June 2019 edition

The Government of Canada announced on June 18th that it had approved the Trans Mountain Expansion (TMX). The Government said that it is committed to acting on the recommendations and conditions outlined in the Reconsideration report that the National Energy Board delivered to the Government of Canada in February 2019.

On June 21st, the Government of Canada announced the Royal Assent of Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act, and to make consequential amendments to other Acts. The Government also announced that the Oil Tanker Moratorium Act (Bill C-48) had received Royal Assent.

The Government of Alberta announced on June 27th that oil production limits in August will be set at 3.74 million barrels per day, an increase of 25,000 barrels a day from the July limit.

On May 31st, Canadian Natural Resources Limited (CNRL) announced that, in response to wildfires in the Wabasca and Slave Lake, Alberta areas, it had completed the evacuation of all 240 personnel at its Pelican Lake and Woodenhouse operations, and had temporarily shut-in approximately 65,000 bbl/d of crude oil production. On June 8th, CNRL announced that it was restarting operations at these facilities, and was ramping up production in a controlled manner over the following week, barring changes in wildfire conditions.

Vancouver-based Canfor Corporation announced it will be closing its Vavenby sawmill in British Columbia in July following an orderly wind down. The company said the sawmill has an annual production capacity of approximately 250 million board feet. Separately, Canfor also announced that it will be curtailing operations at all British Columbia sawmills, except WynnWood. The company said the majority of mills will be curtailed for two weeks or the equivalent, with extended curtailments of four weeks at Houston and Plateau, and six weeks at Mackenzie. Canfor said the curtailments are scheduled to run from June 17th through July 26th.

Tennessee-based Louisiana-Pacific Corporation announced that its Peace Valley facility in Fort St. John, B.C. will indefinitely curtail production of oriented strand board (OSB) beginning early in the third quarter. The company said the facility has a stated annual capacity of 800 million square feet.

Vancouver-based West Fraser Timber Co. Ltd. announced its intention to permanently close its Chasm lumber mill and eliminate the third shift from its 100 Mile House lumber mill, both to occur during the third quarter of 2019. The company said that it anticipates lumber production to be permanently reduced by approximately 314 million board feet.

Toronto-based Norbord Inc. announced on June 4th that its OSB mill in High Level, Alberta had resumed production. The company had announced on May 21st that it had temporarily suspended production to comply with evacuation orders due to wildfires burning in the region. On June 11th, Norbord announced its intention to indefinitely curtail production at its OSB mill in 100 Mile House, British Columbia, starting in August 2019.

The Government of Prince Edward Island tabled Budget 2019-20 on June 25th, which included new investments in health care, education, and affordable housing. The budget also included an increase in the basic personal income tax amount to $10,000 in 2020, and a decrease in the small business tax rate by 0.5% to 3.0%. The Government forecasts a $1.8 million surplus in 2019-2020 and real GDP growth in 2019 of a similar magnitude to 2018 (+2.6%).

British Columbia's general hourly minimum wage increased from $12.65 to $13.85 on June 1st.

The Embassy of the People's Republic of China in Canada announced on June 26th that China had taken urgent preventative measures and requested that the Canadian government suspend the issuance of certificates for meat exported to China since June 25th.

Toronto-based HBC announced it had entered into definitive agreements to sell the company's remaining stake in its German real estate joint venture, and divest its related retail joint venture to its partner, SIGNA, along with assumption of certain obligations for a total consideration of $1.5 billion. HBC said the transaction is expected to close in fall 2019, subject to applicable regulatory approvals and other customary closing conditions.

Air Canada and Transat A.T. Inc., both of Montreal, announced they had concluded a definitive arrangement agreement that provides for Air Canada's acquisition of all issued and outstanding shares of Transat for $520 million. The companies said the transaction is expected to be completed in early 2020, subject to regulatory and shareholder approvals and other closing conditions.

The Toronto Raptors won the 2019 National Basketball Association Championship.

The U.S. Federal Open Market Committee (FOMC) maintained the target range for the federal funds interest rate at 2.25% to 2.50%. The last change in the target range was a 25 basis point increase announced in December 2018.

The Reserve Bank of Australia lowered the cash rate by 25 basis points to 1.25%. The last change in the cash rate was a 25 basis point reduction in August 2016.

The European Central Bank (ECB) left the interest rate on the main refinancing operations of the Eurosystem unchanged at 0.00%, and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.25% and -0.40%, respectively. The ECB also announced that the interest rate in each of the quarterly targeted longer-term refinancing operations (TLTRO) will be set at a level that is 10 basis points above the average rate applied in the Eurosystem's main refinancing operations over the life of the respective TLTRO.

The Bank of England's Monetary Policy Committee voted to maintain the Bank Rate at 0.75% and the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £435 billion. The last change in the Bank Rate was a 25 basis-point increase in August 2018.

The Bank of Japan (BoJ) announced it will continue to apply a -0.1% interest rate to the Policy-Rate Balances in current accounts held by financial institutions at the BoJ. The BoJ also said it would continue to purchase Japanese government bonds (JGB) so that 10-year JGB yields will remain at around zero percent.

The Executive Board of Norway's Norges Bank decided to raise the policy rate by 25 basis points to 1.25%. The last change in the policy rate was a 25 basis point increase in March 2019.

The Reserve Bank of New Zealand left the Official Cash Rate, its main policy rate, unchanged at 1.50%. The last change in the Official Cash Rate was a 25 basis point reduction in May 2019.

Illinois-based AbbVie Inc. and Allergan plc of Ireland announced they had entered into a definitive transaction agreement under which AbbVie will acquire Allergan in a cash and stock transaction for a transaction equity value of approximately USD $63 billion. The companies said they anticipate the transaction to close by early 2020, subject to regulatory and Allergan's shareholder approvals.

California-based Salesforce.com Inc. and Tableau Software Inc. of Washington State announced they had entered into a definitive agreement under which Salesforce will acquire Tableau in an all-stock transaction representing an enterprise value of USD $15.7 billion (net of cash). The companies said the acquisition is expected to be completed during Salesforce's fiscal third quarter ending October 31st, 2019, subject to customary closing conditions and regulatory approvals.

New York-based Pfizer Inc. and Array BioPharma Inc. of Colorado announced they had entered into a definitive agreement under which Pfizer will acquire Array for a total enterprise value of approximately USD $11.4 billion. Pfizer said it expects to complete the acquisition in the second half of 2019, subject to customary closing conditions.

Massachusetts-based Raytheon Company and United Technologies Corp. of Connecticut announced they had entered into an agreement to combine in an all-stock merger of equals. The companies said the merger is expected to close in the first half of 2020, subject to shareholder and regulatory approvals and customary closing conditions.

Illinois-based Boeing announced that International Airlines Group of the U.K. had signed a letter of intent for 200 Boeing MAX jets in a deal valued at more than USD $24 billion, per list prices. Boeing also announced that Korean Air and Air Lease Corporation plans to add 30 new 787 Dreamliner airplanes to its fleet, with a commitment to purchase 10 new 787-10s and 10 additional 787-9 airplanes valued at USD $6.3 billion at current list prices.

Netherlands-based Airbus announced that Air Lease Corporation of California signed a letter of intent for 100 Airbus aircraft, including 50 A220-300s and 27 A321XLRs, as well as an incremental order for an additional 23 A321neos.