • Extending the eligibility period for the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and Lockdown Support until October 23, 2021 and increasing the rate of support employers and organizations can receive during the period between August 29 and September 25, 2021;
  • Extending the Canada Recovery Benefit (CRB), the Canada Recovery Caregiving Benefit (CRCB), and the Canada Recovery Sickness Benefit (CRSB) until October 23, 2021; and
  • Increasing the maximum number of weeks available for the CRB, by an additional 4 weeks, to a total of 54 weeks, at a rate of $300 per week, and ensuring it is available to those who have exhausted their employment insurance (EI) benefits.
• The Government of Prince Edward Island announced on July 6th that Canadian travelers could now apply for a PEI Pass to visit the province and that effective July 18th, PEI would welcome visitors from outside Atlantic Canada and the Magdalen Islands, three weeks earlier than originally planned. The Government said that Canadians without the PEI Pass may also travel to PEI but must complete a self-isolation declaration form prior to travel, isolate for eight days, and be tested on their final day of isolation.
• The Government of Quebec announced on July 7th the easing of restrictions effective July 12th, and that the following would apply everywhere in the province:
  • There will no longer be capacity restrictions in retail businesses; and
  • The maximum number of spectators authorized during amateur events is 50 indoors and 100 outdoors.
• On July 26th, the Government announced that additional flexibility for events, audiences, and bars will take effect on August 1st and will apply everywhere in Quebec, and that:
  • For seated events, outdoor capacity will be 500 and indoor capacity will be 250;
  • For stadiums, venues, and festivals, outdoor capacity will be 15,000 and indoor capacity will be 7,500; and
  • Establishments such as bars, restaurants, and microbreweries will be able to serve alcohol until 1 a.m.
• The Government of Ontario announced on July 9th it was moving the province into Step Three of the Roadmap to Reopen on July 16th and that this included, but was not limited to:
  • Outdoor social gatherings and organized public events with up to 100 people;
  • Indoor social gatherings and organized public events with up to 25 people;
  • Indoor dining permitted with no limits on the number of patrons per table with physical distancing and other restrictions still in effect;
  • Indoor sports and recreational fitness facilities to open subject to a maximum 50% capacity; capacity for indoor spectators is 50% or 1,000 people, whichever is less, while capacity for outdoor spectators is 75% or 15,000 people, whichever is less;
  • Essential and non-essential retail with capacity limited to the number of people that can maintain a physical distance of two metres;
  • Personal care services, including services requiring the removal of a face covering, with capacity limited to the number of people that can maintain a physical distance of two metres;
  • Museums, galleries, historic sites, aquariums, zoos, landmarks, botanical gardens, science centres, casinos/bingo halls, amusement parks, fairs and rural exhibitions, and festivals with capacity limited to 50% indoors and 75% outdoors;
  • Concert venues, cinemas, and theatres permitted to operate at up to 50% capacity indoors and up to 75% capacity outdoors; and
  • Indoor food or drink establishments where dance facilities are provided, including nightclubs and restobars, permitted up to 25% capacity.
• The Government of Nova Scotia announced on July 12th that it would start the fourth phase of its reopening plan on July 14th, and that the following restrictions were being eased provincewide:
  • People can have informal gatherings with their household members and close social contacts to a maximum of 25 indoors or 50 outdoors without physical distancing or masks;
  • Restaurants, licensed establishments, and casinos continue to operate with existing mask and distancing rules; establishments can return to their normal service hours;
  • All retail stores can operate at maximum capacity with public health measures in place;
  • Events hosted by a recognized business or organization can have 50% capacity to a maximum of 150 people indoors or 250 people outdoors;
  • Fitness and recreation facilities such as gyms, yoga studios, pools, and arenas can operate at maximum capacity with public health measures in place;
  • Organized sports practices, games, league play, competition, and recreation programs can involve up to 25 people indoors and 50 people outdoors without physical distancing; and
  • Museums, libraries, and the Art Gallery of Nova Scotia can open at maximum capacity with public health measures in place.
• The Government of Nunavut announced on July 14th the easing of public health measures in Iqaluit, and that as of July 16th:
  • Outdoor gatherings increase to a maximum of 100 people;
  • Indoor gatherings in dwellings increase to 15 people;
  • Restaurants and licensed facilities may open to 50% capacity;
  • Group counselling is permitted for up to 20 people;
  • Fitness classes are allowed for a maximum of 10 people;
  • Museums, galleries, and libraries may allow group tours;
  • The theatre may open at 50% capacity; and
  • Indoor team sports are now permitted.
• On July 28th, the Government announced an easing of public health measures in all Nunavut communities and that as of July 30th:
  • Indoor public gatherings in facilities such as community halls increase to 75% capacity or 100 people, whichever is less;
  • There are no restrictions to outdoor gatherings;
  • Restaurants and bars may open to 75% capacity; and
  • The theatre may open increase to 75% capacity or 100 people, whichever is less.
  • Gyms, fitness centres and swimming pools may increase group sessions to 25 people.
• The Government of Manitoba announced on July 14th it would implement the second phase of its Reopening Path two weeks early, and that effective July 17th the new public health orders would allow the following:
  • Indoor gatherings at private residences are permitted to a maximum of five people; indoor gatherings in public spaces are permitted to a maximum of 25 people;
  • Outdoor gatherings on private property increase to a maximum of 25 people, public outdoor gatherings increase to a maximum of 150 people;
  • Retail businesses increase to 50% capacity;
  • Restaurants, licensed premises, and food court capacities expand to 50% capacity; opening hours extend to midnight;
  • Dance, theatre, and music school capacities increase to 50%;
  • Indoor sporting facilities may host groups up to a maximum of 25 people, interaction between groups and tournaments are not permitted;
  • Outdoor recreation including games and practices may take place to maximum group size of 50 people;
  • Gym and fitness centre capacities expand to 50%;
  • Libraries may open to 50% capacity;
  • The following may now reopen for fully immunized people only, to a maximum capacity of 50%: movie theatres, bingo halls, VLT lounges and casinos, and museums and galleries; and
  • Large-scale, outdoor professional sports or performing arts events may operate with capacities up to 100%.
• The Government of Yukon announced on July 21st that, effective August 4th, it will lift the requirement for people to self-isolate upon entry to the territory, the requirement to wear masks in indoor public spaces, and the requirement for physical distancing at bars and restaurants, allowing these establishments to return to full capacity as it was before the pandemic.
• The Government of New Brunswick announced on July 23rd that the province's mandatory order would not be renewed on July 31st, and that the end of the order would:
  • Lift all mandatory travel and public health restrictions that have been in place over the course of the pandemic;
  • Lift all provincial border restrictions; provincial border checks will cease, and registration will no longer be required to enter New Brunswick from anywhere in Canada;
  • Lift all limits on gatherings and the number of people within facilities; capacity limits in theatres, restaurants, and stores will no longer be required; and
  • End the requirement to wear face masks in public.
• The Government said federal border restrictions would remain in effect.

