Canadian Economic News, June 2024 Edition

Resources

• The Haisla Nation and Pembina Pipeline Corporation of Calgary announced a positive Final Investment Decision on the USD $4.0 billion Cedar LNG Project, a floating liquefied natural gas facility in Kitimat, British Columbia. The parties said the facility will receive 400 million cubic feet per day of Canadian natural gas via the Coastal GasLink pipeline and is anticipated to be in service in late 2028.
• Shell Canada Products, a subsidiary of Shell plc of the United Kingdom, announced the Final Investment Decision for Polaris, a carbon capture project at the Shell Energy and Chemicals Park, Scotford, near Edmonton. Shell also announced the Final Investment Decision to proceed with the Atlas Carbon Storage Hub in partnership with ATCO EnPower of Calgary. Shell said both projects are expected to begin operations toward the end of 2028.
• Vancouver-based Taseko Mines Limited announced on June 1st that operations at its Gibraltar Mine had been suspended after its unionized workforce informed the company that they intended to take strike action as of midnight May 31st. The company said the mine was put on care and maintenance. On June 19th, Taseko announced that the union had ratified a three-year contract.
• Kelowna, British Columbia-based Fission Uranium Corp. and Paladin Energy Limited of Australia announced they had entered into a definitive arrangement agreement pursuant to which Paladin will acquire 100% of the issued and outstanding shares of Fission for an implied equity value of $1.14 billion. The companies said the transaction is targeted to close in the third quarter of 2024, subject to Fission shareholder approval and other closing conditions customary in transactions of this nature, including receipt of Investment Canada Act and Competition Act (Canada) clearance, British Columbia court approvals, and applicable stock exchange approvals.
• Toronto-based Victoria Gold Corp. announced on June 24th that the heap leach pad at the Eagle Gold Mine in Yukon experienced a failure and that, as a result, operations were temporarily suspended.

Financial

• 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 from 7.20% to 6.95%, effective June 6th.
• Montreal-based National Bank of Canada and Canadian Western Bank (CWB) of Edmonton announced they had entered into a definitive agreement under which National Bank will acquire all of the issued and outstanding common shares of CWB by way of a share exchange, valuing CWB at approximately $5.0 billion. The banks said the transaction is expected to close by the end of 2025, subject to approval by CWB shareholders and receipt of required regulatory approvals.

Other news

• The Bank of Canada reduced 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 July 2023. The bank said it is also continuing its policy of balance sheet normalization.
• British Columbia's minimum wage increased from $16.75 to $17.40 per hour on June 1st.
• On June 20th, the Government of the Northwest Territories announced that due to fire danger in the region, a fire ban had been put into effect for Territorial Parks around Yellowknife, prohibiting open fires. The Government said the ban, which is in addition to any regional fire bans in place, was effective from June 20th until July 4th.
• On June 21st, the Government of Newfoundland and Labrador announced that an outdoor fire ban prohibiting the setting of fires on forest land or within 300 metres of forest land was in place for all of Newfoundland and Labrador until further notice.
• On June 24th, the Government of Quebec announced a ban on open fires in or in the vicinity of a forest due to current conditions. The Government said the affected areas include Nord-Du-Québec, Côte-Nord, and Saguenay-Lac-Saint-Jean.
• Vancouver-based Copperleaf Technologies Inc., a provider of AI-powered enterprise Asset Investment Planning and Management software, announced it had entered into a definitive arrangement agreement with Industrial and Financial Systems, IFS AB of Sweden pursuant to which IFS will acquire all of the issued and outstanding common shares of Copperleaf for a total equity value of approximately $1.0 billion. Copperleaf said the transaction is expected to be completed in the third quarter of 2024, subject to customary conditions, including court approval, regulatory approval under the Canadian Competition Act, any other required regulatory approvals, and shareholder approval.

• On June 23rd, Unifor announced that 1,350 members at Montreal-based Bombardier were on strike.

United States and other international news

• The U.S. Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 5.25% to 5.50%. The last change in the target range was a 25 basis points increase in July 2023. The Committee also said it will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
• The European Central Bank (ECB) lowered its three key interest rates by 25 basis points to 4.25% (main refinancing operations), 4.50% (marginal lending facility), and 3.75% (deposit facility). The last change in these rates was a 25 basis points increase in September 2023. The ECB said it intends to discontinue reinvestments under the pandemic emergency purchase programme (PEPP) at the end of 2024.
• The Bank of Japan announced it will encourage the uncollateralized overnight call rate to remain at around 0% to 0.1%. The Bank of Japan ended its negative interest policy in March, 2024.
• The Reserve Bank of Australia (RBA) left the cash rate target unchanged at 4.35%. The last change in the cash rate target was a 25 basis points increase in November 2023.
• The Bank of England's Monetary Policy Committee (MPC) voted to maintain the Bank Rate at 5.25%. The last change in the Bank Rate was a 25 basis points increase in August 2023.
• 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 Executive Board of Sweden's Riksbank left the repo rate unchanged at 3.75%. The last change in the repo rate was a 25 basis points reduction in May 2024.
• OPEC and non-OPEC Ministers announced they had agreed to extend the level of overall crude oil production for OPEC and non-OPEC Participating Countries starting January 1, 2025 until December 31, 2025. In a separate announcement, OPEC+ countries which had announced additional voluntary cuts in April 2023 and November 2023, including Saudi Arabia, Russia, Iraq, and United Arab Emirates among others, announced they will extend their additional voluntary cuts of 2.2 million barrels per day until the end of September 2024 and then the 2.2 million barrels per day cut will be gradually phased out on a monthly basis until the end of September 2025.

Financial market news

• West Texas Intermediate crude oil closed at USD $81.54 per barrel on June 28th, up from a closing value of USD $76.99 at the end of May. Western Canadian Select crude oil traded in the USD $59 to $68 per barrel range throughout June. The Canadian dollar closed at 73.06 cents U.S. on June 28th, down from 73.33 cents U.S. at the end of May. The S&P/TSX composite index closed at 21,875.79 on June 28th, down from 22,269.12 at the end of May.