Canadian Economic News, November 2024 Edition

Resources

• Colorado-based Ovintiv Inc. announced it had entered into a definitive purchase agreement to acquire certain Montney assets from Paramount Resources Ltd. of Calgary in an all-cash transaction valued at approximately $3.325 billion. Ovintiv said the transaction is expected to close by the end of the first quarter of 2025, subject to the satisfaction of customary closing conditions and customary closing adjustments.
• Calgary-based TC Energy Corporation announced four new growth projects, totaling approximately $1.5 billion of gross capital expenditures, including two projects on the company's Columbia Gulf System: the USD $0.4 billion Pulaski Project and the USD $0.4 billion Maysville Project to facilitate full coal-to-gas conversion at two existing power plants; the USD $0.3 billion Southeast Virginia Energy Storage Project, an LNG peaking facility in southeast Virginia; and approximately $175 million in Ontario's Bruce Power.
• Colorado-based Newmont Corporation announced it had agreed to sell its Musselwhite operation in Northwestern Ontario to Orla Mining Ltd of Vancouver for up to USD $850 million in total consideration. Newmont said the transaction is expected to close in the first quarter of 2025, subject to shareholder and regulatory approvals.

B.C. and Montreal Port strikes

• The British Columbia Maritime Employers Association (BCMEA) announced on November 4th that it had locked out forepersons and other Local 514 members until further notice.
• The Port of Montreal announced that on November 10th, the Maritime Employers Association (MEA) declared a lockout, bringing port activities to a complete halt at almost all Port of Montreal terminals and that the terminals would be closed until further notice.
• On November 12th, the Government of Canada announced it had directed the Canada Industrial Relations Board to order the resumption of all operations and functions at the ports of British Columbia, Montreal, and Quebec, and to assist the parties by imposing final and binding arbitration.

Economic and fiscal updates

• The Government of Quebec released its fall economic and financial update on November 21st, which included investments to increase support for the forestry sector, promote access to housing, support public transit, and ensure the safety of Quebecers. The Government forecasts an $8.8 billion deficit for 2024-25 and real gross domestic product (GDP) growth of 1.2% in 2024 and 1.5% in 2025.
• The Government of Alberta released its 2024-25 Second Quarter Fiscal Update and Economic Statement on November 21st. The Government is projecting a $4.6 billion surplus in 2024-25 and real GDP growth of 3.0% in 2024 and 2.7% in 2025.
• The Government of Saskatchewan released its 2024-25 Mid-Year Report on November 28th. The Government forecasts a $743.5 million deficit in 2024-25 and real GDP growth of 1.4% in 2024 and 1.7% in 2025.

Other news

• The Government of Canada on November 7th announced two new measures to help unlock more homes across the country:
  • The launch of the Canada Housing Infrastructure Fund's (CHIF) $1 billion direct delivery stream which will provide communities across Canada with funding to build or improve critical infrastructure;
  • the Federal Economic Development Agency for Southern Ontario has begun accepting applications for the Regional Homebuilding Innovation Initiative (RHII). The Government said that through RHII, Canada's Regional Development Agencies are investing $50 million over two years, beginning this year, to provide support to the residential home construction sector and its supply chain.
• The Government of Canada announced on November 21st that it would be introducing legislation in Parliament that would:
  • Provide for a two-month Goods and Services Tax/Harmonized Sales Tax (GST/HST) break, from December 14, 2024 to February 15, 2025, for groceries and holiday essentials; and
  • Provide for the delivery of a new $250 Working Canadians Rebate to 18.7 million Canadians in early spring 2025.
• The Government of Newfoundland and Labrador announced it was adding to its affordability measures by matching the Government of Canada's recently announced GST/HST tax break on essentials.
• The Government of New Brunswick announced it had introduced legislative amendments to the Petroleum Products Pricing Act that would, if approved, remove the cost of the carbon adjuster from the price of gasoline and diesel. The Government said the change would take effect in mid-December. The Government also said it is implementing a provincial rent cap and that as of February 1, 2025, rent increases will be capped at 3% annually.
• Montreal-based BCE Inc. announced that its wholly-owned subsidiary, Bell Canada (Bell), had entered into a definitive agreement to acquire Ziply Fiber of Washington State, an Internet provider in the Pacific Northwest of the United States, for approximately $5.0 billion in cash and the assumption of outstanding net debt of approximately $2.0 billion. Bell said the acquisition is expected to close in the second half of 2025, subject to certain customary closing conditions and the receipt of certain regulatory approvals.
• Belgium-based Umicore N.V. announced that as part of its ongoing strategic review of its Battery Materials business, the company had decided to continue to pause the construction of a new battery materials plant in Loyalist, Ontario. Umicore said it has not drawn on the incentives from the Governments of Canada and Ontario for the Loyalist plant.
• On November 15th, the Canadian Union of Postal Workers announced it was beginning a nationwide strike.
• Toronto-based CI Financial Corp. announced it had entered into a definitive agreement with an affiliate of Mubadala Capital of Abu Dhabi to take CI private in a transaction that values CI's equity at approximately $4.7 billion. CI said the transaction is expected to close in the second quarter of 2025, subject to shareholder and court approvals, regulatory clearances, and other customary closing conditions.

United States and other international news

• The U.S. Federal Open Market Committee (FOMC) lowered the target range for the federal funds rate by 25 basis points to 4.50% to 4.75%. The last change in the target range was a 50 basis points cut in September 2024. The Committee also said it will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
• 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 reduce the Bank Rate by 25 basis points to 4.75%. The last change in the Bank Rate was a 25 basis points cut in August 2024.
• 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 lowered the repo rate by 50 basis points to 2.75%. The last change in the repo rate was a 25 basis points reduction in September 2024.
• The Reserve Bank of New Zealand (RBNZ) lowered the Official Cash Rate (OCR), its main policy rate, by 50 basis points to 4.25%. The last change in the OCR was a 50 basis points cut in October 2024.
• The Organization of the Petroleum Producing Countries (OPEC) announced that  Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, which previously announced additional voluntary adjustments in April and November 2023, announced they had agreed to extend the November 2023 voluntary production adjustments of 2.2 million barrels per day for one month until the end of December 2024.
• The International Association of Machinists and Aerospace Workers (IAM) announced on November 4th that 33,000 frontline workers at Boeing voted to ratify a new union contract with the company following a strike that began on September 13th.
• Florida-based Spirit Airlines, Inc. announced it had entered into a restructuring support agreement that will be implemented by way of a prearranged Chapter 11 process in the United States. Spirit said existing bondholders are providing USD $300 million in debtor-in-possession (DIP) financing and that it expects to continue operating its business in the normal course throughout this process.
• Japan-based Nissan Motor Co. announced it was implementing measures to lower expenses, including cutting global production capacity by 20% and reducing its global workforce by 9,000.
• Sweden-based Northvolt AB announced that it and certain of its subsidiaries had voluntarily filed for Chapter 11 reorganization in the United States. Northvolt said that one of its existing customers had committed to provide $100 million in new financing to support Northvolt's business operations in the form of debtor-in-possession (DIP) financing and that Northvolt will continue to operate as usual during the reorganization.

Financial market news

• West Texas Intermediate crude oil closed at USD $68.00 per barrel on November 29th, down from a closing value of USD $69.49 at the end of October. Western Canadian Select crude oil traded in the USD $55 to $61 per barrel range throughout October. The Canadian dollar closed at 71.38 cents U.S. on November 29th, down from 71.86 cents U.S. at the end of October. The S&P/TSX composite index closed at 25,648.00 on November 29th, up from 24,156.87 at the end of October.