Wildfires

• The Government of Canada announced on July 4th that it had accepted a formal Request for Federal Assistance from British Columbia, which is dealing with an unprecedented wildfire situation.
• The Government of British Columbia on July 20th declared a provincial state of emergency to support the provincewide response to the ongoing wildfire situation.
• Vancouver-based Canfor Corporation announced the curtailment, beginning July 26th, of approximately 115 million board feet of production capacity at its Canadian sawmills during the third quarter of 2021 due to the significant supply chain challenges and transportation backlog in Western Canada as a result of the extreme wildfire conditions.
• The Government of Ontario announced on July 14th that due to the extreme fire hazard and increased forest fire activity, it had issued an Emergency Area Order for all of Northwestern Ontario.

Resources

• The Government of Alberta announced it had become a 50% equity partner in the Sturgeon Refinery, north of Edmonton, and that Calgary-based Canadian Natural Resources Limited will continue to hold 50% equity. The Government said the 50% ownership interest was previously held by North West Refining Inc. of Calgary and that the agreement includes a 10-year extension of the processing agreement to 2058.
• The Government of Canada and the Government of Newfoundland and Labrador announced an agreement in principle for the financial restructuring of the Lower Churchill Projects, including a federal loan guarantee of $1 billion for the Project's Muskrat Falls and Labrador Transmission Assets.

