Canadian Economic News, June 2023 Edition

Wildfires

Quebec

• On June 2nd, the Government of Quebec announced it was prohibiting access and closing roads to forests on public land in areas affected by wildfires. On June 3rd, the Government announced it was extending the prohibition over a larger part of Quebec. On June 12th, the Government announced it was partially lifting the ban on access to forests on public land. On June 18th, the Government announced it was expanding the territory affected by the prohibition of access to forests on public lands due to low precipitation. On June 29th, the Government announced the partial lifting of the prohibition on part of the territory due to changing weather conditions.
• On June 16th, the Government of Canada announced that on June 3rd it had approved a request from the Government of Quebec to support their efforts to combat the wildfires in the province. The Government of Canada said it had authorized the Canadian Armed Forces to provide help with fire turnover, planning and coordination support, and airlift for mobility and logistical tasks.
• On June 5th, Sudbury, Ontario-based Wallbridge Mining Company Limited announced it had temporarily evacuated the camp at its Fenelon Gold project and suspended all exploration activities on its Detour-Fenelon Gold Trend Property due to the emergency order from the Government of Quebec.
• On June 5th, Toronto-based Osisko Mining Inc. announced it had withdrawn its staff and that all activities at site were suspended due to the ongoing forest fire situation affecting the communities in Abitibi and Eeyou Istchee James Bay.
• On June 6th, Idaho-based Hecla Mining Company announced it had temporarily suspended operations at the Casa Berardi mine due to forest fires in Abitibi and the Eeyou Istchee region in the James Bay area. On June 15th, Hecla said it planned to restart operations following the partial lifting of Quebec’s ban on access to the road to the mine and that it expects to resume normal production in the next few days. On June 20th, Hecla announced the suspension of operations at the Casa Berardi mine again due to the forest fires in the area.
• On June 6th, Vancouver-based Norris Lithium Inc. announced a temporary halt to its intended exploration activities at the Highway and Bus Lithium Properties in Quebec’s James Bay region as a result of the emergency order issued by the Government of Quebec. On June 16th, the company announced the resumption of its exploration activities following an improvement in the area’s forest fire situation and easing of restrictions.
• On June 6th, Montreal-based Brunswick Exploration Inc. announced it had temporarily suspended exploration activities across its three camps in the Eeyou Istchee-James Bay region of Quebec.

Nova Scotia

• On June 1st, the Government of Canada approved a Request for Federal Assistance from the Province of Nova Scotia to support their efforts to combat the wildfire situation in the province and authorized the Canadian Armed Forces to provide support and equipment.
• On June 13th, the Government of Nova Scotia announced that the provincewide burn ban and the remaining restrictions on travel and activities in the woods had been lifted. The Government said the burn ban had been announced on May 29th.

Alberta

• On June 3rd, the Government of Alberta announced that the provincial state of emergency was expiring but that all resourcing and support remains in place.
• On June 10th, Calgary-based TC Energy Corporation announced it had completed a shutdown of two compressor stations on its NOVA Gas Transmission Ltd. (NGTL) System and a gas storage facility near the active wildfires in the Edson, Alberta area. On June 16th, the company said that it had been able to complete a restart of compressor units at all locations that were shut down due to wildfire precautions.

Prince Edward Island

• On June 6th, the Government of Prince Edward Island announced that the fire closure order issued on May 30, 2023 had been revoked and the fire ban ended.

Saskatchewan

• On June 6th, Montreal-based Brunswick Exploration Inc. announced it had temporarily suspended activities in the region until it can properly assess the fire situation.

Resources

• St. John’s-based Equinor Canada Ltd. and its partner BP p.l.c. of the United Kingdom announced they were postponing the Bay du Nord development project for up to three years following changing market conditions and subsequent high-cost inflation.
• United Kingdom-based Rio Tinto Group announced it will invest $1.4 billion to expand its aluminium smelter at Complexe Jonquière in Quebec. The company said construction will run over two and a half years, with the smelter fully ramped up by the end of 2026. Rio Tinto also said the project will generate up to 1,000 jobs during the peak of construction and approximately 100 permanent jobs will be maintained.

Retail

• Boucherville, Quebec-based RONA inc. announced it had decided to simplify its organizational structure, which resulted in the elimination of 500 positions in Canada.
• Illinois-based Instant Brands LLC announced it and certain of its North American affiliates had filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code, as well as commenced ancillary proceedings in Canada under the Companies’ Creditors Arrangement Act seeking recognition of the U.S. Chapter 11 proceedings in Canada. Instant Brands said it had received a commitment for USD $132.5 million in new debtor-in-possession financing from its existing lenders.

