November 2018 edition

Resources

• Calgary-based Encana Corporation and Newfield Exploration Company of Texas announced they had entered into a definitive agreement whereby Encana will acquire all of the outstanding shares of common stock of Newfield in an all-stock transaction valued at approximately USD $5.5 billion. Encana said the transaction is expected to close in the first quarter of 2019, subject to receipt of regulatory and shareholder approvals by both companies.
• Calgary-based Imperial Oil Limited announced it had made a final investment decision to develop its $2.6 billion Aspen project, located about 45 kilometres northeast of Fort McMurray, Alberta. The company said construction will begin in the fourth quarter of 2018 with first production expected in 2022.
• Calgary-based TransCanada Corporation announced on October 31st that it will move forward with a $1.5 billion expansion of its NOVA Gas Transmission Ltd. System. The company said the expansion program consists of approximately 197 kilometres of large diameter pipeline, three compression units, meter stations and associated facilities. TransCanada also said that applications for approvals to construct and operate the facilities are expected to be filed with the National Energy Board in the second quarter of 2019 and, pending receipt of regulatory approvals, construction will commence as early as the third quarter of 2020.
• Calgary-based Inter Pipeline Ltd. announced on October 30th that its European storage subsidiary, Inter Terminals Ltd., had entered into an agreement to acquire 100% of the issued share capital of NuStar Energy, L.P.'s European bulk liquid storage business for cash consideration of approximately $354 million. The company said the transaction is expected to close in the fourth quarter of 2018, subject to customary closing conditions.
• On November 2nd, Calgary-based Enbridge Inc. announced that, following the October 9th rupture that occurred on one of two natural gas pipelines in the company's BC Pipeline system, the affected 36-inch pipeline had been repaired and placed back into service at reduced pressure.
• On November 20th, Calgary-based Husky Energy Inc. announced that production remains shut in at the SeaRose floating production, storage and offloading (FPSO) vessel with all production wells secure after a period of extreme weather and an oil release on November 16th. Husky said that operations at the White Rose field are suspended until a full inspection of all facilities is completed and Husky has received the support and approval of the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB).
• On November 8th, the United States District Court for the District of Montana announced that it enjoins the United States Department of State and Calgary-based TransCanada Corporation from engaging in any activity in furtherance of the construction or operation of Keystone XL and associated facilities until the Department of State has completed a supplement to the 2014 final supplemental Environmental Impact Study that complies with the requirements of the National Environmental Policy Act and the Administrative Procedure Act.
• Québec-based Gazoduq Inc. announced it is launching an infrastructure project involving the construction of an underground natural gas transmission line from northeastern Ontario to Saguenay, Québec to be used to transport Western Canadian natural gas to Énergie Saguenay, a future gas liquefaction (LNG) facility. Gazoduq said the estimated cost for this project is $4.5 billion. The company said the project is currently in the planning and design stage and is anticipated to enter the construction phase in 2022 and the operational phase in 2024.
• Vancouver-based Pan American Silver Corp. and Tahoe Resources Inc. of Nevada announced they had entered into a definitive agreement for Pan American to acquire all of the outstanding shares of Tahoe for a base purchase price totaling USD $1.067 billion. The companies said the transaction is expected to close in the first quarter of 2019, subject to shareholder and regulatory approvals as well as customary closing conditions.
• Vancouver-based West Fraser Timber Co. Ltd. announced it will permanently curtail approximately 300 million board feet of combined lumber production at its Fraser Lake and Quesnel Sawmills. The company said the reduction in lumber production is expected to impact approximately 60 employees at Fraser Lake and 75 employees at Quesnel Sawmill over the first and second quarter of 2019.
• Saskatoon-based Nutrien Ltd. announced it had decided to permanently close its New Brunswick potash facility. The company said the facility was placed in care and maintenance in early 2016 and has not produced potash since that time.
• The Government of Newfoundland and Labrador and Minnesota-based Tacora Resources Inc. announced the restart of the Scully Mine located in Wabush, Newfoundland and Labrador.