Manufacturing

• United Kingdom-based Rio Tinto announced it had begun reducing production at its BC Works aluminum smelter in Kitimat, British Columbia due to a strike. The company said production would be reduced to around 35% of the smelter's annual capacity.
• Unifor announced on July 27th that members of Local 112 and 673 at the Downsview plant in Toronto employed by Bombardier Aviation and De Havilland Aircraft Canada had commenced strike action. Unifor said approximately 1,500 Bombardier workers and 700 De Havilland workers were on strike affecting both companies.
• Aurora, Ontario-based Magna International Inc. and Veoneer, a manufacturer of automotive safety technology based in Sweden, announced they had entered into a definitive merger agreement under which Magna will acquire Veoneer for an equity value of USD $3.8 billion. The companies said the transaction is expected to close near the end of 2021, subject to shareholder and regulatory approvals and other customary closing conditions.

Transportation

• Toronto-based Porter Airlines Inc. announced service would restart at Billy Bishop Toronto City Airport on September 8th. Porter also said it would be establishing service at Toronto Pearson International Airport for the first time and extending service to destinations throughout North America with the introduction of up to 80 Embraer E195-E2 aircraft into its fleet. Porter said the planes have transcontinental range and will enter into service starting in the second half of 2022.
• Montreal-based Air Canada announced its current summer transborder schedule, including 55 routes and 34 destinations in the United States, with up to 220 daily flights between the United States and Canada. Air Canada said the schedule coincides with the loosening of restrictions on travel between the two countries.
• The Government of Canada announced it was taking the first steps in preparing for the procurement process to build a new train service in the Toronto to Quebec City Corridor.

Other news

• The Bank of Canada announced it held 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 during March 2020. The Bank also said that it was adjusting its quantitative easing (QE) program to a target pace of $2 billion per week.
• Washington State-based Amazon.com, Inc. announced on June 28th that it plans to open its first amazon robotics fulfillment center in Parkland County, Alberta, creating more than 1,000 full-and part-time jobs. Amazon said the new robotics fulfillment center is set to launch in 2022.
• Bermuda-based Brookfield Business Partners L.P. announced in late June an agreement to acquire Modulaire Group, a provider of modular leasing services in Europe and Asia-Pacific and based in the United Kingdom, for USD $5 billion. Brookfield said the closing of the transaction is expected by the end of 2021, subject to customary closing conditions, including regulatory approvals.

United States and other international news

• 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 it 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.
• The European Central Bank (ECB) announced (i) the interest rates on the main refinancing operations, the marginal lending facility, and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50%, respectively; (ii) net asset 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 (iii) net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion. The ECB Governing Council said it expects purchases under the PEPP over the current quarter to be conducted at a significantly higher pace than during the first months of the year.
• 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 Reserve Bank of Australia (RBA) maintained the targets for the cash rate and the yield on 3-year Australian Government bonds at 0.10% and the interest on Exchange Settlement balances at zero percent. 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 purchasing government bonds, after the completion of the current bond purchase program in early September, at a rate of 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 RBNZ also said it had agreed to reduce the current stimulatory level of monetary settings and that it will halt additional asset purchases under the Large Scale Asset Purchase (LSAP) programme by July 23, 2021.
• 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 during the forecast period. The Riksbank also said that during the fourth quarter it will buy bonds for an aggregate nominal amount of SEK 68.5 billion and that this means the purchasing rate will continue to be tapered off but that the envelope for asset purchases of SEK 700 billion will be fully utilised up until the end of 2021.
• OPEC and non-OPEC members announced they had resolved to adjust upward their overall production by 0.4 mb/d on a monthly basis starting August 2021 until phasing out the 5.8 mb/d production adjustment and to endeavor to end production adjustments by the end of September 2022.
• California-based Zoom Video Communications, Inc. announced it had entered into a definitive agreement to acquire Five9, Inc., a provider of cloud contact center solutions, also of California, in an all-stock transaction valued at approximately USD $14.7 billion. Zoom said the transaction is expected to close in the first half of 2022, subject to Five9 stockholder and regulatory approvals and other customary closing conditions.

Financial market news

• West Texas Intermediate crude oil closed at USD $73.95 per barrel on July 30th, up from a closing value of USD $73.47 at the end of June. Western Canadian Select crude oil traded in the USD $52 to $62 per barrel range throughout July. The Canadian dollar closed at 80.24 cents U.S. on July 30th, down from 80.68 cents U.S. at the end of June. The S&P/TSX composite index closed at 20,287.80 on July 30th, up from 20,165.58 at the end of June.