Financial

• The Office of the Superintendent of Financial Institutions (OSFI) raised the Domestic Stability Buffer (DSB) by 50 basis points to 3.5% of total risk-weighted assets, effective November 1, 2023. OSFI said the DSB applies to Canada’s six largest banks.
• The Bank of Canada increased its target for the overnight rate by 25 basis points to 4.75%. The last change in the target for the overnight rate was a 25 basis points increase in January 2023. The bank said it is also continuing its policy of quantitative tightening.
• 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 increasing their Canadian dollar prime lending rates from 6.70% to 6.95%, effective June 8th.

Other news

• The Government of Canada introduced An Act respecting accountability, transparency and engagement to support the creation of sustainable jobs for workers and economic growth in a net-zero economy (Canadian Sustainable Jobs Act), which would establish a framework for accountability, a governance structure and engagement mechanisms to guide federal action that would facilitate and promote the creation of sustainable jobs and support workers and communities in Canada as the world advances toward a net-zero future.
• British Columbia's minimum wage increased from $15.65 to $16.75 per hour on June 1st.
• Missouri-based Bunge Limited announced it had entered into a definitive agreement with Viterra Limited of the Netherlands, together with certain affiliates of Glencore PLC, Canada Pension Plan Investment Board, and British Columbia Investment Management Corporation, to merge with Viterra in a stock and cash transaction valued at approximately USD $8.2 billion. Bunge said the merger is expected to close in mid-2024, subject to customary closing conditions, including receipt of regulatory and Bunge shareholder approvals.
• Winnipeg-based NFI Group Inc. announced that the Toronto Transit Commission (TTC) had awarded New Flyer Industries Canada ULC a firm order for 186 Xcelsior CHARGE NG™ heavy-duty transit buses, as well as the option for TTC to purchase up to an additional 435 of the same buses, for a total potential order of 621 buses over the duration of the contract.
• Toronto-based Allied Properties Real Estate Investment Trust announced it had entered into an agreement to sell its urban-data-centre portfolio in Downtown Toronto to KDDI Corporation of Japan, a telecommunication provider, for $1.35 billion. Allied Properties said the sale is expected to close before the end of the third quarter this year, subject to Competition Act approval and customary closing conditions.
• Toronto-based Porter Airlines Inc. announced it is adding Winnipeg to its network, with flights between Toronto Pearson International Airport (YYZ) and Winnipeg Richardson International Airport (YWG) beginning on September 7th.

United States and other international news

• The U.S. Federal Open Market Committee (FOMC) left the target range for the federal funds rate unchanged at 5.00% to 5.25%. The last change in the target range was a 25 basis points increase in May 2023. The Committee also said it will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
• The Bank of England's Monetary Policy Committee (MPC) voted to increase the Bank Rate by 50 basis points to 5.0%. The last change in the Bank Rate was a 25 basis points increase in May 2023.
• The Monetary Policy and Financial Stability Committee of Norway's Norges Bank raised the policy rate by 50 basis points to 3.75%. The last change in the policy rate was a 25 basis points increase in May 2023.
• The Executive Board of Sweden's Riksbank raised its repo rate by 25 basis points to 3.75%. The last change in the repo rate was a 50 basis points increase in April 2023.
• 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) raised the target for the cash rate by 25 basis points to 4.10%. The last change in the target for the cash rate was a 25 basis points increase in May 2023.
• The Organization of the Petroleum Exporting Countries (OPEC) announced on June 4th that OPEC and non-OPEC Participating Countries had agreed to adjust the level of overall crude oil production to 40.46 mb/d, starting January 1, 2024, until December 31st, 2024.
• New York-based Nasdaq, Inc. announced it had entered into a definitive agreement to acquire Adenza of California, a provider of management and regulatory software to the financial services industry, for USD $10.5 billion in cash and stock. Nasdaq said the transaction is expected to close within six to nine months, subject to regulatory approvals and other customary closing conditions.

Financial market news

• West Texas Intermediate crude oil closed at USD $70.64 per barrel on June 30th, up from a closing value of USD $68.09 at the end of May. Western Canadian Select crude oil traded in the USD $45 to $52 per barrel range throughout June. The Canadian dollar closed at 75.53 cents U.S. on June 30th, up from 73.51 cents U.S. at the end of May. The S&P/TSX composite index closed at 20,155.29 on June 30th, up from 19,572.24 at the end of May.