Manufacturing

• Montreal-based Bombardier Inc. announced it had launched a company-wide restructuring initiative which will result in a reduction of approximately 5,000 positions across the organization over the next 12 to 18 months. Bombardier also said it had entered into definitive agreements for (i) the sale of the Q Series aircraft program and de Havilland trademark to a wholly owned subsidiary of Longview Aviation Capital Corp. for approximately $300 million; and (ii) the sale of Business Aircraft's flight and technical training activities to CAE Inc. of Montreal and the monetization of royalties for approximately $800 million. Bombardier said that both transactions are expected to close by the second half of 2019, following regulatory approvals.
• Detroit-based General Motors Company (GM) announced that future products will be allocated to fewer plants next year, and that assembly plants that will be unallocated in 2019 include Oshawa Assembly in Oshawa, Ontario, Detroit-Hamtramck Assembly in Michigan, and Lordstown Assembly in Ohio. GM said it will also cease the operations of two additional plants outside of North America by the end of 2019. GM also said that actions are being taken to reduce the company's salaried and salaried contract staff by 15%.
• Mississauga-based Maple Leaf Foods Inc. announced plans to build a $660 million poultry facility in London, Ontario. The company said construction is expected to begin in the spring of 2019, with start-up planned to commence in the second quarter of 2021. Maple Leaf also said that its plant in St. Marys is expected to close by late 2021, while its plants in Toronto and Brampton are expected to close by mid-late 2022.

Retail

• North Carolina-based Lowe's Companies, Inc. announced the wind-down of certain underperforming store locations, including 31 Canadian stores and other locations and 20 U.S. stores. Lowe's said it expects to close the impacted stores by February 1st, 2019. The company also announced separately that it intends to exit its Mexico retail operations and has identified certain non-core activities within its U.S. home improvement business to exit.

Other news

• The Government of Canada released its 2018 Fall Economic Statement on November 21st, which included proposals to improve business competitiveness, increase investment in the clean technology sector, increase funding to the Strategic Innovation Fund, launch an export diversification strategy, and remove barriers to trade within Canada. The Government forecasts a deficit of $18.1 billion in 2018-19 and $19.6 billion in 2019-20 and economic growth of 2.0% in each of 2018 and 2019.
• The Government of Newfoundland and Labrador released its Fiscal and Economic Update on November 6th. The Government forecasts a budget deficit of $547 million in 2018-19 and an economic contraction of 2.8% in 2018 followed by economic growth of 2.1% in 2019.
• The Government of Ontario released its 2018 Ontario Economic Outlook and Fiscal Review on November 15th, which included proposals to: reduce taxes for low-income workers; repeal much of the Fair Workplaces, Better Jobs Act, 2017; keep the minimum wage at $14 per hour; and increase the amount of payroll that is exempt from the Employer Health Tax for eligible Ontario employers. The Government forecasts a deficit of $14.5 billion in 2018-19 and economic growth of 2.0% in 2018 and 1.8% in 2019.
• The Government of British Columbia released its Budget 2018 Second Quarterly Report on November 26th. The Government forecasts a budget surplus of $1.35 billion in 2018-19 and economic growth of 2.3% in 2018 and 2.4% in 2019.
• The Government of Saskatchewan released its 2018-19 Mid-Year Financial Update on November 29th. The Government forecasts a deficit of $348.3 million in 2018-19 and economic growth of 0.7% in 2018 and 1.2% in 2019.
• The Government of Alberta released its 2018-19 Second Quarter Fiscal Update and Economic Statement on November 30th. The Government forecasts a deficit of $7.5 billion in 2018-19 and economic growth of 2.5% in 2018 and 2.0% in 2019.
• The Government of Prince Edward Island released its Fiscal and Economic Update on November 23rd. The Government forecasts a budget surplus of $4.35 million in 2018-19 and economic growth of 2.1% in 2018 and 1.7% in 2019.
• The Government of Prince Edward Island announced it was raising the Basic Personal Amount by $500 to $9,160, to be made retroactively to January 1, 2018. The Government also said it was reducing taxes on small businesses by 0.5%, as of January 1, 2019.
• The Government of Canada announced on November 26th that Bill C-89, which sets out a process by which Canada Post and the Canadian Union of Postal Workers (CUPW) will continue to negotiate with an independent mediator-arbitrator and the employees will return to work, had received Royal Assent. The Government said the rotating strikes will end and all postal services would resume as of 12 p.m. November 27th.
• The Government of Canada announced on November 30th that it, the United States and Mexico signed the new Canada-United States-Mexico Agreement (CUSMA). The Government said parties will now undertake their domestic process towards ratification and implementation of the CUSMA.
• The Government of Ontario released a new environment plan to lower greenhouse gas emissions and help communities protect themselves from climate change. The Government said the plan includes emission performance standards for large emitters and an emission reduction fund – The Ontario Carbon Trust – and a reverse auction to encourage private investment in clean technology solutions.
• Ireland-based Johnson Controls International plc announced a definitive agreement to sell its Power Solutions business to Brookfield Business Partners L.P. together with institutional partners including Caisse de dépôt et placement du Québec in a cash transaction valued at USD $13.2 billion. Johnson Controls said the transaction is expected to close by June 30, 2019, subject to customary closing conditions and required regulatory approvals.
• Waterloo, Ontario-based BlackBerry Limited announced it had entered into a definitive agreement to wholly acquire Cylance Inc. of California, an artificial intelligence and cybersecurity company, for USD $1.4 billion. BlackBerry said the deal is expected to close prior to the end of its fiscal year in February 2019, pending regulatory approvals and other customary closing conditions.
• The Kraft Heinz Company of Illinois announced it had entered into a definitive agreement to sell its Canadian natural cheese business to Italy-based Parmalat for a purchase price of $1.62 billion. The company said the proposed transaction is expected to close in the first half of 2019, subject to regulatory review and approval.
• Nova Scotia-based High Liner Foods Incorporated announced that subsequent to the end of the third quarter of 2018, it had completed its organizational realignment, resulting in a reduction of 14% of its salaried workforce.
• Montreal-based Canadian National Railway Co. (CN) announced it had reached an agreement to acquire Winnipeg-based The TransX Group of Companies. CN said the acquisition is subject to regulatory review by Competition Bureau Canada and Canada's Ministry of Transportation.
• Ireland-based Accenture PLC announced it opened a new Canada innovation hub in Toronto and that it is also adding 800 new technology jobs by the end of 2020 and expanding its apprenticeship program.

United States and other international news

• The U.S. Federal Open Market Committee (FOMC) maintained the target range for the federal funds interest rate at 2.00% to 2.25%. The last change in the target range was a 25 basis point increase announced in September 2018.
• 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.
• On October 31st, 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 Reserve Bank of Australia maintained the cash rate at 1.50%. The last change in the cash rate was a 25 basis point reduction in August 2016.
• The Reserve Bank of New Zealand left the Official Cash Rate, its main policy rate, unchanged at 1.75%. The last change in the Official Cash Rate was a 25 basis point reduction in November 2016.
• The European Commission announced that European Union leaders had endorsed the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community. The Commission also said that the European Council had approved the Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom of Great Britain and Northern Ireland.
• On November 5th, the U.S. Department of the Treasury announced that its Office of Foreign Assets Control sanctioned more than 700 individuals, entities, aircraft, and vessels as part of the re-imposition of the remaining U.S. nuclear-related sanctions against Iran announced in May 2018. The U.S. Secretary of State said that, regarding oil imports, the U.S. will granting temporary exemptions to China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey.
• On November 12, U.S. President Donald Trump declared that a major disaster exists in the State of California and ordered Federal aid to supplement State, tribal, and local recovery efforts in areas affected by wildfires beginning on November 8, 2018.
• Massachusetts-based athenahealth, Inc., Veritas Capital of New York and Evergreen Coast Capital of California announced they had entered into a definitive agreement under which an affiliate of Veritas and Evergreen will acquire athenahealth for approximately USD $5.7 billion in cash. The companies said the transaction is expected to close in the first quarter of 2019, subject to shareholder and regulatory approvals and customary closing conditions.
• Washington-based Amazon.com Inc. announced it had selected New York City and Arlington, Virginia, as the locations for the company's new headquarters. Amazon said it will invest USD $5 billion and create more than 50,000 jobs across the two new headquarters locations. Amazon also said it had selected Nashville for a new Center of Excellence for its Operations business and that the new Operations Center will create more than 5,000 jobs.
• Germany-based Bayer AG announced a series of portfolio, efficiency and structural measures, including a reduction of around 12,000 of 118,200 jobs worldwide.

Financial market news

• West Texas Intermediate crude oil closed at USD $50.93 per barrel on November 30th, down from $65.31 at the end of October. Western Canadian Select crude oil traded under USD $20.00 per barrel throughout much of November. The Canadian dollar closed at 75.18 cents U.S. on November 30th, down from 76.09 cents U.S. at the end of October. The S&P/TSX closed at 15,197.82 on November 30th, up from a closing value of 15,027.28 at the end of October.